The last California-bound oil tanker to pass through the Strait of Hormuz since war erupted is at the Port of Long Beach offloading its valuable cargo \u2014 2 million barrels of crude destined to be transformed into gasoline, jet fuel and diesel.<\/p>\n
The New Corolla loaded up in Iraq on Feb. 24 \u2014 just days before U.S. and Israeli forces launched attacks on Iran, plunging the region into turmoil and sparking a double blockade of commercial shipping. <\/p>\n
In two weeks, the Hong Kong-flagged tanker will have fully unloaded at the Marathon Petroleum terminal and departed again for distant waters. After that, California must figure out how to replace some 200,000 barrels of oil a day that will no longer be arriving from the Persian Gulf. <\/p>\n
California\u2019s own supply of crude oil has been declining since the 1980s<\/a>, due to aging fields and a geology that makes drilling particularly costly. The state\u2019s gasoline refining capacity is also falling off<\/a>, increasing reliance on imports and highlighting California\u2019s status as an isolated energy island without gas pipelines to bring in supply from other states. <\/p>\n Now, with the end of the Middle East conflict nowhere in sight and the average cost of California gasoline topping $6 per gallon<\/a>, some lawmakers are warning of potential oil and gas shortages. <\/p>\n So far during the Iran war, oil deliveries to California have remained relatively steady. The state imports about 75%<\/a> of its oil from foreign countries and Alaska. Last year it brought in a mix<\/a> from Brazil, Iraq, Guyana, Canada, Ecuador, Argentina and Saudi Arabia as its top international suppliers, with about 30% coming from the Middle East. <\/p>\n In March and April, that mix didn\u2019t change much, with California receiving about 21% and 14% of its foreign oil from Iraq and Saudi Arabia, respectively, according to the data analytics firm Kpler.<\/p>\n Shipments that left before Iran blocked off the Strait of Hormuz in late February have continued to arrive on a one-to-two-month lag time, about the same time it takes for a tanker to make the voyage. But if the strait remains closed through May, \u201call bets are off,\u201d said Ryan Cummings, chief of staff at the Stanford Institute for Economic Policymaking. <\/p>\n \u201cRefineries have to source from elsewhere, and they are scrambling to find where to get that oil,\u201d said Susan Bell, a senior vice president at the consulting firm Rystad Energy. \u201cThey don\u2019t have very many options.\u201d <\/p>\n It\u2019s too early to say how California refineries \u2014 the state\u2019s main crude oil importers \u2014 plan to backfill the loss of Persian Gulf oil. <\/p>\n Refiners typically plan their sourcing about two months ahead, said Bell. But Chevron would not share its supply plans, describing them as \u201cmaterial to our business.\u201d And the state\u2019s other top refiners did not reply to requests for comment.<\/p>\n Bell said refiners are probably looking to import or have already made plans to import more oil from the countries where they already sourced crude, like Ecuador and the west coast of Canada, where freight fees are lower because of the shorter travel distance.<\/p>\n \u201cThey would definitely look to Brazil for the medium grades,\u201d said Bell, noting that the oil being lost is the heavy- and medium-grade crude preferred by most California refineries. \u201cGuyana might be a little bit too light for them to want to ramp up, but you know, a liquid barrel is a liquid barrel, so maybe they won\u2019t be too fussy about the quality.\u201d<\/p>\n Cummings said it\u2019s possible California refiners can outbid other countries competing over the same barrels for a period of time, but there\u2019s only so much to go around. \u201cWe\u2019re looking at 800 million to a billion barrels cumulative loss of production,\u201d said Cummings. \u201cThat\u2019s just incredibly tight.\u201d <\/p>\n Already, China, Thailand, South Korea, Pakistan and other countries<\/a> have scaled back or banned gasoline exports to protect domestic supply in the face of oil shortages and rising costs that make it too expensive to produce. <\/p>\n Some California lawmakers have been sounding the alarm<\/a> about potential supply shortages of both oil and gas in the months ahead. The California Energy Commission said it is \u201cworking closely with refiners\u201d and is \u201caware they are identifying and using alternate routes and sources of crude.\u201d <\/p>\n