US Refining Capacity Shrinks Amid Key Plant Shutdowns

The U.S. saw a 1% decline in refining capacity by January 2026, largely due to significant plant closures on the West and Gulf coasts. Despite losses from two major sites, modest gains elsewhere helped limit the overall reduction to 250,000 barrels per day.

U.S. refining capacity witnessed a notable decrease during 2025, ending the year with a capacity of 18.2 million barrels per calendar day as of January 1, 2026. This marks a reduction of over 250,000 barrels per day, or approximately 1%, compared to the previous year, primarily driven by high-profile plant shutdowns along the West and Gulf coasts.

A report from the U.S. Energy Information Administration highlighted the drop in total operable atmospheric distillation capacity, which included 130 refineries as of January 2026—down by two facilities from the prior year. Key closures, such as LyondellBasell in Houston and Phillips 66 in Los Angeles, accounted for nearly 400,000 barrels per day, though minor capacity increases elsewhere mitigated the broader impact.

The Phillips 66 shutdown significantly affected California's energy landscape, cutting West Coast capacity by 5%. This effect is amplified by limited infrastructure linking the West Coast to other oil hubs. Meanwhile, the Gulf Coast absorbed the Houston closure without major disruptions. Overall, company rankings saw slight shifts, with Chevron overtaking PBF Energy as the fifth-largest refiner.