Valero has shut down its Port Arthur refinery after an explosion late on Monday set a diesel processing unit on fire, Reuters has reported, citing unnamed sources.
Other reports say that emergency services have been sent to the site, and a shelter-in-place order has been issued for the western parts of Port Arthur. Al Jazeera said police sources had told local media that the cause of the fire was an industrial heater.
Valero’s Port Arthur refinery is one of the largest in the United States, with a daily capacity of 380,000 barrels. Its diesel hydrotreater, where the explosion occurred, has a daily capacity of 47,000 barrels.
The accident comes at a time of rising fuel prices amid the international oil price rally prompted by tanker traffic disruption in the Strait of Hormuz. As of Monday, the national average for gasoline stood at $3.956 per gallon, according to AAA, with the diesel average at $5.285 per gallon. These figures compare with $3.126 per gallon of gasoline a year ago and $3.597 per gallon of diesel in late March 2025.
A high diesel price is especially concerning as planting season begins for farmers across the northern hemisphere. Higher diesel prices eventually drive up the price of everything, most notably food. This time, the effect on food prices would be aggravated by fertilizer prices, which have also been affected by the Middle East war since the region is a major producer of fertilizers and fertilizer feedstocks.
With the oil flow disruption driving prices higher, there has been talk in political circles in the U.S. about a possible cap on exports of crude oil from the world’s largest producer, but the Trump administration has ruled that out. “Oil and gas export restrictions are not under consideration,” one administration official told the Financial Times last week.
By Irina Slav for Oilprice.com
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