U.S. refining capacity fell for a second consecutive year, with operable atmospheric distillation capacity totaling 18.2 million barrels per calendar day as of January 1, 2026, down more than 250,000 barrels per day, about 1%, from a year earlier. The decline came from the loss of two refineries rather than a broad pullback across the industry, according to the Energy Information Administration's annual Refinery Capacity Report.

LyondellBasell shut its 263,776 barrel per day refinery in Houston in March 2025, and Phillips 66 ended operations at its 138,700 barrel per day refinery in Los Angeles in October 2025. Together the two closures removed about 400,000 barrels per day of capacity from the national total, an amount partly offset by small capacity gains at other plants. The report now counts 130 operable U.S. refineries, two fewer than in 2025.

The Los Angeles closure carries outsized weight for West Coast fuel supply. Phillips 66's plant represented a small slice of national refining capacity, but its shutdown cut West Coast refining capacity by 5%, and the region has limited pipeline capacity to import products from the larger refining hubs on the Gulf Coast. The Houston closure, by comparison, trimmed Gulf Coast capacity by less than 2% after accounting for gains elsewhere, since that region already produces more fuel than it consumes.

A third closure is already working its way into next year's count. Valero's 145,000 barrel per day Benicia refinery in California was still listed as operating on January 1, 2026, but the company ceased refining there, and EIA removed its capacity from monthly estimates starting in March 2026. Marathon, Valero, and ExxonMobil each posted capacity gains of less than 1% in 2026, changes the agency attributed to process improvements rather than new construction.

Source: U.S. Energy Information Administration -- https://www.eia.gov/todayinenergy/detail.php?id=67807