en.Wedoany.com Reported - Crude oil from the U.S. federal government's Strategic Petroleum Reserve has been shipped to California for the first time by sea, stored in salt caverns along the Gulf Coast. This move comes amid a global oil trade disruption caused by the Iran war, compounded by California's restrictions on oil production, leading to a severe supply shortage in the state.
The war has slowed over 20% of global oil trade, blocking crude that typically flows from Asia to California refineries. Debnil Chowdhury, head of refining at S&P Global Energy, said Asian countries need to prioritize supporting their own fuel markets, leaving fewer barrels for California and the West Coast. He noted that California is a particularly isolated fuel market, and the shipment of Strategic Petroleum Reserve crude to the West Coast is "not surprising."
According to data from Kpler, approximately 460,000 barrels of Louisiana crude were shipped to Chevron's refinery in Richmond, California, with an additional 50,000 barrels of similar blended crude sent to the company's refinery in El Segundo. This crude was drawn from salt caverns along the coasts of Louisiana and Texas, which store the federal government's Strategic Petroleum Reserve. In early May, nearly 980,000 barrels of crude were shipped to the east coast of Panama, after which Chevron chartered a supertanker to load nearly 2 million barrels of crude from Panama and head to the U.S. West Coast. According to Kpler data cited by Reuters, one batch of this oil is believed to have come from reserves in Guyana.
Chevron spokesperson Ross Allen did not comment on routine commercial matters, but the company confirmed it is utilizing a fleet of vessels exempt from the Jones Act to alleviate supply challenges in California and the West Coast. The Jones Act, a 1920 maritime law, restricts U.S. waterborne shipping to U.S.-flagged vessels; the Trump administration granted waivers to this restriction to ease supply issues threatening national security or the economy. Allen noted that California has lost nearly 18% of its refining capacity in less than a year due to excessive regulation and red tape in Sacramento, leaving the state heavily reliant on strained overseas suppliers and the Jones Act-exempt fleet to maintain market balance.
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