With Isaias, Nature Renders Policymaker Efforts To Impact Gas Prices Futile

For U.S. drivers, it’s a case of the old adage, “when it rains, it pours.” After one of the quietest hurricane seasons on record, Hurricane Isaias comes along late in the season to disrupt a big swath of production in the Gulf of America and potentially force several Gulf Coast refineries to temporarily suspend operations. 

The net result will be renewed upwards pressure on gasoline and diesel prices at the pump following two weeks of gradual decline from 2026 highs. The U.S. Marine Minerals Administration (MMA) said Thursday that almost a third of the 371 oil production platforms in the Gulf had been shut-in and evacuated as offshore producers invoke measures to protect personnel and infrastructure in the storm’s path. 

Unfortunately for drivers and consumers, Isaias’ path takes it through some of the most productive production areas, and those shut-in platforms make up roughly 63% of total Gulf crude production. MMA estimates that for at least a few days, the storm will take roughly 1.3 million barrels of oil per day — roughly 10% of total domestic production — out of the refining and distribution supply chain. Platforms which pass initial post-storm safety inspections will come quickly back online, but those which sustain damage will be out for longer. 

Less crude supply means less refined gasoline and diesel for the time being, and that in turn means pump prices will reverse the recent decline for a short period of time. It’s just the market at work.

Where refining is concerned, there is good news and bad news. The good news is that Isaias’ path is taking east of the big swath of major refinery operations along the Mississippi River from Baton Rouge through New Orleans that make up a significant portion of the vast Gulf Coast refining sector sited along the Texas and Louisiana coasts. The bad news is that a handful of refining operations do reside in the hurricane’s path.

The following refineries were in or near the projected path of Isaias as of this writing mid-day on Friday:

• Chevron’s Pascagoula, Mississippi refinery (about 356,000 b/d capacity). It sits on the western edge of the cone under a hurricane warning. Chevron said it is monitoring the storm and following established storm-preparedness procedures at onshore sites; no run cut or shutdown has been announced.
• Vertex Energy’s Saraland/Mobile, Alabama plant (about 88,000 b/d). It is described as directly in the projected path. The company had not commented in the latest reports.
• Hunt Refining’s Tuscaloosa, Alabama refinery (about 50,000 b/d). It is farther inland under a tropical storm watch and in the broader forecast path. Hunt had also not commented as of this writing. 

For U.S. drivers, the optimal result would be for these facilities to be able to maintain operations despite the storm. Of those three, Chevron’s Pascagoula operation seems the least threatened since it lies slightly to the east of the storm’s projected path. Its’ big capacity ranks it as the nation’s 11th largest, and the fact that it produces gasoline, jet fuel and diesel at scale make it the biggest supply and price risk by far of the three plants.

While crude oil prices eased somewhat in Thursday and Friday trading, U.S. wholesale diesel and gasoline prices moved in the opposite trajectory as Isaias approached landfall. November diesel futures (ULSD) settled at $4.8829 Thursday, up about 26 cents, while gasoline futures (RBOB) rose about 8 cents to $3.3160. Those wholesale increases will quickly make their way into retail pump prices, if only for a short time.

“This could not have come at a worse time as gasoline and diesel inventories are quite low,” Andy Lipow, president of Lipow Oil Associates LLC consultancy, wrote in a note Wednesday, as reported by NBC News. Lipow certainly isn’t wrong about that.