Above-average 2025 Atlantic Hurricane season raises risks to USGC oil sector

The 2025 Atlantic hurricane season is expected to produce an above-average number of storms, the US National Oceanic and Atmospheric Administration said May 22, raising risks to US Gulf of Mexico oil production and land-based refineries and oil infrastructure.

The USGC is home to roughly 1.8 million b/d of crude production and 10 million b/d of refining capacity.

NOAA forecasters predict the 2025 season will produce 13-19 named storms, the agency said, six to 10 of which are expected to become hurricanes, including three to five major hurricanes.

The NOAA forecast midpoints – 16, 8 and 4 – are slightly less than the midpoints of forecasts from AccuWeather, Colorado State University, North Carolina State University and The Weather Channel, which would collectively average 16.4, 8.4 and 3.6.

NOAA assessed the probability of a more active-than-normal season at 60%, a near-normal season at 30%, and a less active season at 10%.

Ian Palao, vice president for strategic energy services at POWWR, an energy management and software company, said the NOAA forecast "fits well with our forecast of 15 named storms, seven hurricanes, and three major storms."

POWWR also agrees that the El Niño-neutral condition dominates the weather pattern.

"The one risk affecting both the National Hurricane Center outlook and the POWWR outlook is if the elevated West African Monsoon potential, as mentioned by the NHC, actualizes," Palao said in a May 22 email. "That could put both of our predictions on the low side."

Gulf Coast oil infrastructure impacts

An average season typically sees 14.2 named storms, 7.2 hurricanes, and 3.2 major hurricanes.

The NOAA forecast predicts tropical storm and hurricane activity, not how many storms will likely make landfall in the continental US. Six storms made landfall in 2024, and an average of four have hit the US over the long term, according to NOAA records.

The impact of a storm on the US oil industry is heavily dependent on the precise storm track. Of the 10 systems that approached the US Gulf Coast during the 2021-2024 Atlantic hurricane seasons, 60% had significant impacts on Gulf of Mexico crude output and/or landside refining operations, an S&P Global Commodity Insights analysis showed.

For instance, Hurricane Francine in 2024 caused offshore crude production to fall as much as 723,000 b/d and caused refiners to cut net crude runs by 224,000 b/d.

While crude production typically returns quickly after storms pass, the impacts of flooding and power outages can extend refinery outages, boosting USGC refined products crack spreads.

Industry experts have cautioned that the Trump administration's recent cuts to NOAA's weather and climate forecasting capacity will affect the energy sector and states trying to prepare for severe weather.

Acting NOAA Administrator Laura Grimm, speaking at a press conference May 22, dismissed these concerns.

"We are fully staffed at the hurricane center, and we definitely are ready to go," Grimm said, adding: "We are really making this a top priority for this administration, for NOAA, for the Department of Commerce."