California’s jet fuel stockpile hits two-year low as war strangles oil supplies

As the war in Iran chokes the flow of oil around the world, California’s jet fuel reserves are dwindling.

The state, which refines much of its own fuel in El Segundo and elsewhere but still depends on crude oil imports, has seen its jet fuel stockpile fall more than 25% from last year’s peak, to a level not seen since 2023. California Energy Commission.

Supply is tightening as a global shortage is already affecting travelers’ summer plans with canceled flights and higher fares. This could even affect the plans of people coming to Los Angeles for the 2026 World Cup, which starts in June, said Mike Duignan, a hospitality expert and professor at Paris 1 Panthéon-Sorbonne University.

“People don’t quite know how this is going to escalate,” he said. “There’s a huge dark cloud over the sea because of the World Cup and the stagnation in travel that we’re seeing is entirely linked to this oil shortage.”

As fuel stocks decrease, flight prices increase. Airlines add baggage surcharges to cover fuel costs. Many routes departing from smaller hubs in California, including Sacramento and Burbank, have already been cancelled.

Air Canada suspended flights this summer, cutting routes from JFK to Toronto and Montreal.

“Jet fuel prices have doubled since the beginning of the Iran conflict, affecting some low-profit routes and flights that are no longer economically viable,” the airline said. in a statement last week.

The International Energy Agency said last week that Europe had just over a month’s supply of jet fuel left. German airline Lufthansa cut 20,000 flights from its summer schedule this week in a bid to cut costs.

Experts stated that the situation is unlikely to improve unless new oil flows through the Strait of Hormuz. The oil reserves stored by countries and companies are helping cover shortages, but the tight supply chain can still cause economic damage.

“When there is a shortage in one place, everything is affected,” said Alan Fyall, associate dean of the Rosen College of Hospitality Management at the University of Central Florida. “Airlines are being cautious and I would say that’s a very smart strategy right now.”

California’s jet fuel stockpile fell to a two-and-a-half-year low of 2.6 million barrels last week, down from a peak of more than 3.5 million barrels last year.

The California Energy Commission, which tracks fuel inventory, said the state’s current supply of jet fuel is still sufficient.

“Current production and stock levels of jet fuel historical ranges“Although supply is tight, a structural deficit has not yet emerged. The current tightness reflects short-term global market stress. California is positioned to meet regional jet fuel needs as long as refinery operations remain stable,” a spokesman said.

Europe is more directly affected because of its dependence on the Middle East for the vast majority of its crude oil and many refined products, experts said. California takes crude oil From the Middle East, but also from Canada, Argentina and Guyana.

The state has the capacity to refine about 200,000 barrels of jet fuel per day, mostly from refineries in El Segundo and Richmond.

The amount of crude oil originating from the state has been decreasing since the early 2000s as state regulations and drilling costs have led to greater oil production. imports.

Chevron, one of the companies that provides jet fuel in the state, says California has become particularly vulnerable to supply chain shocks such as the war in Iran.

“The conflict in the Middle East Gulf has highlighted the danger of California’s decision to produce energy offshore,” said Chevron spokesman Ross Allen. “Taxes, red tape, and burdensome regulations cost the state approximately 18% of its refining capacity last year, and we urge policymakers to preserve remaining production capacity.”

61% of crude oil supply in 2025 California’s refineries It came from foreign sources, according to the California Energy Commission. About 23% came from within the state; five years ago this rate was 35%.

Jesus David, IIR Energy’s senior vice president of energy, said the state’s refining capacity is also decreasing. The West Coast region’s refining capacity has fallen from 2.9 million to 2.3 million barrels per day since 2019, he said.

“California had problems before the war,” David said. “Nothing new has been built in the last 30 years, and California has shut down a lot of capacity.”

As a result, both gasoline and jet fuel prices were higher in the state. Jet fuel at LAX It costs closer to $15 per gallon this week, compared to almost $10 at Denver International Airport and $11 at Newark International Airport.

Gasoline prices have also been hit hard by global conflicts. Average gas prices In California, it’s close to $6 per gallon, which is about $2 above the national average.

The West Coast is a “fuel island” because it’s not connected to the rest of the country by pipelines, United Airlines CEO Scott Kirby said in an interview last month. This means that oil and refined products must be brought in by ships.

“Fuel prices are more sensitive to supply weakness on the West Coast than elsewhere in the country,” Kirby said.

He said some airlines may not survive the turmoil if oil prices do not stabilize soon. Spirit Airlines, a budget carrier based in Florida, is reportedly in imminent danger of liquidation if not rescued by the Trump administration.