The Trump Administration has issued an emergency order for Sable Offshore to restart the Santa Ynez Unit and its associated pipeline, a move that could significantly boost U.S. oil supply to California refineries. This development comes amid constrained global oil supplies due to the ongoing conflict with Iran, which has disrupted oil flows from the Persian Gulf and pushed crude prices higher.
The Santa Ynez Pipeline has been inactive since a 2015 oil spill, but Sable Offshore, which acquired the system from ExxonMobil, is now poised to resume operations. The company anticipates selling 50,000 barrels per day by April 1, leveraging its storage capacity of 540,000 barrels. However, the pipeline’s future is uncertain due to ongoing opposition from California state agencies, raising concerns about potential regulatory hurdles and operational risks.
For investors, Sable Offshore presents a high-risk opportunity given its reliance on the Santa Ynez system. Those interested in the implications for oil supply and pricing dynamics should delve into the full article for a comprehensive analysis.
Source: fool.com