An expected stronger hurricane season than average raises the risk of weather-related production outages in the U.S. oil industry, the U.S. Energy Information Administration said on Tuesday.
WHY IT MATTERS
A large portion of U.S. oil production and the bulk of the country’s refineries are in areas prone to hurricanes along the U.S. Gulf Coast.
That concentration means more than 1 million barrels per day of U.S. refining capacity, which is roughly 5% of daily U.S. petroleum consumption, is likely to be shut in anticipation of a major storm, the government agency said.
Weather events can also disrupt supply chains, as witnessed last year in Florida, when a rush to evacuate ahead of Hurricane Milton caused widespread outages at fuel retail outlets.
BY THE NUMBERS
Researchers at Colorado State University estimate this year’s hurricane season, which typically runs through the beginning of June to the end of November, will exceed the average from 1991 through 2020, with around 17 named storms expected this year compared to the average 14.
Reports from AccuWeather show meteorologists expect three to six storms with direct impacts on the United States, the EIA said.
Five hurricanes made landfall in the United States last year, knocking out millions of barrels of oil and gas output and disrupting fuel supply in Florida, the agency said.
(Reporting by Shariq Khan in New York; editing by Barbara Lewis)