California, facing a gasoline shortage, is turning to fuel from the Bahamas

Gasoline supplies from the US are being exported and sent thousands of miles via the Bahamas before reaching California, a state struggling with shrinking fuel production capacity and high pump prices.

The shipments along this circuitous route are on the rise. In November, California imported more gasoline than ever, with over 40% coming from the Bahamas.

The long journey adds an extra cost layer to California’s already pricey gasoline market. However, this phenomenon is unlikely to vanish soon due to a combination of disappearing oil refineries, a lack of interstate pipelines, and a loophole in a 106-year-old maritime law.

California has some of the strictest environmental regulations in the US, making it costly for energy companies to operate there. Although a wave of upcoming refinery closures is causing officials and regulators to soften their stance. On average, the closures could increase the cost of gasoline for consumers by 5 to 15 cents per gallon, said Patrick De Haan, head of petroleum analysis at GasBuddy.

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After its Los Angeles refinery closed in October, gasoline imports in 2025 climbed to the highest level since at least 2016, according to Vortexa data. With [Corp.] closing a Northern California refinery this spring and no fuel pipelines connecting the US Gulf’s oil-producing powerhouse to the West Coast, the most populous state in the nation will probably rely on imports to bridge the gap.

Under the Jones Act, any goods shipped between US ports must be transported on US-built, owned, and operated vessels. Those tankers are in short supply and expensive to charter. There are approximately [number] Jones Act-compliant oil tankers globally, compared to more than [number] oil tankers worldwide.

“Even if there are such vessels, they would charge more than a foreign-flagged vessel,” said Martin Davies, director of Tulane University’s Maritime Law Center.

When California’s specialized gasoline trades at a premium, especially during refinery outages, Gulf Coast refiners can gain higher margins by sending barrels west, De Haan said. Shipping through the Bahamas enables them to avoid the higher-cost US-flagged shipping and maintain that price difference.

In those situations, “there will be a lot of incentive for PADD 3 (Gulf Coast) and Asian refiners to supply Californians,” De Haan said.

The trade has accelerated. Last year, California sourced more barrels of gasoline from the Bahamas than in the previous nine years combined – accounting for roughly 12% of the gasoline arriving in California by ship throughout the year, including direct deliveries from other parts of the US, according to Vortexa.

Gasoline imports were down from their fall peak in January, according to Vortexa. Japan and India both made up a larger proportion of foreign supply – although the Bahamas was the third-leading non-US supplier.

Asia is a more practical source of gasoline for California, De Haan said, noting that refineries in the region already produce gasoline blendstock at the grade specifically required by California, and it can arrive without paying to transit the Panama Canal. Both India and South Korea supplied more product to California last year than the Bahamas.

The economic appeal of shipping US-refined gasoline on cheaper foreign vessels has been decreasing in recent months after the US eased sanctions on Venezuela, which led to an increase in regional freight prices. Foreign ships, which were nearly $4 a barrel cheaper than US-flagged ones last year, are now only about $1 cheaper, according to data from Argus Media. If freight costs continue to rise, shipments of US gasoline could become too expensive to compete with supplies from South Korea or India.

Still, the Bahamian trade route, which started gaining momentum in the early months of 2025, has become a crucial part of California’s troubled supply chain. This year, two tankers carrying gasoline have already arrived in California from the Bahamas, according to customs data.

One of the most recent voyages was made by the Singapore-flagged Silver Moon, which delivered nearly 300,000 barrels of gasoline blendstock to the Los Angeles area in early January after loading in Freeport in mid-December. The vessel transited the Panama Canal and was consigned to Houston-based refiner Phillips 66. The company recently leased storage tanks in the Bahamas, according to people familiar with the situation.

Phillips 66 declined to comment.

Earlier this month, the Torm Dulce made the same voyage and delivered gasoline blendstock to San Francisco. The route is similar to a long-standing workaround for bringing fuel to the East Coast when it’s shipped outside pipeline systems, said Matt Smith, lead oil analyst at Kpler.

“This is a trend we’ve seen become established on the US East Coast: barrels are shipped from the US Gulf Coast via the Bahamas to avoid using Jones Act vessels,” Smith said.” It makes sense that this is increasingly happening on the US West Coast given refinery retirements and outages – and is a trend we expect to continue.” Gasoline imports were down from their fall peak in January, according to Vortexa. Japan and India both made up a larger proportion of foreign supply – although the Bahamas was the third-leading non-US supplier.