Locator: 50235STORAGE.
The 2026 Iran War has brought a lot of attention on the loss of oil on a daily basis with many suggesting that if the war lasts much longer there will be a critical loss of oil. For India that is definitely true and will become a reality much sooner than the rest of the world.
For California, the problem is not the supply of oil but the refining capacity.
Oil, is for the most part, worthless if it cannot be refined. For me, facts and figures with regard to loss of oil due to the closure of the Strait of Hormuz and the SPR "drained" by Biden are meaningless to me. I really don't know what it means to lose 4 million bopd due to the closure of the strait or whether there is 800 million barrels of oil in the US' SPR or whether there is 400 million barrels. What matters to me is the amount of oil we have in storage measured in days, and the trend of the amount of oil in storage (increasing or decreasing).
So, how much oil is in storage in the US?
From the EIA, link here:
You know, in the big scheme of things: I've been posting on the blog since 2009 -- 17 years -- and early on I track this data almost religiously, post the numbers every week -- and in the big scheme of things, the number of days of oil in storage has not changed much (except for a few temporary periods, like during Coivd) but has remained relatively stable. Again, oil demand may have increased or decreased, but number of days of oil in storage was directly related to refinery capacity. A big enough hurricane could significantly shut down refining capacity along the Gulf coast and the price of gasoline would surge, not because there was too much oil in storage but there was too little refining capacity.
But this is the interesting point: the number of days of oil we have in storage is not demand per se, but is the amount of refining capacity. All things being equal, the amount of oil in storage will increase in California simply because they don't have the capacity to refine it.
If one wants to ask why the price of gasoline is so high in California compared to the rest of the country, it's not due to the amount of oil in storage or the Iran war, it's due to the faux environmentalists that demanded California shut down their refineries.
If there really was a shortage, the drillers would be incentivized to increase their drilling. But the federal government has not done that. In fact, there's so much oil sloshing around, Governor Newsom is doing his best to stop most oil production in this own state and/or off the coast. If the price of gasoline is so high in California due to a shortage of oil, Governor Newsom should be working to increase the amount of oil being produced / refined. But he is not. That speaks volumes.
But the data is clear (see above). The amount of oil in the US in storage right now, appears to actually be higher than the average over the last 70 years. Maybe not by much, but certainly there is not shortage of oil. In California, it's a shortage of refining capacity.
