California drivers are now filling up with gasoline that’s taken a scenic detour through the Bahamas—despite the fuel starting its life right here in the good ol’ U.S. of A.
California set a new record for gasoline imports in November, pulling in more than ever before, with over 40% arriving courtesy of the Bahamas. Yes, that Bahamas—the one famous for beaches, not refineries.
Gulf Coast gasoline gets shipped south to Freeport, blended or stored, then sent westward through the Panama Canal to Los Angeles or San Francisco. It’s like mailing a letter to your neighbor by routing it through another continent first.
California’s refineries are closing faster than beach umbrellas in a storm. Phillips 66 shut its Los Angeles facility in October, Valero’s Northern California refinery is winding down this spring, and strict environmental rules have made staying open about as appealing as a root canal without anesthesia. No interstate pipelines connect the fuel-rich Gulf to the West Coast, so imports are the new normal.
Enter the Jones Act, that plucky 106-year-old maritime law requiring goods between U.S. ports to travel on U.S.-built, owned, and crewed ships. There are only about 55 such oil tankers in the world—fewer than the number of celebrity yachts in Monaco—making them pricier than a California avocado toast brunch.
Foreign-flagged vessels? Much cheaper. So clever shippers send the fuel “out” to the Bahamas, then “in” again, dodging the domestic shipping premium like it’s a toll booth on the 405.
The extra mileage piles on costs to an already wallet-busting market. Analysts peg refinery closures as adding 5 to 15 cents per gallon at the pump, and this nautical joyride doesn’t help. Yet the incentive remains golden: when California’s fancy CARBOB blend trades at a premium during outages, Gulf refiners pocket better margins even after the long cruise.
Asian suppliers like India, South Korea, and Japan offer more direct routes and the exact blend California demands—no Panama Canal tolls required. Lately, they’ve outpaced the Bahamas in volume. Freight costs have narrowed too, thanks to eased Venezuela sanctions bumping regional rates, making foreign ships only slightly cheaper now.
Still, the Bahamas workaround persists, with tankers like the Silver Moon and Torm Dulce delivering hundreds of thousands of barrels in recent months.
It’s a masterclass in creative logistics: turning a protectionist law into an invitation for international tourism—one barrel at a time. California keeps its strict green standards, refiners keep their profits, and drivers… well, they keep paying premium prices for fuel that’s seen more ocean views than most vacationers.
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