Chevron Refinery Fire Halts 40% of SoCal Jet Fuel Supply, Sparking Price Hikes
A significant fire and explosion at Chevron's El Segundo refinery in California has led to a shutdown of its jet fuel production, which supplies around 40% of southern California's needs, including LAX. The incident has sparked concerns about fuel supplies and prices in the USA.
The fire, which broke out in the evening in a jet fuel unit, was successfully extinguished by Chevron. No injuries were reported, and all personnel were accounted for. However, multiple processing units at the refinery were forced offline, including the catalytic reformer, hydrocracker, and fluid catalytic cracker. This has led to a significant reduction in the refinery's output, which supplies roughly a fifth of California's motor fuels.
In response to the shutdown, Phillips 66, Valero, and Marathon Petroleum are considering increasing their jet fuel cargoes to California in the coming weeks. This is to help balance the loss of output from the El Segundo refinery. Meanwhile, California is expected to import more jet fuel from Asian refiners to cover the lost output. Jet fuel prices have already jumped by about 33 cents per gallon due to the refinery shutdown, and California petrol prices are expected to rise modestly.
The incident is also occurring amidst planned refinery closures in the state. Phillips 66 is winding down its Los Angeles-area refinery for permanent closure, and Valero's Benicia refinery is set to close in April 2026. This is leading to tighter balances in California's refining system over the coming months.
State and federal safety agencies will investigate the cause of the explosion and fire at the El Segundo refinery. While no evacuation orders were issued, Manhattan Beach advised a shelter-in-place until 2 a.m. The refinery shutdown is expected to have significant impacts on fuel supplies and prices in California in the coming weeks and months. The state and industry are working to mitigate these impacts through increased imports and adjustments in production.
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