California’s Oil Dependence Comes into Focus as Middle East Supply Risks Mount

A new Newsweek report highlights an uncomfortable truth California policymakers have spent years trying to ignore: when global oil markets seize up, California is among the most exposed places in America. In its April 1 story, Newsweek reported that analysts see California as the U.S. state most vulnerable to a prolonged disruption of Middle Eastern crude flows, particularly if shipping through the Strait of Hormuz remains constrained. The article points to California’s outsized dependence on imported crude and warns that supply shocks would likely translate into higher fuel costs and greater volatility on the West Coast.

This is not just a media storyline. California’s own Energy Commission said in a June 2025 report that the state currently imports over 75% of its crude oil to meet refinery demand, and that about 30% of crude supply to California refineries comes from the Middle East. The Commission also warned that gasoline imports could rise sharply as refinery capacity declines, increasing the risk of supply disruptions and price volatility. In other words, the vulnerability described in the Newsweek article is not speculative fiction; it is broadly consistent with the state’s own analysis.

The problem is being made worse by shrinking in-state refining capacity. Newsweek noted the closure of the Phillips 66 Los Angeles refinery and the expected shutdown of Valero’s Benicia refinery as factors that leave California more exposed to import disruptions. Those facts are borne out by official and company sources: Phillips 66 announced in October 2024 that its Los Angeles-area refinery would cease operations in the fourth quarter of 2025, and the California Energy Commission lists Valero’s Benicia refinery as intending to cease refining operations by the end of April 2026.

What makes this especially striking is that California officials themselves have now admitted the basic problem. The Energy Commission wrote last year that in-state petroleum refining capacity has been declining faster than demand for refined products, and that crude production in California has dropped far faster than refinery demand, forcing a greater shift toward foreign and Alaskan imports. The Commission further recommended immediate efforts to retain refining capacity where possible and to stabilize in-state crude production to support resilience in the petroleum system. That is a remarkable acknowledgment from a state government that has spent years pushing policies that undermined the very system it is now worried about preserving.

For CIPA members, the takeaway is straightforward. California is not insulated from global oil politics, it is increasingly chained to them. Every time the state makes it harder to produce crude here, harder to refine fuel here, or harder to maintain petroleum infrastructure here, it pushes Californians further into dependence on foreign barrels and marine imports. That may satisfy ideological talking points in Sacramento, but it does nothing to protect consumers, workers, or the reliability of the state’s fuel supply. The bill always comes due, and global markets are ruthless accountants.

CIPA has long argued that California needs an all-of-the-above energy strategy grounded in physical reality. Reliable in-state oil production and refining are not relics of the past; they remain essential to keeping transportation, emergency services, farming, manufacturing, and daily life functioning in the present. If the state truly wants affordability, resilience, and energy security, it should stop treating domestic production as the villain while outsourcing California’s energy future to unstable parts of the world. That is not climate leadership. That is strategic self-sabotage dressed up in green wrapping paper.