We’re in the teeth of Atlantic hurricane season. One well-placed landfall can jolt U.S. LNG exports and gasoline crack spreads—rippling quickly into Europe’s gas and refined-product markets. NOAA’s updated outlook still calls for an above-normal season, with 13–18 named storms, 5–9 hurricanes, and 2–5 major storms expected between now and November 30. Translation: the odds of at least one high-impact Gulf event are non-trivial. (cpc.ncep.noaa.gov)
How concentrated are U.S. LNG and refining assets on the Gulf?
Refining: Just over half of all U.S. refining capacity sits on the Gulf Coast (PADD 3), centered around Houston/Galveston Bay and the lower Mississippi River. That concentration means any prolonged outage in Texas or Louisiana tends to reverberate nationwide via product pipelines and export flows. (U.S. Energy Information Administration)
LNG export terminals: The lion’s share of U.S. LNG export capacity is in Texas and Louisiana (Sabine Pass, Cameron, Calcasieu Pass, Freeport, Corpus Christi; with Golden Pass ramping). The EIA notes more than 12 Bcf/d of U.S. LNG capacity is located on the Gulf Coast, making it directly vulnerable to storm-related port closures and power disruptions. The U.S. exported 11.9 Bcf/d of LNG in 2024—#1 globally—so even a short Gulf interruption can tighten balances for Europe and Asia. (U.S. Energy Information Administration) (U.S. Energy Information Administration)
What history tells us: prices move—fast
Refined products: When Hurricane Harvey swamped Texas refineries in 2017, weekly Gulf Coast refinery runs fell 34%, and U.S. average retail gasoline rose 28¢/gal in a week; European gasoline margins jumped to nearly $20/bbl as cargoes were rerouted to fill U.S. gaps. That’s how quickly Gulf outages transmit through the Atlantic basin. (U.S. Energy Information Administration) (Reuters)
Modelled impact: EIA’s hurricane stress test (a “High Impact” case) assumes 15% of Gulf Coast refining capacity offline for a month (≈8% U.S. total). The result: U.S. retail gasoline +18–27¢/gal in September versus baseline, with heavier inventory draws and higher net imports. That’s without assuming multiple storms. (U.S. Energy Information Administration)
LNG and Henry Hub: Storms deliver a two-way shock to U.S. gas prices. If they curtail LNG exports, domestic supply backs up and Henry Hub can fall (as traders saw with a Louisiana landfall threat in 2024). If storms knock out offshore production or onshore processing, Hub can spike (as with Ida-era disruptions). In other words, direction depends on which link of the chain breaks. (Reuters) (Reuters)
Direct LNG precedent: Hurricane Laura (2020) forced temporary shutdowns at Cameron LNG and Sabine Pass, delaying cargoes and highlighting that even hardened facilities are constrained by port access, power, and channel conditions. (Reuters)
Why Europe cares (a lot)
Europe’s gas system has become structurally linked to U.S. LNG since 2022. In Q1 2025, the U.S. supplied ~50.7% of EU LNG; the European Commission pegs the U.S. share at ~45% in 2024. A Gulf outage that delays even a handful of cargoes can widen TTF–JKM spreads and force Europe to bid up for alternate supply. Correlations between TTF and JKM have re-tightened toward ~0.9–0.95 since 2024—another sign that shocks in one basin transmit quickly. (European Commission) (Energy) (Global LNG Hub | LNG market analysis)
On the oil products side, Europe’s gasoline and diesel cracks can surge when U.S. Gulf refining stumbles, as seen during Harvey when European gasoline margins popped to a two-year high. U.K. refiners (Fawley, Pembroke, Stanlow) can see margin uplift when trans-Atlantic arbitrage swings in their favor; however, feedstock and logistics snags can blunt the upside. (Reuters)
Scenario map: What if a Category-4 makes Gulf landfall?
Below is a simplified decision map for a late-August Category-4 making landfall between Galveston Bay and southwest Louisiana. These are illustrative, not predictive, and assume typical precautionary shut-downs and post-storm assessments.
| Scenario | LNG exports | Henry Hub (near-term) | Refining/gasoline | European spillover |
|---|---|---|---|---|
| Direct hit on LNG corridor (Port Arthur–Cameron) | Multiple terminals pause loadings; channel closures delay departures/arrivals | Down bias if export outage dominates (feedgas backs up); Up risk if onshore processing also hit | Minimal refinery impact if Western Gulf takes brunt; gasoline moves modestly unless refineries shut | Fewer U.S. cargoes → TTF premium widens vs. JKM if Atlantic-basin buyers outbid Asia for replacement cargoes |
| Direct hit on refining corridor (Houston/Beaumont/LA River) | LNG mostly OK unless power/port outages spread east | Mixed; Up bias if gas processing/power impacted | Gulf Coast runs −10–30% for days/weeks; RBOB cracks spike; retail gasoline +$0.20–0.30/gal month-avg per EIA stress test | European gasoline margins lift; diesel/gasoil can follow if hydrotreaters/CRUs are down and exports fall |
| Glancing blow (offshore detour; ports precautionary halt) | Brief loadings pause; quick resumption | Small, noisy moves | Short interruptions; inventories cushion; price impact fades in days | Limited market effect; spreads normalize fast |
| Multi-storm season (repeat hits Sep–Oct) | Staggered LNG delays aggregate | Direction whipsaws with export vs. production outages | Inventory depletion plus scheduled maintenance magnify impacts; cracks stay elevated | Sustained premium for Atlantic-basin supply; higher TTF volatility |
Why these outcomes? EIA’s hurricane analysis explicitly ties gasoline price jumps to the scale/duration of refinery outages, while LNG reactions hinge on export versus production effects (export outages are bearish Hub; production outages bullish). Europe’s exposure is magnified because U.S. LNG is its dominant swing supply and refined-product flows arbitrage quickly. (U.S. Energy Information Administration) (European Commission)
Who’s most exposed?
- EU gas utilities & power generators: With the U.S. supplying ~45–51% of EU LNG, delays in U.S. cargoes can tighten prompt TTF, especially when Norwegian maintenance or Asian heatwaves compete for supply. Keep an eye on TTF–JKM and freight spreads. (Energy, European Commission)
- U.K. and Northwest European refiners: Historically see crack uplift when Gulf outages constrain U.S. exports and raise Atlantic gasoline values. 2017 is the template: European gasoline margins jumped near $20/bbl. (Reuters)
- U.S. Gulf Coast marketers and shippers: Colonial and other pipelines often throttle flows during outages; rerouting adds cost and delay, amplifying basis dislocations. (U.S. Energy Information Administration)
What to watch in real time
- Storm track & intensity (NOAA/NHC): The live cone and rapid-intensification guidance will tell you which corridor is at risk 2–4 days out. NOAA just reaffirmed an above-normal season in its August update. (cpc.ncep.noaa.gov)
- EIA weekly data:
- Refinery utilization and product stocks by PADD (watch PADD 3 runs and gasoline inventories).
- Natural gas storage and LNG feedgas (via weekly gas updates) for clues on export disruptions. (U.S. Energy Information Administration)
- Ship-tracking (Kpler/Vortexa):
- LNG line-ups at Sabine Pass, Cameron, Freeport, Corpus Christi;
- Product tankers out of Houston, Beaumont/Port Arthur, and New Orleans;
- Deviation signals (waiting at anchor, AIS speed = 0 off jetties). Recent Kpler analyses also quantify how much U.S. LNG Europe is absorbing in 2025. (Reuters)
- Outage notices and restart timelines: Company statements plus port authority updates (channel re-openings often gate LNG more than plant damage itself). Laura-era shutdowns/restarts at Cameron and Sabine Pass are the precedent. (Reuters)
- Crack spreads & basis:
- RBOB cracks and Gulf Coast basis to NYMEX—Harvey showed how fast they can move;
- European gasoline margins for spillover when Atlantic arbitrage lights up. (U.S. Energy Information Administration, Reuters)
Stress-testing the numbers: what a Category-4 could imply
If a late-August, large-footprint storm directly hits the Houston–Beaumont corridor and forces precautionary shut-downs, EIA’s stress case is a solid baseline: ~15% of Gulf Coast capacity offline for a month translates to 620 kb/d less gasoline output in September and ~$0.18–0.27/gal higher average U.S. retail prices, fading by November as stocks rebuild. That’s before any compounding from simultaneous crude export bottlenecks at Corpus Christi or Houston. (U.S. Energy Information Administration)
For LNG, a direct hit on the Sabine–Cameron–Calcasieu corridor would likely pause sailings and line-ups even if the plants avoid major damage—channel clearance and power restoration are often the binding constraints. In 2024, traders marked Henry Hub down ~5% on the prospect of reduced LNG demand from a Louisiana storm risk; in 2021, Ida-era production hits supported prices. Expect volatile, path-dependent moves. (Reuters)
The European angle: gas and gasoline
- Gas: With U.S. cargoes comprising roughly half of EU LNG in early 2025, any week-long slip in Gulf exports risks tightening TTF unless Norway, Qatar, or West Africa fill the gap. Recent market structure shows TTF often maintains a premium to keep Atlantic cargoes home when risks flare. (European Commission, Kpler)
- Gasoline: If U.S. Gulf gasoline exports falter, Europe’s benchmark margins can spike as local barrels backfill trans-Atlantic demand or as traders re-optimize blending components. That’s the Harvey playbook—and it remains relevant. (Reuters)
Bottom line
A Category-4 Gulf landfall is a classic “small hinges swing big doors” risk for energy markets. The LNG side hinges on whether exports (bearish Hub) or production (bullish Hub) get hit harder; the refining side more mechanically lifts gasoline cracks and retail prices if outages persist beyond a few days. With NOAA still flagging an above-normal season and Europe’s reliance on U.S. LNG intact, the trans-Atlantic feedback loop is primed: one Gulf storm can reshape both Henry Hub and TTF, and light up gasoline cracks from Houston to Rotterdam. (cpc.ncep.noaa.gov, European Commission)
Sources worth bookmarking for live tracking & maps:
- NOAA/NHC outlooks and cones. (cpc.ncep.noaa.gov)
- EIA refinery capacity reports, weekly petroleum & gas updates, and hurricane impact notes. (U.S. Energy Information Administration)
- Flow intel from Kpler (and Vortexa): Europe’s share of U.S. LNG and changing line-ups. (Reuters)
Disclosure: The information above is for educational purposes only and does not constitute investment or trading advice. Markets move quickly during extreme weather, and all facts and figures should be independently verified using primary sources (e.g., NOAA, EIA, port authorities). Past performance is not indicative of future results. Consider consulting a licensed professional before making financial decisions.