Storm Alert – Code Red – 9.8.21

Refineries are experiencing varying degrees of success in restarting operations. Five refineries in New Orleans, which cumulatively account for just over 1 million barrels per day, have not yet been able to begin their restart process due to power outages. Elsewhere, refinery repairs and restarts are underway, with refineries generally operating at reduced capacity. Refineries not impacted by the outage are reportedly postponing September repair plans to prevent further supply issues.

Refineries don’t typically take this long to recover from a hurricane, but Hurricane Ida was no ordinary storm. The hurricane knocked out nearly 31,000 electric poles, exceeding the combined impacts of hurricanes Katrina, Ike, Delta, and Zeta. The economic devastation is reportedly $95 billion, the seventh-highest cost storm in the past 20 years.  Wood MacKenzie reported last week that Ida-related refinery outages would outlast previous shutdowns, extending for weeks. Commerzbank notes that 16 MMbbls of oil were taken offline in the 10 days following Ida, more than any storm has ever taken offline.

Mansfield remains on Code Red in Louisiana and Mississippi given on-going supply concerns, though Baton Rouge refineries restarting operations will eventually make for positive development. In both states, customers are asked to order fuel at least 72 hours in advance. Mansfield has removed the Code Orange alert for Alabama, though continued notice of 48-hours for new orders is requested when possible.