The Caribbean hurricane season is threatening large-scale refinery operations in Texas, America's largest oil producer.
On Wednesday, July 3, local time, the National Hurricane Center (NHC) under the US National Oceanic and Atmospheric Administration (NOAA) announced that on Wednesday morning, Hurricane “Beryl” (Beryl) was downgraded from level 5 to level 4. According to NHC standards, category 4 and 5 hurricanes correspond to maximum wind speeds of 131 to 155 mph and 156 mph or more, respectively.
Beryl is the earliest recorded hurricane to increase to magnitude 5. It swept through the southeastern Caribbean Sea and is expected to hit the Caribbean's Yucatan Peninsula this Friday, then posing a threat to critical US oil and energy infrastructure along the Gulf Coast.
The NHC said the wind speed in Beryl reached a maximum of 157 mph, then weakened to 145 mph on Wednesday morning local time in the US. Government weather forecasters expect Beryl to “weaken somewhat” “within the next day or two,” but it will still be a “major hurricane” because it will “hit Jamaica and the Cayman Islands on Wednesday.”
Also on Wednesday, local time, the Mexican Meteorological Service issued a hurricane warning for the Yucatan peninsula, from Costa Maya in Puerto Rico to Cancun. The hurricane is expected to land on Friday. After passing through the Yucatan peninsula, Beryl is expected to go directly to the coast where Texas is located and move towards Louisiana. The region is home to major US oil and gas refineries.
Before the NHC announced that Beryl's wind power was weakening, energy giant Shell announced on Wednesday that it would suspend some of the company's drilling operations in the Gulf of Mexico. As a precautionary measure, the Division began evacuating non-essential personnel. Some of the products affected by the suspension of operations include medium acid oil HOOPS crude oil HOOPS Blend produced on the Perdido platform operated by Shell, oil produced by the offshore oil pipeline system HOOPS to the Perdido platform at Quintana Wharf in southern Texas, and crude oil delivered through Quintana and flowing into the Houston refining center.
The NHC said on Wednesday that Beryl's path and intensity in the western Gulf of Mexico is still uncertain this weekend, and stakeholders in the western Gulf of Mexico, including southern Texas, should monitor Beryl's progress.
The computer model shows that Beryl will travel along the Texas coast in the future to cover 32 refineries in the state. Refineries, on the other hand, are essential for processing crude oil into products such as gasoline and diesel. Mark Schieldrop, a spokesperson for travel club AAA Northeast, told the media that if Beryl directly attacks oil and gas infrastructure, and if local refineries shut down for more than a few days, it could cause oil prices to rise.
Financial blogger Zerohedge wrote an article last month warning that because the Atlantic hurricane season threatens oil refining this year, the La Niña phenomenon will make the Biden administration face a more complicated situation before the US election. The tropical storms of the hurricane season may disrupt the US refining business in the Gulf of Mexico. Only one strong hurricane can damage large US refineries along the Gulf Coast, and may cause the average US gasoline price to rise to a politically sensitive level of 4 US dollars/gallon. Currently, the average gasoline price announced by the American Automobile Association AAA is slightly higher than $3.5 per gallon.
