Valero Energy is set to restart later this week its major oil refinery in Port Arthur, Texas, after an explosion and a fire forced a shutdown earlier this week, sources with knowledge of the refinery’s operations told Reuters on Wednesday.
Valero on Tuesday shut down its Port Arthur refinery after an explosion late on Monday set a diesel processing unit on fire.
The refinery capable of processing 380,000 barrels per day (bpd) of crude is one of the largest in the United States and the U.S. Gulf Coast.
The refinery’s diesel hydrotreater, where the explosion occurred, has a capacity of 47,000 barrels per day.
All personnel were accounted for after the explosion early this week, with no injuries reported. However, authorities issued a shelter-in-place order immediately following the blast, which was felt as far as 11 miles from the refinery on the Texas border with Louisiana.
The shutdown at the major refinery will tighten the diesel market in the United States at a time when diesel – and gasoline – prices are soaring in lockstep with the surge in crude oil prices.
Refining margins are also soaring globally due to the supply shock in the Middle East.
The U.S. national average price of a gallon of regular gasoline was $3.983 as of early Wednesday, per AAA data. This price compares to $2.975 per gallon a month ago, just before the start of the war in the Middle East, and to $3.139 a gallon a year ago.
The price of diesel has climbed even faster and a gallon costs an average of $5.366 nationwide, according to AAA data, up from $3.749/gal a month ago and $3.749/gal a year ago.
The average price of diesel in the U.S. has reached $5.35/gal and is less than 50 cents from setting a new all-time record high, which was at $5.83/gal on June 1, 2022, Patrick De Haan, head of Petroleum Analysis at GasBuddy, said on Tuesday.
