Hurricane season: disruptions to refinery operations

Between 17 and 25 storms are expected and could result in significant disruptions to oil production

Current reports indicate a downward trend in fuel prices, with a national average below $4 per gallon. However, projections of an active hurricane season could trigger a shift in this dynamic.

According to the National Oceanic and Atmospheric Administration (NOAA), between 17 and 25 named storms are expected, which could cause significant disruptions in oil production and refinery operations, especially in the Gulf of Mexico, where much of the U.S. offshore production is concentrated.

Refineries in Texas and Louisiana, representing nearly half of the national refining capacity, are particularly susceptible to flooding and power outages during extreme weather events. During hurricanes, these facilities could face serious operational challenges, leading to the temporary suspension of a considerable portion of the country’s oil production. Estimates suggest that up to one million barrels per day could be shut down due to these weather events.

Supply chain disruptions and natural gas risks

In addition to the impact on production, hurricanes can create disruptions in the supply chain for petroleum products. For example, transportation of fuel from Gulf refineries to destinations such as Florida is primarily by barge. During weather events, these transfers could be affected, which could result in fuel shortages in regions that rely on these deliveries.

As a result, fuel prices are likely to increase if adverse weather conditions significantly affect oil production and distribution in the Gulf of Mexico region. This could have repercussions not only nationally but also internationally, given the crucial role this region plays in the global energy market.

The U.S. Gulf Coast exports 13 billion cubic feet per day of natural gas capacity, making hurricanes a serious threat to this fuel as well. Electrical and maritime infrastructures, especially in liquefied natural gas facilities, are particularly vulnerable.

Port preparation for hurricane season

Texas ports prepare for hurricane season with detailed plans addressing preparation, response, and recovery from these adversities. The Coast Guard monitors conditions while ports closely collaborate with various stakeholders and emergency services.

Despite having established plans, risk assessment is crucial before each weather event. The Port of Houston maintains a rescue team on-site during storms to assess damages immediately. Experience with past storms, such as Harvey, has transformed the perspective of many emergency management leaders.

NOAA Administrator Rick Spinrad, Ph.D., emphasized the agency’s commitment to providing crucial life-saving information during the upcoming hurricane season. NOAA is implementing new tools and improving its observation and forecasting systems to address these challenges.