Market Speaks: US hurricane season will likely exceed last three-decade average, heightened risk seen for production outages in crude oil industry
The US Energy Information Administration or EIA stated yesterday that Colorado State University’s hurricane forecast estimates the 2025 hurricane season will exceed the 1991–2020 average, with an estimate of 17 named storms, compared with a historical average of 14 storms. Meteorologists expect 13–18 named storms, including 3–6 storms with direct impacts on the United States, during this year’s Atlantic hurricane season. The potential for a stronger hurricane season suggests heightened risk for weather-related production outages in the US oil industry, including potential refinery outages along the US Gulf Coast. Last year, five hurricanes made landfall in the United States, shutting in some upstream crude oil and natural gas production temporarily and disrupting petroleum product supply chains in Florida.
The National Oceanic and Atmospheric Administration’s (NOAA) National Hurricane Center defines the Atlantic hurricane season as running from June 1 through November 30. Generally, June is the month when the earliest named storms begin forming in the Atlantic Basin, and the most severe hurricanes usually form in August and early September. In the United States, hurricanes most often hit the Southeast (PADD 1C) and the US Gulf Coast (PADD 3). The US Gulf Coast accounts for 55% of total US refining capacity, with the Texas Gulf Coast and Louisiana Gulf Coast refining regions combined accounting for 49% of total US refinery capacity.
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