Under the Jones Act, any goods shipped between US ports must travel on US-built, owned and operated vessels…Gulf Coast refiners can capture higher margins by sending barrels west, De Haan said. Routing through the Bahamas allows them to avoid higher-cost US-flagged shipping…
Japan and India both made up a greater proportion of foreign supply — though the Bahamas was the third-leading non-US supplier. Asia is a more practical source of gasoline for California, De Haan said, noting that refineries in the region already produce gasoline blendstock at the grade specifically required by California, and it can arrive without paying to transit the Panama Canal. Both India and South Korea supplied more product to California last year than the Bahamas.
The economic appeal of shipping US-refined gasoline on cheaper foreign vessels has been waning in recent months, after the US eased sanctions on Venezuela, a move that triggered an increase in regional freight prices. Foreign ships, which were nearly $4 a barrel cheaper than US-flagged ones in the past year, are now barely $1 cheaper…Still, the Bahamian trade route, which began picking up steam in the early months of 2025, has become a key piece of California’s troubled supply chain.
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