Falling domestic crude oil production in the U.S. West Coast has contributed to increased crude oil imports and a higher refinery acquisition cost of crude oil

Falling domestic crude oil production in the U.S. West Coast has contributed to increased crude oil imports and a higher refinery acquisition cost of crude oil. Refineries on the U.S. West Coast (PADD 5) have increased their imports of crude oil as local production in Alaska and California has declined. In 2024, PADD 5 refiners received ~900 thousand barrels per day (kb/d) of domestic crude oil, an all-time low. 

West Coast refineries also rely on crude oil railed in from the Bakken (North Dakota & Montana), which has generally been more expensive to transport than locally sourced crude oil. 

The combination of increased crude-by-rail and imported crude oil can contribute to a higher refiner acquisition cost of crude oil, which reflects not only the price of crude oil, but also the transportation costs to deliver it to a refinery. As a result, the relative premium of PADD 5’s refiner acquisition cost of crude oil has gradually increased, from near parity with the U.S. average in the early 2000s to ~5% above it now.