US oil refining capacity declined in 2026 even as operating plants ran near full tilt, a combination that tightened domestic fuel supply. Operable atmospheric distillation capacity totaled 18.2 million barrels per calendar day on January 1, 2026, down more than 250,000 barrels per calendar day, roughly 1%, from a year earlier, according to the U.S. Energy Information Administration.

The drop traced largely to two closures. The Phillips 66 refinery in Los Angeles and the Valero refinery in Benicia, California both ceased operations in early 2026, removing significant West Coast capacity as compressed refining margins made continued production uneconomic.

Remaining refineries operated at high intensity. For the week ending June 19, 2026, US refineries processed 17.1 million barrels per day of crude and ran at 96.1% of capacity. Utilization had measured 94.8% in December 2025 with 17.0 million barrels per day of crude inputs, confirming sustained high output.

The three largest US refiners, Marathon, Valero, and ExxonMobil, each reported capacity increases of less than 1% versus 2025, gains tied to small process improvements rather than new construction. With capacity shrinking and demand for refined products holding firm, the data points to structural supply constraints that leave less slack to absorb any unplanned outage.

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