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US refining capacity decreased during 2025 to stand at 18.2 million barrels per calendar day on January 1, 2026. This decline represents a drop of over 250,000 barrels per calendar day, or about 1 per cent, compared with the prior year.
The contraction comes amid high-profile plant shutdowns on both the West and Gulf coasts, which restricted the overall domestic processing infrastructure. According to the US Energy Information Administration report, the total operable atmospheric distillation capacity stood at this lower level on January 1, 2026. The latest report includes 130 operable refineries, down by two facilities compared to 2025. "LyondellBasell ended refining operations at its 263,776-b/cd refinery in Houston in March 2025," the report stated. "Phillips 66 ceased operations at its 138,700-b/cd refinery in Los Angeles in October 2025," the document noted, adding that "combined, the closure of the two facilities represents a reduction in operable US refinery capacity of about 400,000 b/d." While the direct loss from these two major sites neared 400,000 barrels per day, the broader structural impact was partially mitigated. The total national contraction stopped at 250,000 barrels per calendar day because minor adjustments elsewhere countered the closures. The loss of capacity from the two facilities is partly offset by marginal capacity increases at other, existing refineries. Geographically, the impact of these closures varies significantly by region. The shutdown of the Phillips 66 facility altered the energy landscape in California. The report noted that the plant reflects a relatively small share of total domestic capacity, but its closure marks a 5 per cent reduction in refinery capacity on the West Coast. Regional supply dynamics complicate the situation further because West Coast markets operate with limited infrastructure links to other major oil hubs. "Relatively little pipeline capacity exists to supply petroleum products from large refinery hubs on the U.S. Gulf Coast to the West Coast," the report added. The agency explained that "reductions in refinery capacity on the West Coast can have a larger impact on fuel availability in the region compared with other regions in the United States." Further changes occurred after the formal reporting period ended. Valero's 145,000-barrels-per-day Benicia refinery remained inside the initial data pool because it was operational on January 1, 2026. However, that facility subsequently ceased refining operations, and its capacity was removed from the monthly capacity estimates as of March 2026. In contrast, the Gulf Coast absorbed its respective closure with less disruption. The LyondellBasell Houston refinery had greater distillation capacity, but its closure represented a reduction of only 3 per cent of regional refinery capacity on the US Gulf Coast, which is a region where more fuel is produced than consumed. Boosted by minor expansions at nearby sites, the overall Gulf Coast regional capacity decreased by less than 2 per cent during 2025. Company rankings adjusted slightly due to these structural shifts. The three largest domestic refiners--Marathon, Valero, and ExxonMobil--all logged calendar day capacity gains of less than 1 per cent, which likely stem from small-scale process improvements rather than major capacity expansions. Phillips 66 dropped in total capacity due to its California shutdown, while marginal gains allowed Chevron to overtake PBF Energy as the fifth-largest domestic refiner. Motiva's Port Arthur facility remains the largest single U.S. refinery on a calendar-day basis at 656,000 barrels per calendar day. (ANI)
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