Chicago Gas Prices Might Surge After Tornado Almost Hits Refinery

A tornado’s near-escape of a major ExxonMobil refinery outside Chicago on Monday night, resulting in a power outage, could soon lead to a major increase in gas prices across the Chicago metropolitan area.

ExxonMobil’s Joliet Refinery, based in Channahon, Illinois, narrowly escaped a tornado that struck just across Interstate 55, according to Channahon Fire Chief John Petrakis.

Andy Lipow, president of Lipow Oil Associates, reported a significant increase of approximately 11 cents per gallon in Chicago’s gasoline futures on Tuesday, despite a slight decrease in gasoline futures prices nationwide. He attributed this surge to the power outage at the refinery, calling it “a significant event.”

Tom Kloza, global head of energy analysis at OPIS, highlighted a further rise of 4 cents per gallon in Chicago’s wholesale gasoline futures on Wednesday. He explained that, despite the generally weak oil prices across the country this summer, and taking into consideration Hurricane Beryl’s impact on Houston not boosting prices, the significance of this refinery is substantial enough to influence prices locally.

According to the National Weather Service, the Monday night storm system created 11 tornadoes across the greater Chicago region, including one that struck near Channahon. Lipow mentioned that it would take some days to restore normal operations at the Joliet refinery, provided the only issue is the power outage. ExxonMobil has not yet commented on the extent of the damage or its plans for resuming business as usual.

Lipow indicated that if production is stalled due to damage, gasoline would be required to be transported from the Gulf Coast to Chicago via pipeline, a process that would take a couple of weeks.

Lipow anticipates that prices at Chicago gas stations will begin to shoot up almost instantly. Currently, AAA reports that the average price in the Chicago area stands at $4.07 per gallon. However, based on Tuesday’s figures, this average price had dropped by 1 cent from the day before.