(Bloomberg) —
Nearly 500,000 barrels per day of oil refining capacity are in the path of Hurricane Isaias, increasing the chance that the US fuel market, which already has tight supplies, will experience significant production losses.
The storm poses risks not only to people but also to fuel production facilities, which could lead to higher prices at gas stations across the country. As of Wednesday, the average price for gasoline was $4.36 per gallon, according to AAA. Diesel prices reached a record high in September and were around $6.28 per gallon on Wednesday.
Hurricane Isaias is gaining strength and is expected to hit the northern Gulf Coast late on Friday or early Saturday, threatening areas in Alabama, Mississippi, and the Florida Panhandle. The storm has already forced offshore oil producers to shut down over 60% of their crude output, and this comes at a time when oil markets are already struggling due to the ongoing conflict in Iran.
Fuel markets could face even more price increases due to limited US gasoline and diesel inventories. Supplies have been tight even as refiners work hard to increase output, meaning that even minor production losses from Isaias could lead to significant price hikes for consumers at the pump.
Here’s a summary of the facilities that could be affected:
- Chevron Corp.’s Pascagoula, Mississippi, refinery is located on the western edge of the projected storm path as of Thursday, and the southeast Mississippi coast is currently under a hurricane warning.
- The refinery has the capacity to process 356,000 barrels of crude oil per day.
- Chevron is monitoring the storm and making “appropriate preparations” at its onshore facilities.
- Vertex Energy Inc.’s Mobile, Alabama, facility is directly in the projected path of the storm.
- This refinery can process 88,000 barrels of crude oil each day.
- Vertex has not yet responded to requests for comments.
- Hunt Refining Co.’s Tuscaloosa, Alabama, refinery is further inland but is still under a tropical storm watch and in the storm’s forecast path.
- The refinery has a capacity to process 50,000 barrels of crude oil daily.
- Hunt Refining has not yet responded to inquiries.