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Texas City, Texas – On June 14, 2025, a massive fire erupted at Marathon Petroleum’s Galveston Bay Refinery in Texas City, sending plumes of thick, toxic smoke into the sky and prompting a shelter-in-place order for residents from Highway 146 to Bay Street. The blaze, which broke out just after noon, has raised immediate concerns about its impact on gasoline, diesel, and other refined product supplies, with ripple effects likely to hit consumers across the region and beyond.
The Galveston Bay Refinery, one of the largest in the United States, processes up to 593,000 barrels of crude oil per day, producing gasoline, distillates (including diesel), aromatics, heavy fuel oil, dry gas, fuel-grade coke, and propylene. The facility accounts for roughly 3% of U.S. refining capacity, making it a critical node in the nation’s energy infrastructure. While Marathon Petroleum has not yet released an official statement on the extent of the damage or the duration of the outage, industry analysts are already sounding alarms about potential disruptions to fuel markets.
#BREAKING: Texas City residents ordered to shelter in place as a huge fire breaks out at the Marathon Oil refinery. pic.twitter.com/PHMdk7Lezs
— In2ThinAir (@In2ThinAir) June 14, 2025
Production Offline: Estimating the Losses
Based on the refinery’s capacity and typical output, the fire could take significant volumes of fuel offline. The Galveston Bay Refinery produces approximately:
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Gasoline: 250,000–300,000 barrels per day (bpd), or about 10.5–12.6 million gallons daily, enough to fuel millions of vehicles.
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Diesel: 100,000–150,000 bpd, critical for trucking, shipping, and industrial sectors.
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Other Products: Including jet fuel, heavy fuel oil, and petrochemical feedstocks like propylene, which could see disruptions in supply chains for plastics and chemicals.
If the fire has damaged key units, such as the fluid catalytic cracker (FCC) or ultraformer, as was the case in a 2023 incident at the same facility, production could be curtailed for weeks or even months. A previous fire in May 2023, which involved the ultraformer-3 unit, resulted in temporary shutdowns and contributed to localized fuel price spikes. Assuming a conservative estimate that 50% of the refinery’s capacity is offline for two weeks, this could translate to a loss of:
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Gasoline: 1.75–2.1 million barrels (73.5–88.2 million gallons).
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Diesel: 700,000–1.05 million barrels.
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Other Products: Proportional reductions in jet fuel and petrochemicals, potentially straining aviation and manufacturing sectors.
These figures are preliminary and depend on the extent of the damage, which Marathon has yet to disclose. Past incidents, such as a 2018 substation fire that disrupted operations at Galveston Bay, saw production restored within days, but the scale of the current blaze suggests a more prolonged impact.
Consumer Impacts: Higher Prices and Supply Strains
The timing of the fire couldn’t be worse for consumers. The U.S. Gulf Coast, home to nearly half of the nation’s refining capacity, is already grappling with seasonal maintenance schedules and unplanned outages. A March 2024 report from the U.S. Energy Information Administration noted that Gulf Coast refinery utilization had dropped significantly due to maintenance at facilities like Marathon’s Galveston Bay and Motiva’s Port Arthur refineries, contributing to tighter gasoline and diesel inventories. The Texas City fire is likely to exacerbate these pressures.
Gasoline Prices: With summer driving season in full swing, the loss of gasoline production could push retail prices higher. The Gulf Coast supplies a significant portion of the nation’s gasoline, and disruptions here often lead to price spikes in the Southeast, Midwest, and even the Northeast. Analysts estimate that a prolonged outage could add 10–20 cents per gallon to pump prices in affected regions within days. For context, a similar disruption in 2005 at the same refinery (then owned by BP) contributed to national gasoline price increases due to its 2.5% share of U.S. supply.
Diesel Prices: Diesel consumers, including truckers and farmers, may face even steeper challenges. Diesel inventories are already strained due to global demand and reduced refining capacity in the wake of earlier outages. A loss of 100,000+ bpd of diesel could drive up prices for transportation and goods, potentially increasing costs for everything from groceries to construction materials.
Regional Concerns: Texas and neighboring states are likely to feel the brunt of the impact. The Galveston Bay Refinery feeds pipelines, barges, and tankers that supply fuel across the Gulf Coast and beyond. Local stations in Houston, Dallas, and New Orleans could see shortages or price hikes first, with ripple effects spreading as distributors scramble to source alternative supplies.
Environmental and Community Fallout
The fire’s immediate impact on Texas City residents has been profound. Social media posts on X captured the urgency of the situation, with reports of “thick toxic smoke” and hazmat teams on standby. The shelter-in-place order, lifted later in the day, underscored the risks posed by refinery incidents in densely populated areas. Air quality monitoring is underway, but past fires at the facility have raised concerns about pollutants like sulfur dioxide and benzene, which can cause respiratory issues and long-term health effects.
Dr. Kathleen Garland, an environmental expert quoted in a 2023 report, noted that chemical fires release plumes of fine particulate matter that can drift into residential areas, posing risks to vulnerable populations. Community frustration is palpable, with residents like one quoted on X questioning, “What the hell’s in the air right now?”
Industry and Regulatory Response
Marathon Petroleum has promised a full investigation into the cause of the fire, which remains unknown. The U.S. Occupational Safety and Health Administration (OSHA) is expected to probe the incident, as it did after a fatal 2023 fire at the same refinery that killed worker Scott Higgins. That incident, caused by a leaky pump, highlighted the dangers of deferred maintenance—a recurring issue in the industry.
The fire comes at a time of heightened scrutiny for Marathon, which has faced multiple safety violations and lawsuits in recent years. Critics argue that the industry’s focus on profits over safety, especially during periods of high fuel demand, contributes to such disasters. A 2024 Bloomberg report noted that Marathon delayed repairs at Galveston Bay in 2023 to capitalize on record profits, a decision that led to a deadly explosion.
Looking Ahead
As firefighters work to fully extinguish the blaze and investigators assess the damage, the energy markets are bracing for turbulence. The Galveston Bay Refinery’s role as a linchpin in U.S. fuel production means that even a short-term outage could have outsized effects. Consumers should prepare for potential price increases at the pump and higher costs for goods reliant on diesel-powered transport.
For Texas City residents, the fire is a stark reminder of the risks of living near one of the nation’s largest refineries. As one X user put it, “When Big Oil burns, it’s never just smoke.” The coming weeks will reveal the full scope of the damage—and whether Marathon can restore operations before the impacts ripple too far.
Energy News Beat will continue to monitor this developing story and provide updates as new information emerges.
Note: Production estimates are based on typical refinery yields and may vary depending on the specific units affected. Price impact projections are informed by historical data and current market conditions but are subject to change.
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