Petroleum Refineries NAICS 324110

Jul 27, 2025 - More Refinery Closures

• California is set to lose 17% of its oil refinery capacity over the next 12 months because of two planned refinery closures, Hydrocarbon Processing (HP) reported in July. Last October, Phillips 66 announced plans to close its 139,000-barrel-per-day (b/d) Wilmington refinery in the Los Angeles area later this year. Valero submitted a notice in April to end refining operations at its 145,000-bpd Benicia refinery in the Bay Area by the end of April 2026. The closures extend a trend of decreasing refinery capacity on the West Coast, following the end of operations at Phillips 66’s Rodeo refinery in 2024 and the closure of Marathon’s Martinez refinery in 2020. In its July Short-Term Energy Outlook, the Energy Information Administration forecasted a small increase in West Coast retail gasoline prices next year in response to the closures, in contrast to price decreases elsewhere in the US.
• The US Energy Information Administration is forecasting the inflation-adjusted average regular gasoline price this summer to be the lowest since 2020. The summer 2025 average price of about $3.10 per gallon is based on the average of the 2Q25 and 3Q25 US regular gasoline price, when increased travel during the warmer months of the year puts upward pressure on gas prices. Looking ahead to 2026, EIA is forecasting a US average summer retail price of regular gas near $3.20 per gallon. Compared with recent years, lower forecasted US gasoline prices in 2025 and 2026 are mainly a result of lower crude oil prices. The agency expects crude oil prices to continue to fall in 2026, creating a downward effect on gasoline prices and refinery margins.

• President Trump’s threat to impose a 25% tariff on crude oil from Canada would be particularly painful for US refiners as approximately 55% of all US crude imports flow from Canada, OilPrice.com reports. US refiners, especially those in the Midwest, take nearly all of Canada’s crude oil exports, and all but one of its export pipelines go to the US. Refineries in Michigan, Wisconsin, Indiana, and Ohio process almost 70% of the Canadian crude imports, according to Canada’s Cenovus Energy, which owns refineries in Ohio and Wisconsin. “A 25% tariff on Canadian crude could increase gas prices at the pump by up to 30 cents or more per gallon,” Cenovus said. On his first day in office, Trump said he aims to place 25% tariffs on imports from Canada and Mexico on February 1. Tariffs on Canadian crude, if levied, could lower downstream profitability for US refineries.
• Producer prices for petroleum refineries fell 8.4% in June compared to a year ago, after sliding 6.6% in the previous June-versus-June annual comparison, according to the latest US Bureau of Labor Statistics data. Employment by the industry declined by 2.8% year over year in May as oil refineries cut back due to a weak fuel outlook. US refining capacity declined in 2024, dropping by 43,000 barrels per day to 18.3 million barrels per day, according to a new Energy Information Administration report. Closures are further reducing capacity with LyondellBasell permanently shutting its 264,000-barrel-per-day Houston refinery, while Phillips 66 and Valero plan to close two California plants by 2026. Meanwhile, large Gulf Coast refineries continue to grow.