US refinery capacity fell for a second straight year, according to the Energy Information Administration's latest annual accounting of the nation's refining sector. Operable atmospheric distillation capacity, the standard measure of how much crude oil the country's refineries can process, totaled 18.2 million barrels per calendar day as of January 1, 2026, down more than 250,000 barrels per day, or about 1 percent, from a year earlier.

The decline traces mainly to two refinery closures. LyondellBasell ended operations at its roughly 264,000-barrel-per-day Houston refinery in March 2025, and Phillips 66 shut down its 138,700-barrel-per-day Los Angeles facility in October 2025. Together the two closures removed about 400,000 barrels per day of capacity, an amount partly offset by small expansions at other refineries still running.

The Los Angeles closure carries outsized weight on the West Coast, where it cut regional refining capacity by roughly 5 percent. EIA noted that limited pipeline capacity connecting Gulf Coast refining hubs to the West Coast leaves the region with fewer options to backfill lost supply compared with other parts of the country. The report also flagged that Valero's Benicia, California refinery, still counted in the January tally, has since ceased operating and was removed from the agency's monthly estimates in March 2026, pointing to further West Coast capacity loss ahead.

Nationally, the country now counts 130 operable refineries, two fewer than the prior year, even as the largest refiners posted small capacity gains from process improvements rather than new construction. Tighter refining capacity has direct implications for diesel supply and pricing that ripple through trucking fuel costs.

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