Hurricane Isaias, classified as a Category 3 storm with winds reaching 120 miles per hour, is disrupting oil production in the Gulf of Mexico, leading to the shutdown of approximately 1.3 million barrels per day, or 63% of U.S. production in the region.
The storm is expected to make landfall near Mississippi, Alabama, and the Florida panhandle, potentially affecting Chevron's refinery in Pascagoula and Vertex Energy's facility in Saraland, which together account for 2.4% of U.S. refining capacity. With Gulf Coast refineries operating at 95% capacity, there is little room to compensate for lost production.
This disruption comes at a time when diesel prices are already high due to geopolitical tensions affecting global refining capacity. Analysts note that past outages have led to rising fuel prices, as refineries reduce crude demand and fuel output. Additionally, tanker traffic is expected to be delayed, impacting the delivery of refined products to markets, particularly in Florida