Will Gas Prices Surge After Oklahoma Refinery Accident?

A fire broke out in a Wynnewood refinery this morning. People reported hearing multiple explosions, two were injured, and it has travelers wondering how it will affect gas prices at the pump ahead of Memorial Day Weekend.

@news9kwtv Two people were injured after a fire broke out Tuesday morning at an oil refinery in Wynnewood. #oklahoma #news #breakingnews #fire #refinery #wynnewood #oklahomasown #news9 ♬ original sound - news9kwtv

While it's easy to cast this event off as just an accident at one Oklahoma refinery, 2023 has not been a good year for refineries around the country. Like celebrity deaths, these accidents are coming in sets of twos and threes.

Just this month, major fires have also broken out at refineries along the Gulf Coast. From Corpus Christy to Houston, Shell has been putting out fires for weeks now.

If history tells us anything, anytime a refinery incurs an accident that affects output, prices surge around the country due to supply and demand. Even worse, as American refineries continue to age, this exact issue is occurring a lot more often.  It is once again leading people to ask a very common question.

"Why aren't we building new refineries?"

There is no simple answer. While people tend to focus on political strains and the EPA's role in defining acceptable operations for new refining facilities, truth be told it's far more expensive to build new rather than update or rebuild aging refineries.

People tend to focus on the record profits the oil and gas industry has seen in the last few years, but with any boom comes an eventual bust. That is just the nature of that particular business.

Every time I have this conversation, someone around the table rolls their eyes suggesting that Shell, Conoco, and Exxon print their own money, but it's not like that at all. They're just capitalizing on whatever is allowed right now and socking that money away to pay shareholders dividends when things do turn downward.

Can you really blame them?

Like any commodity, fuel is a necessary thing for the majority of Americans. While it's a bummer that politics play a major role, prices ebb and flow as time goes on. That explains President Trump's 20-year low and President Biden's all-time high gas prices.

If you were to run a business and the president made it a talking point to put you out of business, would you seek to invest more into your business? Left or right, blue or red aside, I don't think anyone would double down in the face of such one-sided adversity.

Will prices rise?

Probably... but they'll also eventually fall like they always do. Could be next week, could be November, 2024, we won't know until the day comes.