The planned shutdown of Phillips 66’s Los Angeles refinery by late 2025 serves as a significant development in the U.S. energy sector, indicating a shift towards decarbonization and renewable energy sources. With a capacity of 139,000 barrels per day, the closure highlights the challenges faced by traditional refining assets in the wake of evolving market dynamics and regulatory pressures. The closure will impact California's refining capability and lead to supply tightening, potentially causing price risks in the region. The Energy Information Administration foresees a decline in U.S. refining capacity by the end of 2025, with closures like this contributing to the trend. The broader trend of declining gasoline demand, increased electric vehicle adoption, and regulatory hurdles is reshaping the refining industry, with companies like Phillips 66 and Valero exploring renewable energy options. Phillips 66's Rodeo facility's transition to renewable diesel and sustainable aviation fuel aligns with California's low carbon fuel standards, while Valero's investments in renewables show a shift towards sustainability. Investors are urged to focus on resilient refining assets in regions like the Gulf Coast and prioritize companies actively engaging in the energy transition. Monitoring market indicators such as LCFS credits and global demand for sustainable aviation fuel is key to understanding the evolving landscape. While regulatory changes and feedstock availability pose risks, opportunities in renewable diesel and EV battery materials present avenues for growth. The article concludes by emphasizing the importance of adapting to the energy transition to thrive in the changing market environment.