The massive ExxonMobil refinery south of Chicago that experienced a near-escape on Monday night due to a tornado may soon see a significant spike in gas prices throughout the Chicago metropolitan area.
According to Channahon Fire Chief John Petrakis, ExxonMobil’s Joliet Refinery in Channahon, Illinois, barely avoided a tornado that slammed just over Interstate 55.
Despite a minor drop in gasoline futures prices nationwide, Andy Lipow, president of Lipow Oil Associates, reported a big spike in Chicago’s gasoline futures on Tuesday of almost 11 cents per gallon. He described this spike as “a significant event” and linked it to the refinery’s power loss.
He stated, “There are three refineries in the Chicagoland area: Citgo in Lemont, Illinois, at 194,000 barrels per day, ExxonMobil Joliet at 275,000, and BP (in Whiting, Indiana) at 440,000 barrels per day.” “There is little to no buffer of excess supply in the area when one of these refineries shuts down.”
Chicago wholesale futures saw an additional 4 cents a gallon of gain in Wednesday’s trading, according to Tom Kloza, the OPIS’s global head of energy analysis. He claimed that despite Hurricane Beryl’s impact on the Houston region, oil prices had been comparatively low across the country this summer. However, this refinery is significant enough to affect local pricing.
The National Weather Service reports that the line of storms that struck the area on Monday night resulted in 11 tornadoes in the greater Chicago area, including the one that hit Channahon. If no additional damage arises from the power loss, it will take a few days to get the Joliet refinery back to normal production, according to Lipow. Questions regarding damage and ExxonMobil’s operational plans have not yet received a response.
Gasoline will need to be transported up from the Gulf Coast by pipeline and take a few weeks to reach the Chicago market if damage prevents production from starting again, according to Lipow.
Lipow stated that he anticipates an almost immediate increase in rates at Chicago stations. According to AAA, the average price for gas in the Chicago area is currently $4.07, but that price was lower by one penny on Tuesday compared to the previous day.