Refineries brace for crude drought
Marketplace
Marketplace
4.6 • 8.5K Ratings
🗓️ 12 March 2026
⏱️ 25 minutes
🧾️ Download transcript
Summary
President Trump’s war with Iran continues to provoke economic consequences. With the Strait of Hormuz closed, Middle East crude oil will be blocked from reaching refineries, including those in California. In this episode, what happens if those refineries run out of oil. Plus: Single-family home construction slows as costs rise, winter Paralympians face unique obstacles, and fickle weather reshapes the ski resort business model.
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Transcript
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| 0:00.0 | Navigating the pipelines of the global oil economy, plus let's squeeze in some winter sports before the season is done. |
| 0:09.3 | From American Public Media, this is Marketplace. |
| 0:38.5 | From Minnesota Public Radio in St. Paul, I'm Kimberly Adams in for Kai Rizdal. It's Thursday, March 12th. Good to have you along. We're going to start today's program by looking at oil and the global economy right now. The president's war in the Middle East is restricting the supply of crude to the rest of the world, and Iran said today that it will keep the Strait of Hormuz closed, |
| 0:44.7 | so oil prices jumped. And Brent Crude, which is the specific kind of oil that's no longer |
| 0:50.4 | flowing out of the Mideast, topped $100 a barrel. |
| 1:00.1 | Even with more than 170 million barrels of oil being released from the Strategic Petroleum Reserve, |
| 1:07.9 | some of the refineries that convert crude oil into the energy we consume just don't have access to the raw material they need. And as Marketplace's Justin Ho reports, the war could end up causing many |
| 1:12.5 | refineries to shut down production. The kind of oil that's getting cut off by this conflict |
| 1:17.8 | mostly goes to Asia. A lot of that crude goes to China. Malaysia, Singapore, India is very, |
| 1:26.1 | you know, important also. |
| 1:28.0 | That's Anna Mikulska, head of analytics at CGCN Group. |
| 1:31.6 | She says some Middle Eastern crude also heads to refineries in California. |
| 1:35.1 | So California has imported a lot of its crude from Iraq, for example. |
| 1:42.3 | This is a lot of barrels that California will have a problem replacing. |
| 1:48.4 | Refineries there can't just switch to the heavier sulfur-rich oil that comes from Western Canada, |
| 1:53.9 | because they aren't set up to handle it. |
| 1:56.0 | You have to build the infrastructure. You need the desulfurization infrastructure. |
| 2:00.7 | And that takes a long time, |
| 2:02.4 | and more importantly, it takes a lot of capital investment. Hugh Daigle is a professor of |
| 2:07.0 | petroleum engineering at the University of Texas. He says even though the U.S. produces a lot of |
| 2:11.3 | its own oil around the Gulf of Mexico, California isn't connected to that supply. |
| 2:16.3 | The easiest way to move crude oil around domestically, obviously, is in pipelines. |
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