California’s Energy Loophole is Funding Russia’s War

Every time Californians pull up to the pump, some of their dollars may be flowing halfway around the world, into the Kremlin’s war chest.

That’s the uncomfortable truth behind a California Globe investigation exposing how state energy policies have created a loophole that indirectly funds Vladimir Putin’s war on Ukraine. This was highlighted by Hector Barajas, who contributed an editorial to the California Globe.

In 2021, California imported 18.3 million barrels of oil directly from Russia. Following Russia’s invasion of Ukraine, Governor Gavin Newsom called for divestment from Russian oil, and those direct purchases stopped. But the problem didn’t end there.

Here’s how the loophole works:

• Russia sells its crude to countries like India, which is now Moscow’s biggest buyer.

• India refines that crude into gasoline and blending components.

• California imports that gasoline, which is no longer labeled “Russian,” even though the product still originates with Russian oil.
  

In August 2025 alone, California imported 39,000 barrels per day of gasoline and blending components from India, the highest level in over a year.

A Self-Inflicted Crisis

This outcome is not an accident. It’s a consequence of Sacramento’s policies. California’s oil demand has grown, while in-state production has been cut in half over the past decade. More than 1,000 permits sit unprocessed at CalGEM, and legislation like SB 1137 is shutting down another 15,000 wells. On top of that, California continues to lose refining capacity, with two more refineries in Los Angeles and Benicia scheduled to close.

Instead of leaning on safe, local production under the world’s strongest environmental standards, California has outsourced its energy needs to foreign suppliers, including, indirectly, Russia.

What This Means for CIPA Members

For independent producers the message is clear: California cannot legislate its way out of the energy reality the state faces. By undercutting local production and refining, policymakers have made Californians more dependent on foreign fuel and complicit in financing authoritarian regimes abroad.

CIPA has long argued that keeping production local is not just an economic or environmental issue, but a matter of national security and moral responsibility.

As Rock Zierman, CIPA CEO, often reminds policymakers:

“Every barrel we fail to produce here under California’s strong environmental protections is a barrel we end up importing from places with lower standards and, in this case, from regimes hostile to American values. Californians deserve better.”

The Bottom Line

California’s energy loophole is fueling Russia’s war machine. Until Sacramento reforms permitting, protects refining, and embraces the state’s own producers, drivers will keep paying at the pump to fund Moscow’s bloody war in Ukraine.

CIPA will continue fighting to close that loophole by pushing for policies that increase in-state oil production to keep California’s energy local, reliable, and secure.