Chevron to buy oil drilled off the coast of Santa Barbara

March 26, 2026

By KAREN VELIE

After Chevron threatened to close its refineries in California due to overregulation from Gov. Gavin Newsom’s Administration, the oil giant announced it will soon be purchasing oil drilled of the coast of Santa Barbara from Sable Offshore, the latest skirmish in the ongoing battle over oil production in The Golden State.

Initially, Chevron plans to buy 20,000 barrels of oil a day from Sable’s platforms off the coast of Santa Barbara, according to Bloomberg. Chevron will then process the crude at its El Segundo refinery in Los Angeles County.

Earlier this month, President Donald Trump directed Sable Offshore to resume oil production off the coast of Santa Barbara under the Defense Production Act. Sable Offshore has been unable to produce oil because of ongoing disagreements with California regulators over permitting its Santa Ynez pipeline, which is needed to transport the crude from the oil platforms to a refinery.

Sable Offshore is expected to produce approximately 50,000 barrels of oil per day, “a 15% increase to California’s in-state oil production, that can replace nearly 1.5 million barrels of foreign crude each month,” according to the Department of Energy.

It is estimated that more than 60% of the oil refined in California is shipped in from overseas, including oil that travels through the Strait of Hormuz.

In a March 13 press release, Newsom condemned President Trump and his “reckless, and illegal orders invoking the Defense Production Act to attempt to restart the Sable Offshore pipeline.” Newsom argued that oil from the Sable Offshore pipeline would be a “drop in the bucket” and would not impact oil prices.

“Donald Trump started a war, admitted it would spike gas prices nationwide, and told Americans it was a small price to pay,” Newsom said in his press release. “The Trump administration and Sable are defying multiple court orders, and we will see them back in court.”

While threatening to close its oil refineries in California, Chevron argued overregulation in California is contributing to price spikes amid the war in Iran. Because of California’s taxes and regulations, California’s price per gallon is well above the national average.

“California refineries supply a broad range of transportation fuels, including aviation fuels that are critical to commercial and military operations, and they operate near major ports, military installations, and strategic hubs serving the Pacific region,” Chevron wrote in a letter to Newsom earlier this month. “Continued erosion of California’s refining capacity risks increased reliance on imported fuels that are slower to arrive, more exposed to global supply disruptions, and less reliable during emergencies or periods of heightened geopolitical risk.”

For more than six months, state and federal regulators have battled over the reopening of the Santa Ynez pipeline. While the State Fire Marshal argues Sable had not yet completed all of the repairs necessary to restart the pipeline, federal regulators claim they have jurisdictional control.

Even though the Defense Production Act grants the president powers to ensure the nation’s defense by expanding and expediting the supply of materials and services from the domestic industrial base, Newsom argues Trump cannot stabilize oil markets by increasing U.S. production.

“The only thing that will actually stabilize global oil markets — and thus gasoline prices for American drivers — is reopening the Strait of Hormuz, Newsom said. “But Trump has offered no plan to do that. The United States cannot drill its way out of a crisis of the president’s own making.”

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