Marketplace - Refineries brace for crude drought

Episode Date: March 12, 2026

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.Every story has an economic angle. Want some in your inbox? Subscribe to our daily or weekly newsletter.Marketplace is more than a radio show. Check out our original reporting and financial literacy content at marketplace.org — and consider making an investment in our future.

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and Rucats and Rucats to RUGas a month. navigating the pipelines of the global oil economy. Plus, let's squeeze in some winter sports before the season is done. From American Public Media, this is Marketplace. 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, so oil prices jumped. And Brent Crude, which is the specific kind of oil that's no longer flowing out of the Mideast, topped $100 a barrel. Even with more than 170 million barrels of oil being released from the Strategic Petroleum Reserve, 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 refineries to shut down production. The kind of oil that's getting cut off by this conflict mostly goes to Asia. A lot of that crude goes to China. Malaysia, Singapore, India is very, you know, important also. That's Anna Mikulska, head of analytics at CGCN Group. She says some Middle Eastern crude also heads to refineries in California. So California has imported. a lot of its crude from Iraq, for example.

This is a lot of barrels that California will have a problem replacing. Refineries there can't just switch to the heavier sulfur-rich oil that comes from Western Canada, because they aren't set up to handle it. You have to build the infrastructure. You need the desulfurization infrastructure. And that takes a long time. And more importantly, it takes a lot of capital investment. Hugh Dagle is a professor of petroleum engineering. at the University of Texas. He says even though the U.S. produces a lot of its own oil around the Gulf of Mexico,

California isn't connected to that supply. The easiest way to move crude oil around domestically, obviously, is in pipelines. There's not a lot of pipeline infrastructure to get from Texas to California, believe it or not. There's none, in fact. Refineries in California and Asia still have oil that can refine in the meantime. But Mark Broadbent, with Wood McKenzie, says there is a point when that will start to dry up. You need to keep a certain amount circulating through your units in order to keep them online. At that point, you'll be looking at refineries that are going to shut units down because there's simply not enough material to keep them running. Brad Bent says even if the war were to suddenly end and oil started flowing through the Strait of Hormuz again, it could take a while for those refineries to come back online.

He says if they partially shut down, it could be one or two weeks. And if you're looking at the whole refinery down, then yeah, that becomes more like a month to one to two month process. in terms of starting up the entire refinery. Robben says refineries would likely want to turn the lights back on as quickly as possible, because demand for fuel is still high and so are prices, which means refinery profit margins are up. So that's a huge incentive for refiners to keep running as much as possible. Bradbent says energy prices are likely to stay high,

even if the war ends suddenly. I'm Justin Howe for Marketplace. Wall Street today, once again, the markets are following the constantly shifting dynamic of this war and its impact on oil prices. We'll have the details when we do the numbers. So on the show yesterday, we were talking about how the inflation numbers revealed a drop in egg prices, but that those savings have been kind of offset by rising meat prices, especially beef. According to the Bureau of Labor Statistics, the average cost of a pound of beef across the U.S. sits at $6.73. To give you a comparison, in January of 2021, the average price,

sat at just under $4. So we checked in with our cattle rancher regular, Nate Bradford of G-Line Ranch in Bowley, Oklahoma. We kicked off year pretty good. I would say this season for us was probably kind of a medium year. You know, we had quite a few customers show up. We made lots of summer sausage, smoked a lot of meat. We had to get in for the wintertime.

You know, we got some pretty harsh seasons of cool weather. It didn't last too long, but we ended up with a little bit of snow. but we did need it, you know, needed that moisture, even though it came with some cold temperatures because we was pretty dry, really, in the state, coming into the fall. You know, we normally have around 150 plus mama cows, but we have trinkled down with got a herd's down a third, and we really want to rebuild,

but the conditions have to be really, you know, really right, right. So try to capitalize as much as we can. market, but also we don't want to pay too much for our cattle and the markets fall out of it. So it's been a lot of uncertainty in the market, so that's kind of been slowing us down. Right now, currently fertilizes skyrocketed. Diesel fuel has skyrocketed. So when we go into the summer, our contracts will be up, and we're going to pay a little bit more money for the amount of feed.

And already our markets are starting to fall off due to, you know, due to war right now. So, you know, we've been over, which also is affecting, you know, what we're giving for the price of fuel and it's created a whole other heck of situation in our commodity markets. So prices or our cattle has been pretty good. You know, demand for this beef is high. You know, it goes back to we are at the lowest number in history with cattle numbers for producers in the United States. So it does help keep these, stabilize these markets. but you have to really be on your P's and Q's when it comes to selling points because if you try to decide to go to the sale one day,

you may short yourself two to three hundred dollars ahead. That's how bald to it can be at times. You know, being a small family farmer ranch, it's, it feels good, you know, but I'll say it has its challenges because we all have to manage and maintain a decent living. and as it costs everything, inflation, land prices, equipment have went up so much over the years, it's making really challenging for a person to have a next generation to get in this business. You know, this year, we just want to focus on making the best of everything we have. We don't want to spend no more money than we have to, and hopefully by doing that,

we can create other opportunities with our money and invest in and try to expand things like their process of facility. Nate Bradford of G-Line Ranch in Bowley, Oklahoma. Despite a week of false spring weather in many parts of this country, over in Italy, the Winter Paralympic Games are in full swing. And an average of 1.4 million viewers watched the primetime coverage this past Saturday on NBC and Peacock. Viewership for opening weekend was up 27 percent from the 2022 Beijing Paralymp.

and more fans are following the games and the athletes than ever. Here to talk all things winter Paralympics is Amy Purdy, a three-time Paralympic medalist in snowboarding. Her book, Bounce Forward, comes out later this month. Welcome to the show, Amy. Thank you so much for having me. So the Winter Paralympic Games started just about a week ago in Italy. You've competed in two rounds. You kind of wish you were there this time?

You know what? I love being on the side of things. I mean, I loved competing in the Paralympic games. I competed in Sochi, which was the very first time Paris snowboard was in the Paralympics. And then I competed in South Korea. But, you know, I thoroughly enjoy being on this side where I can just cheer everybody on. In addition to cheering everyone on, you've also been using your social media platforms to kind of raise awareness of some of the problems, actually, with the Paralympics. And you were recently talking about why the timing of the Paralympics. Paralympics is problematic. Can you lay that out for us? Absolutely. I mean, one of the greatest challenges that the Paralympians face is the conditions and the deteriorating conditions. Because

we compete in March, the snow would get so warm and so slushy. And they either keep the snow really slushy. And then you're literally snowboarding or skiing in just inches of slush that grabs your skis and you just can't perform at your best, let alone, you know, these athletes have prosthetic legs or a different type of disability. I have two prosthetic legs. So as an athlete, of course, we adapt. And as Paralympians, that's what we do best. But it just makes it so much harder to show up at your best. And so moving the Paralympics to a time where it's optimal for the athletes, because you want to be able to watch the athletes perform at their best. And it's just hard to do that in spring conditions.

The coverage of the Paralympic Games is also getting a lot of attention on social media because NBC did more than 3,200 hours of coverage for the Winter Olympics. But when it comes to the Winter Paralympics, they've only announced that they're going to have more than 270 hours of coverage. Plus, a lot of the folks who are trying to watch online are complaining that there's not a lot of commentary. It seems like there's quite a ways to go even in just terms of coverage of the events, much less people being able to access them. Absolutely. And from what I've seen is people want to watch them. You know, I'll get my audience on social media. I'll get people excited about it. You know, you've got to watch the Paralympics. So exciting. The athletes are amazing. The stories are amazing. And then we turned it on the other day. We turned on downhill skiing. And there was no commentary. We had to watch. no idea who we were watching, nothing about their disability, nothing about their story. You know, I competed in 2014 and 2018, but I just thought by this point, we would have way better coverage. And so somehow, I do feel like there needs to be some changes with not just timing of the

Paralympics, but of course, broadcasting. It can be difficult to make a living as an athlete in any circumstances when it comes to trying to get corporate sponsorships or trying to get other forms of funding. How do you see the sort of financial landscape for Paralympians and other paraathletes right now? I do believe that it's changing and improving, which is great. I mean, it's difficult across the board for Olympians and Paralympians. Most people don't realize that you really live on nothing. And you can't have another job either because you're expected to be, you know, training five, six days a week, plus traveling for all. the World Cups on the whole circuit to be able to lead up to the games, you're dedicated to the team

and what they pay is barely anything. So most Olympians and Paralympians are living on pretty much nothing. And if you think about Paralympians, we deal with adaptive equipment that's incredibly expensive. So I have two prosthetic legs. If I were to have to pay cash for these legs, they're $30,000. That's just for my walking legs, let alone if you want to snowboard and now you're paying for feet, specialized feet for snowboarding. I am seeing it grow and seeing it change, which is great, but there's definitely a lot more support that's needed for both Olympians and Paralympians. All right. So the Paralympics are ongoing. What are your recommendations for people who do want to watch? What should we be looking out for? What should we be watching? Absolutely. So, I mean,

para snowboard, I think it's just the most exciting Paralympic sport because I came from it, but it really is exciting. The other day there was side by side, which is called snowboard cross. That's the most exciting of all. Also, we still have hockey coming up. I mean, there's just some wonderful sports that are still being aired. And so if you see something that you like, if you hear a story that you like, you know, share it on social media. Let your friends know that you're watching it. Just let people know that it's going on. You know, all of that just kind of gets the buzz going around the Paralympics. And these athletes are still there competing hard going after gold. And so we want to make sure to show up and support them.

Paralympic medalist, Amy Purdy, thank you so much. Looking forward to watching. Thank you so much. Coming up. Some years you would make money when the snow was good. Some years you would not make very much money when the snow was bad. Leaving it up to fate or climate change. But first, the numbers.

Yeah, that was coming. The Dow Jones Industrial Average dropped 739 points. 1 and 6 tenths percent to close at 46,677. The NASDAQ gave up 404 points, 1 in 8 tenths percent, to finish at 22,311. And the S&P 500 fell 103 points, 1.5 percent, to end at 6672. Gig workers are getting hit hard by the price of gas right now, which is up 22 percent nationwide over the past month. And so are the companies that make the gig platforms. Technologies lost 2 and 7 tenths percent.

Lyft also declined 2 and 7 tenths percent. Bonds fell, the yield on the 10-year T-note rose to 4.26% and you're listening to Marketplace. Quarrest's Internet, of 300 megas, has the velocities rapid and confiables that you're busks. Perfected for streaming and gaming and to work. All right. All for only $45 dollars a month when you aggregates Coggs Mobile.

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mobile, is reduced after 20 gigas a month. This is Marketplace. I'm Kimberly Adams. The Census Bureau dropped some new housing numbers this morning. Single-family housing starts at the beginning of this year

were down 2.8% compared to December. Marketplace's Carla Javier looked into the reasons why new home building has been such a slog, and what changes in construction loan interest rates could mean for the market going forward. There are two big reasons why single-family starts have been slow, says Odetta Kushi at First American. For buyers on the demand side, she says, well, mortgage rates have come down a little bit.

When we zoom out, we can still see it's a very challenging affordability environment. And for builders on the supply side, she says things are expensive there too. You have, you know, labor issues, so skilled trade shortages and wage pressures, lots, so scarcity of lots, laws, so zoning constraints and permitting delays, lending. More about that in a second. And lumber, but really just materials, construction materials more broadly. To cover these costs, Robert Dietz of the National Association of Home Builders, says private, single-family home developers typically get loans. He says builders say if they could get access to more financing at a lower cost, they could build more. And the cost of that financing, he says, is...

Much more strongly connected to Federal Reserve policy and the short-term interest rates. But trying to predict what the Fed will do is complicated. Now there's the conflict in Iran and the resulting jump in oil prices to consider, too, says Stephen Bushbaum at TREP. All else equal. If prices go up, typically that means that our interest rates are going to go up to combat that inflation. But if the economy slows... That could mean that we have to cut interest rates to combat a weakening economy. By trying to stimulate growth.

If the Fed rate saw a cut, construction loans could too. For his part, Robert Dietz at the National Association of Home Builders says for now, he's still expecting the Fed to cut rates twice this year. though he thinks those could happen later than initially forecast. That would be an unambiguously positive development for the housing market. Because he says lower Fed rates mean lower construction loan rates, which would potentially mean more supply and lower prices for buyers. I'm Carla Javier from Marketplace.

We talked earlier about the Winter Paralympics, and even though it's March now, there is still a bit of the winter snow sports season left for those of us not quite ready for our Olympic or Paralympic debut. But as the warm weather rolls in and the snowpack disappears, it's time for ski resorts to start closing the slopes and do some accounting to see how the season went for them. But in the last few decades, that end of year tally has been looking at. different for ski resorts that accept certain ski passes. Roberto Ferdman is a senior video correspondent with the Wall Street Journal, where he produced a piece called How Vale Changed the Economics of the Entire Ski Industry. Roberto, welcome to the program. Thank you for having me.

It's nice to be here. So this piece really hinges on what's called the epic pass from Vale. What is it and how does it work? So season passes are not novel, but what Vail did, which changed the notion of how a ski mountain can collect money and when is they said, what if we didn't just sell a season pass, we sold a season pass that people could use across all of the mountains that we own, and we sold it at a very low price.

The only catch, the only thing that you had to do for us was you had to buy it before the ski season starts. And why was that an important catch? Their bet was twofold. One was it would be meaningful for their business to an extent that it was just worth it to collect money ahead of time in like one fell swoop, as opposed to the way in which it worked up until then, which is that some years you would make money when the snow was good, some years you would not make very much money when the snow was bad. And that was very difficult. I mean,

that led to lots of mountains closing throughout the United States. The second part of this is they bet that if we offered this incredible deal, we would get just more people to commit to skiing at Vale and do that in bulk. How has this pass model, like that Vail rolled out with the Epic Pass, changed the industry overall? It has turned Vail into a behemoth. Vail over the past almost two decades has gone from owning six resorts to now owning 42 resorts around the world. So there's now competition. There's icon pass.

It can be used at places like Aspen and Big Sky. and many others, not just throughout the country or continent, but the world. And it is also pushed the price of individual lift tickets. You know, the lift tickets that you buy at the booth when you come like day of up a lot. I mean, if you take Vail resorts, for instance, the peak of a day of lift ticket back in 2008 when Epic Pass was introduced was maybe around $100, just shy of $100. today, they sometimes reach almost $400, well over $300. And you can see that across most of the industry, especially in North America.

So you mentioned this a bit already, but in addition to the Epic Pass, there's the Icon Pass and the Indie Pass. What does it mean, especially for skiers and snowboarders, that this pass system is now so pervasive throughout the system? There are a lot of hardcore skiers who really resent the spread of mega passes. If you're someone who skis regularly, say at like a local mountain, you like to go during the week, you might be seeing more people than you would on a Tuesday or a Wednesday. The other thing that it has led to is overcrowding on really good ski days. This is truest at mountains like Vale, Park City, Whistler, and you don't have to look very hard or far. to find videos of overcrowding. I mean, the other thing that is created is this dichotomy

between those mountains which are owned by large conglomerates like Vail Resorts or participate in megapasses like ICON and those who don't at all. And you might see differences like, for instance, in the bells and whistles that are available at these independent mountains. They might have fewer amenities. The food might not be as diverse in terms of offerings, but the skiing is certainly a lot less expensive. So even though these passes have been such a big moneymaker for Vail and similar resorts, sales for that pass have been slowing in recent years. What do you see as the future of the system?

There's a sense that the reach of Epic Pass in particular has plateaued. And I think it's worth pointing out that they sell over 2 million epic passes each year. So they either have to figure out how to scale internationally, and that's much more difficult because the European ski market, for instance, works very differently, or it has to figure out how to get more people into its Epic Pass program. And the program is quite large, and it might have just reached its peak.

Roberto Ferdman is a senior video correspondent with The Wall Street Journal. Thank you so much. Thank you for having me. This final note on the way out today, if you've been wondering about whether the Supreme Court's recent ruling overturning some of President Trump's tariffs means a refund is coming your way, you're going to have to keep wondering for now. The Hill reports that Customs and Border Protection told a federal judge that it's more than 40% of the way there in terms of developing software

that could help businesses start getting tariff refunds, but it needs at least a few more weeks of performance testing. For consumers, who knows? Our daily production team includes Livy Burdette, Andy Corbin, Maria Hollenhorst, Sarah Leeson, Sean McHenry, Michaela Sia, and Sophia Terrenzio. Will Story is a supervising senior producer, and I'm Kimberly Adams. We'll see you tomorrow. This is APM.

Maybe you've had this thought before. What if I turn this hobby into a side hustle? attempting to turn painting into income may have been the worst idea I've ever had. I'm Rie Mechres and this week on This Is Uncomfortable, the pressure to monetize what we love. Can we turn our passion into a paycheck without killing the joy? Listen to This Is Uncomfortable wherever you get your podcasts.