Seven major US refinery closures and conversions since 2019 have permanently removed more than 1.2 million barrels per day of crude processing capacity, tightening domestic fuel supply even as operating plants run near full tilt. The reduction helps explain why diesel and other refined products have stayed expensive through 2026.

Remaining refineries have compensated by running hard. Utilization reached 96.10 percent for the week of June 19, 2026, and stood at 94.8 percent in December 2025 with 17.0 million barrels per day of crude inputs. High utilization leaves little slack to absorb unplanned outages, so a single incident can ripple into regional price spikes.

California has felt the sharpest contraction. Three closures, Phillips 66 Los Angeles at 138,700 barrels per day, Valero Benicia at 170,000 barrels per day, and the Phillips 66 Rodeo conversion to renewable fuels, together represent roughly 27 percent of the state's refining capacity.

Margins add pressure. Crack spreads, the difference between crude input costs and refined product prices, have declined steadily since their 2022 peak, making marginal and mid-size plants harder to keep open. US petroleum product exports set a record 6.6 million barrels per day in 2024 with utilization near 95 percent, showing that domestic output remains heavily committed even as capacity shrinks.

Source: U.S. Energy Information Administration - https://www.eia.gov/todayinenergy/detail.php?id=65624