Hurricane Harvey has caused nearly 100 oil and gas production platforms in the Gulf of Mexico to temporarily shut down.
Since the storm came ashore last Friday, oil production in the region has dropped by more than 300,000 barrels per day according to data from the Bureau of Safety and Environmental Enforcement.
But that drop in production doesn’t necessarily translate to a higher demand for Alaska’s oil.
Dan Stickel, the chief economist for Alaska’s Department of Revenue, said the global oil market is oversupplied.
“There’s a lot of ability for the market to absorb a temporary shut-in of some production here or there,” he said.
Additionally, Alaska’s oil does not compete with Gulf Coast oil. They’re essentially in two different markets, Stickel said.
As long as production isn’t stalled long-term from the hurricane, it’s not likely that oil prices are going to jump up significantly, he said.
Alaskans aren’t likely to see an increase in the price of gasoline at the pump either. Goldman Sachs estimates that the hurricane and subsequent tropical storm has taken about 3 million barrels a day of the nation’s refining capacity offline.
However, Stickel said that Alaska gets most of its gas from West Coast refineries.
If Gulf Coast refineries stay offline for an extended period of time, gas prices in Alaska could be impacted.
When Hurricane Katrina hit New Orleans in 2005, prices at the pump spiked all over the state.
“We’re not really expecting that type of impact from this particular hurricane,” he said.
That storm left crucial oil pipelines and refineries in the Gulf Coast region unable to operate for weeks.