‘Zero tolerance for disruptions.’ Hurricane Isaias could mess with America’s refining nerve center

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—– is driving the US market Something isn’t loading properly. Please check back later. Business Economy 4 min read ‘Zero tolerance for disruptions.’ Hurricane Isaias could mess with America’s refining nerve center By Matt Egan Updated Oct 9, 2026, 1:06 PM ET Published Oct 9, 2026, 1:06 PM ET PUBLISHED Oct 9, 2026, 1:06 PM ET A car drives along a road in Pensacola Beach, Florida, on October 9, 2026, as Hurricane Isaias moves north toward the Florida Panhandle. The first hurricane of the Atlantic season, Isaias is forecast to make landfall in Florida, Alabama or Mississippi overnight Friday to Saturday, according to the National Hurricane Center. Ronaldo Schemidt/AFP/Getty Images Hurricanes Storms See all topics Facebook Tweet Email Link Threads Link Copied! Follow New York —  Hurricane Isaias is barreling down on the US Gulf Coast at a time when there’s almost no margin for error in the global energy system.

The biggest risk is that extreme flooding, wind or power outages from the Category 3 storm disrupts, damages or even destroys refineries.

The world is already relying on US refineries to process as much oil as possible to make up for a fuel supply crunch caused by war in the Middle East and Russia.

Analysts warn that even a small disruption could cause a big price hike in gas, diesel and jet fuel.

“There is zero tolerance for any disruptions right now,” said Tom Kloza, chief energy adviser at Gulf Oil. “If we lose a refinery — even just for a few weeks — it can manifest itself in very high prices very quickly.”

Beyond the danger to vital refineries, the storm has temporarily knocked offline almost two-thirds of the oil production in the Gulf of Mexico. And there is a risk that Hurricane Isaias delays crucial fuel deliveries to Florida.

Workers cordon off a gas pump with yellow tape at a gas station in Navarre, Florida, on October 9, 2026, as Hurricane Isaias moves north toward the Florida Panhandle. Hurricane Isaias intensified to Category 2 in the Gulf of Mexico’s warm waters on Thursday as it churned toward the southern United States, the NHC said. Ronaldo Schemidt/AFP/Getty Images The good news, relatively speaking, is that the path of the storm has veered far enough to the east that it could spare most, though not all, Gulf Coast refiners. Refineries in Louisiana are expected to avoid the worst of the storm.

Given the current path of the storm, Lipow said he’s “less concerned” about the risk to the overall system than a few days ago.

Still, Lipow says two major refineries are at significant risk from the storm: the Chevron facility in Pascagoula, Mississippi, and the Vertex facility in Mobile, Alabama.

Together, they process a combined 466,000 barrels per day, representing about 2.4% of the nation’s refining capacity, according to Lipow.

“Hurricane Isaias is a fuel supply event hitting a system already stretched by the Iran war,” analysts at Jefferies said in a report. “A small disruption now has outsized price consequences.”

The big question is whether extreme flooding or power outages in the region force the Chevron and Vertex refineries to shut down for a significant amount of time.

A view of a Chevron refinery in Pascagoula, Mississippi, on April 20, 2020. Dan Anderson/EPA-EFE/Shutterstock Lipow notes that it can take up to two weeks to fully restart refineries even if they avoid damage.

“Severe flooding can put a refinery out of commission for months,” Lipow said.

Hurricane Ida in 2021 caused significant damage to refineries, forcing multiple shutdowns. That Category 4 storm unleashed such extreme flooding that Phillips 66 eventually pulled the plug on its Alliance Refinery in Belle Chasse, Louisiana. Repairs were so costly that the company opted to convert the facility to a terminal.

Kloza, the Gulf Oil executive, said he suspects both the Chevron and Vertex refineries will avoid catastrophic damage.

“I don’t think the hurricane is going to knock out these two refineries. But you do have to worry about the utilities. If you don’t have power, you can’t operate. That’s the biggest threat,” Kloza said.

Last month, an ExxonMobil refinery in Joliet, Illinois, experienced power problems that forced the facility to go offline. Gasoline and diesel prices skyrocketed, underscoring the low margin for error in the system.

If any refinery shuts down from the hurricane, it will force suppliers to withdraw more fuel from already-thin stockpiles, which act as shock absorbers during crises.

Commercial inventories of both gasoline and diesel are historically low for this time of year because of the fuel supply crunch caused by overseas outages in China, the Middle East and Russia.

Stockpiles of diesel, the workhorse fuel that powers the modern economy, are at the lowest seasonal level since federal data started in 1982.

Hurricane Isaias has already disrupted oil production in the Gulf of Mexico.

As of midday on Friday, oil companies shut in about 72% of the daily Gulf of Mexico oil production as a precaution.

Assuming there is no damage, those facilities should be able to resume production in short order.

Another potential issue is getting gasoline and fuel to Florida, a state that is reliant on shipments from Gulf Coast refineries because it lacks any major refineries of its own.

Lipow said there will likely be some “slight” delays getting fuel to Florida because tankers must wait for the storm to pass before crossing the Gulf of Mexico.