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        The Annual Equipment of Pipeline and Oil &Gas Storage and Transportation Event
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        The 26thBeijing International Exhibition on Equipment of Pipeline and Oil & Gas Storage and Transportation

        ufi

        BEIJING, China

        March 26-28,2026

        LOCATION :Home> News> Industry News

        California's dirty oil gets pricey amid Venezuela sanctions

        Pubdate:2019-02-20 10:39 Source:liyanping Click:

        CALGARY and NEW YORK (Bloomberg) -- California doesn’t usually come to mind when talking about the U.S. oil boom, but the state’s dirty oil is commanding an increasingly large premium amid an international shortfall of dense, high-sulfur crude.

        Refiners in the Golden State have been forced to import most of their crude as the state’s production has dwindled. While production from the Permian Basin of West Texas is overflowing, a lack of transportation options is keeping it from reaching the Golden State cheaply.

        The average posted price for Midway-Sunset crude on Friday was $60.54/bbl, nearly $5 above U.S. benchmark West Texas Intermediate futures, and near the all-time high of $5.06 premium set in November in data stretching back more than two years. More than 22 MMbbl of the oil that’s heavier than such benchmarks as Mexican Maya or Western Canadian Select was pumped from the San Joaquin Valley in 2017.


        Such pricey crude is the result of a tightening market due to U.S. sanctions on Venezuela, mandatory production curtailments in Canada and cuts of heavy, sour grades by OPEC members such as Saudi Arabia, John Auers, executive V.P. at energy consultant Turner Mason & Co. in Dallas, said by phone.

        Local factors also play a role, as California’s refiners lack many pipeline or crude-by-rail links to the rest of the country, Auers said. As such, accessing light, domestic grades produced in the Bakken or Permian Basin is harder for California plants than for those on the Gulf Coast.

        “They probably have less flexibility,” he said. “The guys in the Gulf, have always had more access to other grades.”

        Unlike the U.S. as a whole, California’s dependence on foreign oil imports has been growing steadily since the 1980s as the state’s own crude output and that of Alaska’s has diminished.

        Without surplus production, not much California crude makes its way to foreign markets. Districts associated with the state shipped out nearly 950,000 bbl in 2017 to the Bahamas, the most recent exports, according to U.S. Census Bureau data compiled by Bloomberg.

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