As the 2025 hurricane season approaches, small business owners, especially those in industries reliant on petroleum products, should prepare for potential disruptions. Colorado State University’s hurricane forecast predicts an active season with up to 18 named storms, emphasizing the importance of proactive measures for business continuity.
The implications for small businesses are significant, particularly as the U.S. Gulf Coast, which houses 55% of the nation’s refining capacity, braces for heavier storms. With a pronounced increase in the likelihood of storms impacting this crucial area, businesses need to consider how potential refinery outages could influence their operations.
Historically, hurricanes have proven disruptive to the petroleum industry, leading to closed refineries and supply chain interruptions. The 2021 closure of Phillips 66’s Alliance refinery in Belle Chase, Louisiana, following severe damage is a stark reminder of the potential consequences. For small businesses that depend on these refineries, such disruptions can lead to not only supply shortages but potentially affect pricing and availability of fuel and other petroleum products.
One critical thing to remember is that a storm’s impact often depends on its specific location and intensity. While a severe storm might impede operations in a refinery-rich region, it might not dramatically affect supply in areas without direct refining capacity. On a localized level, however, consumer behavior can exacerbate short-term shortages. As residents prepare for severe weather, panic-buying can lead to spikes in fuel demand or regional price increases.
During previous storms like Hurricane Sandy in 2012, logistical disruptions severely impacted fuel availability far beyond the storm’s immediate impact zone, affecting retail stations and creating widespread, albeit temporary, fuel shortages. Therefore, small business owners need to understand that hurricanes can disrupt not just their local supply chains but also the broader markets tied to the petroleum industry.
The U.S. Energy Information Administration notes that while a single major storm may primarily impact a cluster of refineries along the Gulf Coast, the cumulative capacity that could go offline could reach over 1 million barrels per day in anticipation of a storm. This extensive potential downtime signifies a call to action for small businesses to assess their own supply chains.
For businesses that depend heavily on petroleum or related products, it’s crucial to devise contingency plans. This may involve diversifying suppliers, securing alternative transportation options, or even keeping an emergency reserve cache of essential supplies in case of unexpected shortages. Engaging with local suppliers early can also help mitigate disruptions as they can provide the most accurate, localized information about availability.
Additionally, the upcoming season’s forecast should prompt businesses to discuss resilience strategies amongst their teams. It’s important to establish communication protocols to keep staff informed about possible changes and safe operational guidelines during storm conditions.
Ultimately, the approaching hurricane season serves as an important reminder of the interconnectedness of the energy and business sectors. While there are potential challenges, the proactive measures that small business owners take can help ensure they are well-prepared for any disruptions that may arise. Adapting to these forecasts with strategic foresight can lead to greater resilience in an ever-changing marketplace.
For more insights from the U.S. Energy Information Administration, visit the original post here.
