The number of operable US oil refineries fell to 130 by January 2026, down from 135 in early 2020, according to data reported by Forbes. That five-facility decline over six years came alongside a reduction in total US refining capacity, which dropped from nearly 19 million barrels per day in early 2020 to approximately 18.2 million barrels per day by early 2026, a loss of roughly 800,000 barrels of daily processing capacity.

The closures have been concentrated in specific regions. In California, the shutdowns of the Phillips 66 Los Angeles and Valero Benicia refineries eliminated about 17 percent of the state's total refining capacity, tightening fuel supply in a market already prone to price volatility. On the Gulf Coast, LyondellBasell's Houston refinery closure removed 264,000 barrels per day of capacity in 2025 alone, one of the largest single facility losses in recent years.

The long-term trend shows an industry consolidating into fewer, larger facilities. The United States operated more than 300 refineries in the early 1980s, compared with 130 today, even though total processing capacity has stayed relatively stable because modern refineries are built to handle significantly more volume than their predecessors.

The pattern of closures matters for fuel markets because refining capacity determines how much gasoline and diesel the country can produce domestically. Fewer refineries operating closer to their limits can leave regional fuel supplies more exposed to price spikes when unplanned outages or maintenance events reduce output further.

Source: Forbes -- https://www.forbes.com/sites/rrapier/2026/09/23/why-profitable-refiners-close-refineries/