California stares down war-related oil supply crisis as Chevron’s Middle East oil imports dry up
MS NOW
0:03 near Iran's main oil hub of Karga Island.
0:05 It is the largest spill captured since the start
0:08 of the war and the disruption of global oil prices.
0:11 Well, oil prices today put West Texas crude at $94 $24 .68 a barrel,
0:16 and AAA says the average price for a gallon of regular gas today is $453.
0:23 We are embroiled in multiple armed conflicts,
0:26 including an ILLEGAL WAR IN IRAN THAT HAS
0:29 ALREADY COST THE LIVES OF THOUSANDS OF CIVILIANS,
0:32 13 SERVICE MEMBERS AND HUNDREDS OF OUR PROUD MEN
0:35 AND WOMEN IN SERVICE WHO HAVE BEEN SEVERELY INJURED.
0:38 AND OIL AND GAS PRICES ARE SKY HIGH RIGHT NOW.
0:43 MSNOW REPORTER LAURA HAFLEY JOINS ME FROM EL SEGUNDO, CALIFORNIA.
0:47 THAT'S WHERE AVERAGE GAS PRICES ARE CLOSER TO 615 PER GALLON OF REGULAR YIKES.
0:52 BY THE WAY, I WAS IN L .A.
0:53 EARLIER THIS WEEK.
0:54 I I filled up my son's car.
0:56 Ouch!
0:56 I mean, it was a lot.
0:58 So what are you hearing about how
0:59 global disruption is affecting the U .S., Laura?
1:04 Alex, that's quite the gift from a good
1:05 mom because that's an EXPENSIVE GAS PRICE FOR SURE, HE MUST BE A HAPPY SON.
1:11 BUT LOOK, I GOT TO GO INSIDE
1:13 OF CHEVRON'S OIL REFINERY IN EL SECUNDO, CALIFORNIA.
1:16 THEY'RE REFINING 12 MILLION GALLONS OF OIL PER And I got to learn
1:21 for myself from the source why it is so difficult for California,
1:26 especially to get oil and why in part it's contributing to these gas prices.
1:31 Look behind me here for a second.
1:32 I'll take your I'LL RAISE YOU $6 .49 PER GALLON
1:36 FOR REGULAR AND LOOK AT THAT DIESEL COST, $7 .59 FOR DIESEL.
1:44 THIS IS WHY CALIFORNIA DRIVERS ARE SO FRUSTRATED Take a look.
1:50 With a halt at the Strait of Vermouth, the U .S.
1:53 oil supply gap is here and Californians could soon face the worst
1:57 supply crisis in the U And at Chevron's Southern California refinery,
2:02 we saw it for ourselves.
2:04 Right now, I'm literally standing on the edge
2:06 of the Chevron oil refinery right along the El Segundo coast.
2:10 You see those oil tankers out there?
2:12 Right now, Now they're piping crude oil through the water into the refinery.
2:15 But the only difference,
2:17 there's not a single gallon of Middle Eastern oil on board.
2:20 60% of its crude oil comes from overseas and critically
2:25 25% of its gasoline and 20% of its jet fuel.
2:29 And while oil can move freely across most of the U .S.,
2:34 in California, it cannot.
2:35 The massive web of pipelines carrying crude oil
2:38 and fuel across state lines can't come into California,
2:41 in part because of mountain ranges, desert, and of course politics.
2:46 That's because of a century-old law, the Jones Act,
2:50 requiring Vessels shipping oil between U .S.
2:53 ports to be American-owned, crewed and built,
2:56 making it cheaper for California to import oil from Asia or the Middle East.
3:01 The Trump administration has issued a temporary waiver,
3:04 allowing for lenience on the act.
3:06 But it may be too little too late.
3:08 So the company's leaning into alternative markets
3:10 as far away as Brazil and Venezuela.
3:14 We've had to be flexible in the locations that we bring crude
3:18 in from and the types of crudes that we bring into process.
3:21 Not a long-term solution because without competition
3:24 from the Middle East, prices could go up.
3:27 They're actually refining 12 million gallons per day of crude oil.
3:32 They're doing it behind me here,
3:34 making critical products like gasoline and jet fuel.
3:37 That's equivalent to one third LAX is jet fuel
3:40 and enough for one in four vehicles driving through Southern California.
3:48 I want to give you a little more perspective
3:50 here of just how much trouble California could be in.
3:53 I just heard from Chevron, they told me that that refinery,
3:56 let's say, oil tanker pulls up.
3:59 On average, that oil tanker only lasts them one week.
4:04 So they already have limited access to oil.
4:06 They go through those tankers quickly.
4:08 So this is a serious issue.
4:10 And my biggest takeaway from my reporting is politics has
4:13 really caused California to seemingly be unprepared for this moment.
4:18 Alex?
4:19 Okay, heck of a report.
4:21 Thank you very much, Laura Haefeli from El Segundo.
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