LOS ANGELES: US supplies of petrol are being shipped out of the country to travel thousands of miles via the Bahamas before finally ending up in California, a state battling shrinking fuel-making capacity and high pump prices.
Shipments on the circuitous route are increasing. California imported more petrol in November than ever before, with more than 40% coming from the Bahamas.
The lengthy journey adds another layer of cost to California’s already expensive petrol market.
Yet the phenomenon isn’t likely to disappear soon, thanks to a combination of disappearing oil refineries, a lack of interstate pipelines and a loophole in a 106-year-old maritime law.
California has among the strictest environmental regulations in the United States, making it costly for energy companies to operate in, though a wave of upcoming refinery closures is prompting officials and regulators to soften their stance.
On average, the closures could raise the cost of petrol for consumers by between five and 15 US cents for every 4.5 litres, said Patrick De Haan, GasBuddy’s head of petroleum analysis.
After Phillips 66 shuttered its Los Angeles refinery in October, petrol imports climbed in 2025 to the highest level since at least 2016, Vortexa data showed.
With Valero Energy Corp set to close a Northern California refinery this spring, and no fuel pipelines connecting the US Gulf’s oil-producing powerhouse to the West Coast, the nation’s most populous state will likely continue to depend on imports to bridge the gap, analysts have pointed out.
Under the Jones Act, any goods shipped between US ports must travel on US-built, US-owned and US-operated vessels.
Those tankers are in short supply and expensive to charter. According to some estimtes, there are about 55 Jones Act-compliant oil tankers worldwide, compared with more than 7,000 oil tankers globally.
“Even if there are such vessels, they would charge more than a foreign-flagged vessel would,” said Martin Davies, director of Tulane University’s Maritime Law Centre. — Bloomberg
