USWC Flaring Eases, Supply Tightness Climb


   
Kristina Davis
DTN Refined Fuels Market Reporter

   MIAMI, FL (DTN) -- Flaring activity across the U.S. West Coast continues, 
although it remains below the levels seen late last year, when frequent 
refinery disruptions triggered repeated emissions events. 

   The drop, some traders argue, reflects reduced refining capacity rather than 
improved systema stability.

   That shift comes as Phillips 66 shut its 139,000 bpd Los Angeles refinery in 
the last quarter of 2025, while Valero has idled its 170,000 bpd Benicia 
refinery through a phased process that began in February.

   Both refineries recorded multiple emission events last year,  followed by 
Chevron's 285,000 bpd El Segundo refinery, which experienced some of its most 
intense flaring activity in October 2025. A fire at the refinery's Isomax 7 jet 
fuel unit forced the closure of multiple units, squeezing fuel supplies in the 
region.

   Despite the declining emission reports linked to the Los Angeles and Benicia 
refineries closure, the USWC still faces a challenging tight supply system, 
which has already been reflected in pricing.

   Since the start of the Iran war on February 28, Los Angeles ultra-low sulfur 
diesel (ULSD) spot average prices have climbed 68%, while jet fuel and CARBOB 
regular average values have risen 59% over the same period, according to DTN 
data.

   Retail gasoline average prices in the region have also risen to $5.22 gallon 
as of Monday May 4, the highest level since October 17, 2022 when it was at 
$5.09 gallon - driven by the Russia-Ukraine war- , according to Energy 
Information Administration (EIA) data. Meanwhile, diesel retail average prices 
reached $6.63 gallon on Monday compared to a pre-war average of $4.27 gallon, 
the same data showed .

   Geopolitical risks tied to the Iran war are putting additional pressure on 
the USWC. Concerns around potential disruptions to flows through the Strait of 
Hormuz have propelled global oil prices, compounding the impact of reduced 
refining capacity on the West Coast.

   With less capacity online and global risks rising, traders say the market is 
quieter on the surface but increasingly fragile heading into peak demand season.

   On Wednesday (5/6), the EIA reported that motor gasoline inventories in the 
PADD 5 region fell for the third consecutive week, declining by 200,000 bbl to 
28.2 million bbl during the week ended May 1. Distillate fuel oil stocks in the 
same region were unchanged at 10.1 million bbl during the week profiled but 
were 1 million bbl lower than the volume reported in the same period last year. 




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