Although hurricanes typically push oil and gas prices higher by disrupting oil production in the Gulf of Mexico, Hurricane Ian is not expected to have a big impact, analysts say. That’s mainly because the storm’s path has largely avoided key oil-producing states such as Texas and Louisiana, ABC News reported.
Unlike some of its neighbors, Florida is not a big oil producer. The state only accounts for roughly 6,000 barrels of oil production each day, according to Andy Lipow, president of Lipow Oil Associates. That barely makes a dent in the roughly 11.8 million barrels a day produced overall in the United States, the U.S. Energy Information Administration recently reported.
“I don’t think [Hurricane Ian] will have any impact at all,” Lipow told ABC News.
Gas prices in the U.S. have ticked higher recently after three months of declines, though that doesn’t seem to be tied directly to hurricane season. The national average was $3.782 a gallon as of Sept. 29, 2022, according to AAA. That’s up from $3.765 the previous day and $3.684 a week ago.
The average gas price in Florida stood at $3.394 a gallon as of Sept. 29 — well below the national average and up only slightly from $3.381 a week ago.
In a Sept. 26 report, AAA said the main reason for the recent uptrend is higher regional prices on the West Coast and the Midwest due to refinery issues, including a fire and planned maintenance projects. But the impact has been blunted by lower domestic demand following the summer travel season ending as well as a recent dip in oil prices.
As GOBankingRates previously reported, oil prices sank about 5% to an eight-month low on Sept. 23 amid fears that rising interest rates will lead to a global recession.
AAA spokesperson Andrew Gross did say Hurricane Ian “could cause problems, depending on the storm’s track, by disrupting oil production in the Gulf of Mexico and impacting large coastal refineries.” However, those comments were made before Ian made landfall and its trajectory moved away from production in the gulf.
So far, Hurricane Ian has only caused temporary disruption in the region, ABC News noted — including precautionary measures BP and Chevron took earlier in the week to cut production and evacuate personnel at offshore oil platforms. A day later, BP began returning personnel to its platforms.
“Once they get the people out there, it’s back to production within a day,” Lipow said.
Meanwhile, President Joe Biden has sent a warning to gas companies to not jack up prices because of the storm.
“Do not, let me repeat, do not use this as an excuse to raise gasoline prices or gouge the American people,” Biden said at an event in Washington, D.C., on Wednesday.
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