California’s BIZARRE Import From Bahamas

An oil pump jack operating against a sunset backdrop

California drivers are paying for a policy-made supply chain so tangled that American gasoline now takes a vacation in the Bahamas before it’s allowed to come home.

Quick Take

California’s gasoline imports surged as refinery capacity shrank, pushing the state to hunt for supply anywhere it can land a tanker.
A growing share of those barrels “arrive from the Bahamas,” even when the fuel originally came from the U.S. Gulf Coast.
The Jones Act and the West Coast’s lack of pipelines from the Gulf make direct domestic shipments far harder and often more expensive.
California’s unique CARBOB gasoline blend tightens the market further, because not every refinery can make what the state requires.

The Bahamas detour exposes California’s shrinking margin for error

California’s modern gasoline problem isn’t that the world ran out of fuel; it’s that the state ran out of flexibility. Refinery closures and outages narrowed the buffer that used to absorb hiccups. When Phillips 66 shut a Los Angeles-area refinery in October 2025, imports climbed to their highest levels in years, and by November more than 40% of imported gasoline came via the Bahamas. That headline number matters because it signals dependence, not just trade.

Tankers made the story concrete. Cargoes such as the Silver Moon reportedly brought roughly 300,000 barrels to Los Angeles after departing from the Bahamas, and another tanker, the Torm Dulce, headed toward the San Francisco area in early 2026. Imports later cooled from the fall peak, but the Bahamas still ranked among the largest non-U.S. sources. Translation for consumers: the system may look calm on a chart, right until it isn’t.

Jones Act economics: when a U.S. law makes foreign routing cheaper

The Jones Act requires that cargo shipped between U.S. ports travel on U.S.-built, U.S.-owned, and U.S.-crewed vessels. Supporters call it industrial policy for maritime strength; critics call it a cost multiplier with too few ships available. Analysts point to a tiny Jones Act-compliant tanker fleet compared with global shipping. When California can’t pull sufficient barrels from in-state refining, the “obvious” fix—send gasoline from the Gulf Coast—collides with that constraint.

The Bahamas route works because it reframes the trip. Gasoline or blendstocks can move from the Gulf Coast to a Bahamian storage hub like Freeport on non-Jones-Act ships, then continue onward as an import. It sounds absurd, and that’s the point: the market picks the least-bad option available under the rules. From a conservative, common-sense view, this is what happens when government restrictions pile up—people don’t stop needing fuel; they just pay to route around the obstacles.

CARBOB: the specialized blend that turns supply tightness into price spikes

California’s fuel market isn’t plug-and-play. The state relies on a cleaner-burning boutique gasoline, commonly described as CARBOB, and that specialization narrows the number of suppliers who can meet spec quickly. Some imports arrive as blendstocks such as alkylate, which can help produce compliant gasoline. The practical effect is that California can’t always replace a lost refinery barrel with a generic barrel from somewhere else; it must replace it with the right barrel.

This is where the open loop tightens. California’s environmental aims reduce certain emissions, but the refinery system that makes compliant fuel is aging and shrinking, and the state has few backup routes when something breaks. Each closure removes capacity and, just as importantly, removes operational redundancy. Industry voices have warned of incremental price impacts—pennies that become dollars when outages hit. A market built on razor-thin slack doesn’t forgive mistakes or storms.

Refinery closures create leverage, and the consumer eats the spread

Refiners respond to incentives, not speeches. When California prices rise above other markets, traders and refiners chase the premium. Analysts have described arbitrage pulling supply from the Gulf Coast and from overseas when the margins justify the voyage, fees, and time. That sounds like capitalism working—and it is—but the lesson is uncomfortable: California has effectively designed a system where emergency supply often arrives only after prices signal pain.

Politics adds another layer. State leaders face a collision between ambitious emissions goals and the daily reality that millions of people still drive to work, haul goods, and run small businesses on liquid fuel. Reports describe officials softening stances amid shortage fears, including very public worries about eye-watering pump prices. That’s not surrender; it’s recognition that energy policy must pass the reliability test. You can’t regulate your way into abundance.

What happens next: more imports, more volatility, and fewer “easy” fixes

More refinery capacity appears set to come off the board, including a planned Northern California refinery closure in 2026. Each loss increases the odds that imports become a permanent fixture rather than a temporary pressure valve. Some analysts argue Asian supply can be more practical long-term for California than Gulf-to-Bahamas-to-California routing, especially when you factor in shipping dynamics. Either way, the state edges toward an island economy without the isolation—dependent on ships and timing.

The conservative takeaway doesn’t require villainizing anyone: California built a complex fuel ecosystem, constrained domestic logistics, and then watched resilience disappear one refinery at a time. The Bahamas detour is the symptom that’s easy to mock, but it’s also a warning label. When policy narrows options, markets don’t create miracles; they create workarounds. The bill shows up at the pump, and the people least able to absorb it pay first.