On October 6th, Chevron confirmed that its refinery near Los Angeles has gradually resumed production and transportation of gasoline after a fire broke out last week. Despite some equipment shutdown during the incident, the refinery is now back in operation.
According to Chevron spokesperson Ross Allen, the fire was extinguished on the morning of October 4th, and efforts are underway to restart the production units that were closed during the fire.
The explosion at the El Segundo refinery, which occurred around 9:30 p.m. on October 2nd, illuminated the night sky for miles. The fire originated in a production unit that refines aviation fuel, one of the eight units at the facility. Company and fire officials managed to contain the fire within the unit and prevent further spread.
Concerns arose among local and state officials following the accident, fearing a potential threat to the supply of aviation fuel to the Los Angeles International Airport (LAX). The refinery supplies approximately 40% of Southern California’s aviation fuel and employs around 1,225 workers. Operating since 1911, the facility currently produces about 110,000 barrels (approximately 4.62 million gallons) of gasoline daily, accounting for around 20% of Southern California’s gasoline supply.
Despite a temporary decrease in production post-fire, Chevron assures continued supply to its customers. Allen stated that they have been meeting customer demands throughout the incident and expect to maintain supply as operations gradually resume. The refinery remains operational, producing transportation fuels, albeit at reduced output.
In order to restart the closed equipment, the refinery must utilize intermittent safety flaring procedures to avoid exposure to excessive oil and gas pressures.
The specific cause of the explosion and fire is still under investigation, with Chevron collaborating with the California Occupational Safety and Health Administration.
Some energy experts believe that this unexpected refinery incident could further drive up California’s already high oil prices. In recent years, the state has experienced supply shortages leading to price surges. However, Chevron indicates that current gasoline supply for Southern California is higher than usual.
Michael Mische, a professor at the Marshall School of Business at the University of Southern California, pointed out in an article on October 6th that while the extent of damage to Chevron’s refinery is unclear, the closure of two other refineries in California will have a direct impact on the market.
He stated that the Phillips 66 refinery near Chevron’s El Segundo facility received its final batch of crude oil on September 30th and plans to cease operations entirely on October 16th. Combined, Chevron and Phillips 66 account for approximately a quarter of California’s daily production capacity.
In addition, Valero’s Benicia refinery in Northern California plans to shut down in April 2026. The supply crisis is further exacerbated by the San Pablo Bay oil pipeline operated by Crimson Midstream. The company indicated that the pipeline incurs a monthly loss of $2 million, putting its financial stability at risk. The pipeline transports petroleum from Bakersfield to Northern California.
In the absence of prompt approval by the state government to increase oil transportation fees and other measures, the pipeline might cease operations within months, forcing two refineries in the San Francisco area to import more oil from Asia.
Considering the closure of at least two major refineries and potential losses from a primary pipeline, Mische estimates that short-term gasoline prices may rise by at least 3-8 cents per gallon by October 31st. In the worst-case scenario, prices could spike up to 23 cents per gallon by the end of December.