Freezing temperatures in the U.S. are threatening the country's oil refining industry. Several oil refineries have been shut this week.
Some of the largest refineries closed after they were deprived of electricity and fuel. According to Energy Aspects, more than 3 million barrels per day of capacity was idle Tuesday because of the record-setting cold.
The reduction in capacity is expected to further elevate prices for oil-based products such as propane and gasoline in the coming weeks. The Gulf Coast supplies more than 50% of the East Coast's fuel demands.
Analysts said if production disruptions continue the effect might spread beyond the Gulf Coast. The disruptions are expected to worsen already low output as a result of the coronavirus pandemic.
"Disruptions to refining operations could be prolonged if the cold damages any equipment or if the power outages affecting Texas are not resolved quickly," analysts said.
Temperatures in Texas hit a low of 3 Fahrenheit (minus 16 Celsius) Tuesday. State power grid officials said they will be forced to impose rolling blackouts throughout the week. The cold has caused an unprecedented increase in power and heat demand which is expected to reach a record this week.
Saudi Arabian Oil Co.'s Motiva Enterprises said it will temporarily shut its operations in Port Arthur, Texas - the country's largest refinery. Marathon Petroleum said it will shut its Galveston Bay plant in Houston.
Exxon Mobil Corp. has shut its large Baytown refinery and several other processing plants in Texas. Apart from the cold, Exxon said that it was forced to close down plants in Beaumont because of a shortage of natural gas.
The extreme cold has paralyzed wind farms and electricity generators across the nation, too.
