NEW YORK, Aug 29 (Reuters) - Last month's CrowdStrike IT

outage that grounded scores of flights created new problems for

California's fuel market, forcing U.S. traders to store jet fuel

destined for the state on waterborne tankers, storage broker The

Tank Tiger told Reuters this week.

The outage exacerbated existing constraints on petroleum

storage in California, where policies aimed at ending fossil

fuel usage have made it harder to setup new oil and gas

infrastructure.

"When it comes to petroleum products storage in California,

there has been no room at the inn for several years," Ernie

Barsamian, founder of U.S. terminal storage clearinghouse, The

Tank Tiger said on Wednesday.

But California's location on the U.S. West Coast makes it a

major petroleum trading hub, keeping demand high. That opens the

region to outsized fuel price shocks during periods of

disruptions, such as the IT outage or refinery snags.

"Despite prevailing demand, permitting for new storage tanks

(in California) is a cumbersome process," Barsamian said. As a

result, storage costs in California are twice as high as trading

hubs in New York Harbor or Houston, he said.

California's Certified Unified Program Agency, responsible

for implementing the state's Aboveground Petroleum Storage Act

Program, did not immediately respond to a request for comment.

When flights were grounded in July, the unconsumed jet fuel

could not find a home in California, and had to be re-positioned

to waterborne locations off the coasts of Houston and New

Orleans, Barsamian said.

Traders use ships as storage only as a last-resort when land

storage is full or unavailable, as keeping the vessels in use

longer delays their journeys, tightening the market and

increasing costs.

Jet fuel inventories in onshore tanks dotting the U.S. West

Coast shot up to over 12 million barrels in the week ended July

26, a record high. The CrowdStrike ( CRWD ) outage began on July

19.

Strong demand for the product has led to West Coast imports

increasing significantly this year, analysts at ship-tracking

service Kpler said. That has kept inventories higher than normal

this year.

West Coast imports from within the U.S. and outside have

averaged about 135,000 barrels a day this year, about 25,000 bpd

higher than last year, Kpler data showed.

West Coast jet fuel stocks stood at 11.8 million barrels

last week, nearly 28% higher than last year.