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By: IBISWorld Analysts, Ashley Cruz, Torsten Edstam, Jonathan Bryan and Deonta Smith
The consequences of natural disasters like Hurricane Harvey have far-reaching implications not just for people, but also businesses. Houston is the fourth largest city and fifth largest economy in the United States. This means when 13 trillion gallons of water are dumped on top of it, the economy is sure to struggle.
Hurricane Harvey caused the Colonial Pipeline, which takes 100 million gallons of gas from the Gulf of Mexico to New York every day, to close for days, along with the largest refinery in the United States. Gas prices hit a two-year high. In addition, dozens of container ships were held up in the Gulf of Mexico, waiting for an opportunity to make it into the Port of Houston, the busiest US port in terms of foreign tonnage and second busiest port in terms of overall tonnage. Everything is disrupted, from consumer product inventories to raw material supply chains around the globe.
How might a ship being stuck in the Gulf of Mexico impact a supplier's ability to deliver finished products thousands of miles away from the storm? While we have yet to see the full extent of its impact, Hurricane Harvey is already affecting markets across the economy, whether it be through price shifts, risk along the supply chain or otherwise.