[September 27, 2026] According to Forbes, closures tightened the market; they were not a scheme to manufacture scarcity. Operable U.S. plants fell from 135 in early 2020 to 130 by January 2026 and capacity from nearly 19 million bpd to about 18.2 million bpd, with Valero’s Benicia idle taking more California barrels out.
Operable U.S. plants fell from 135 in early 2020 to 130 by January 2026 and capacity from nearly 19 million bpd to about 18.2 million bpd.
Each shutdown was a plant-level capital call, not a company-level profit story. PES (~335,000 bpd) failed after Sunoco’s 2012 exit, a Carlyle rescue, 2018 bankruptcy, and a June 2019 fire; pandemic demand collapse closed Marathon Martinez (161,000 bpd) and Gallup plus HollyFrontier Cheyenne (some sites became renewable-diesel plants); Ida flooding turned Phillips 66 Alliance (256,000 bpd) into a terminal; LyondellBasell Houston (264,000 bpd) and Phillips 66 Los Angeles (139,000 bpd) stopped crude runs in 2025.
Fewer refineries did not mean a matching collapse in capacity. The count has dropped from 300-plus in the early 1980s to 130, but survivors scaled up (Marathon Garyville 200,000 → 600,000-plus bpd; ExxonMobil Beaumont in 2023), and small expansions offset much of the ~400,000 bpd lost at Houston and Los Angeles in 2025.
California is the supply-chain exception: Los Angeles plus Benicia were ~17% of state capacity; there is no major refined-product pipeline to the Gulf, gasoline specs are unique, and replacement barrels must arrive by tanker—often from Asia—so EIA flags a larger price hit than an equivalent Gulf Coast loss.
Shutting a healthy 200,000 bpd plant to lift national margins would gift those margins to ExxonMobil, Marathon, and Phillips 66 while surrendering your own barrels—but every closure still cuts spare capacity, so Russian, Ukraine-war, Middle East, and export-restriction diesel losses now spike prices harder.
Read the full story on Forbes.
