Phillips 66 PSX, the Houston, TX-based oil giant, has confirmed plans to shut down its 147,000 barrels-per-day Los Angeles refinery by October, CEO Mark Lashier announced at the Piper Sandler Energy Conference. The company had previously indicated it would idle the facility in the fourth quarter of 2025 due to the increasing challenges faced by the refining sector in California.

PSX’s Refinery Closure Could Impact Fuel Supply and Prices

The decision to close the Los Angeles refinery could have a significant impact on California’s fuel supply and prices. Historically, Los Angeles spot CARBOB gasoline prices surged to nearly $5 per gallon in September 2022 and 2023. The shutdown, combined with seasonal refinery maintenance and the transition from summer to winter fuel grades, could create supply constraints in the fall.

PSX’s Refinery Shutdown Coincides With Seasonal Supply Risks

California's gasoline demand typically remains robust in early fall due to favorable driving conditions. With the planned closure, analysts anticipate potential market disruptions, particularly if additional refinery outages occur simultaneously. The shutdown underscores broader challenges for refiners operating in California, including regulatory pressures and shifting market dynamics.

Phillips 66's move highlights the evolving landscape of the refining industry in the state, with long-term implications for fuel availability and pricing across the region.

PSX’s Zacks Rank & Key Picks

Currently, Phillips 66 carries a Zack Rank #3 (Hold).

Investors interested in the energy sector may look at some better-ranked stocks like Archrock Inc. AROC, NextDecade Corporation NEXT and Oceaneering International, Inc. OII. While Archrock presently sports a Zacks Rank #1 (Strong Buy), NextDecade and Oceaneering each carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Archrock is an energy infrastructure company based in the United States with a focus on midstream natural gas compression. It provides natural gas contract compression services and generates stable fee-based revenues.

NextDecade is an emerging player in the LNG space with its Rio Grande LNG project in Texas. As demand for LNG continues to grow, the company’s strategic investments in infrastructure and planned liquefaction capacity provide strong upside potential. With the global LNG market expanding, NEXT is well-positioned to tap into the increasing export demand from the United States.

Oceaneering International delivers integrated technology solutions across all stages of the offshore oilfield lifecycle. With a geographically diverse asset portfolio and a balanced revenue mix between domestic and international operations, the company effectively mitigates risk. As a leading provider of offshore equipment and technology solutions to the energy sector, OII benefits from strong relationships with top-tier customers, ensuring revenue visibility and business stability.

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