Gas Prices Could Rise If Gulf Rigs and Refineries Don't Come Online Soon
Energy companies shut down refineries and offshore rigs ahead of, and in response to, Hurricane Harvey. As a result, the region is producing about 3 million fewer barrels a day, or 15 percent of the total daily consumption of oil in the U.S, via Texas Standard.
Harvey has already unleashed untold damage on and near the Texas Gulf Coast — an area that is also home to nearly half of the nation’s oil-refining capacity. Energy companies also shut down many offshore rigs in the Gulf ahead of the storm.
“Because of precautionary measures, we’ve seen as much as 3 million barrels a day, potentially coming offline here. …This is going to have an immediate effect on supply in the region, but it also supplies as far up as the Midwest and the northeast and the Southeast as well,”
Smith says Gulf Coast refineries process half of all oil products in the U.S. Gas prices could go up 25 cents per gallon, or more, if any of these refineries are damaged or aren’t operational soon.
Harvey will also have an impact on the global energy market because Texas exports millions of barrels of oil abroad, and imports petroleum products from around the world, Smith says.