HOUSTON: A number of key Texas refineries worked to reopen or resume normal operations on Saturday, a week after Hurricane Harvey knocked out nearly one quarter of the US refining capacity and sent gasoline prices to two-year highs.
While much of the region’s refining infrastructure still remained offline from Harvey, which made landfall as a Category 4 hurricane last week and drenched Texas as a tropical storm, the restarts were a first step in alleviating concerns about US fuel supplies.
Exxon Mobil said it was restarting its 560,500 barrel per day (bpd) facility in Baytown, Texas, the second-biggest US oil refinery, after it was inundated by flooding.
Phillips 66 said it was working to resume operations at its 247,000 bpd Sweeny refinery as well as its Beaumont terminal.
The announcements come after Valero Energy said late on Friday it was ramping up production at its Corpus Christi, Texas-area refineries, as well as evaluating its 335,000 bpd Port Arthur, Texas, refinery for damage from Harvey. The refinery was shut on Wednesday.
Retail gasoline prices have risen more than 17.5 cents since August 23, before Harvey hit, amid worries the storm would trigger supply shortages.
Pump prices were at $2.59 a gallon on Saturday, according to motorists advocacy group AAA, up 3 percent from Friday and 16.7 percent higher on average than a year ago.
In another positive sign for the industry, Occidental Petroleum said it had loaded and shipped the first crude cargo from its Ingleside terminal in Corpus Christi after Hurricane Harvey first made landfall.
The Port of Corpus Christi, a major energy industry shipping hub, was partially open and hoped to resume normal operations next week, officials said.
But much energy infrastructure remained offline, including the largest US refinery, the 603,000 bpd facility in Port Arthur, Texas, owned by Motiva Enterprises. Motiva has told customers to prepare for fuel shortages, said a source at convenience store and gas station chain Circle K.
In some Texas cities, including Dallas, there were long lines at gas stations on Friday.
At a QMart filling station west of Houston on Saturday, cars were clogging the pumps soon after a tanker arrived to replenish its pumps.
“We had a half a tank, but decided to get more, just in case,” said Maria Linares, a school teacher whose husband was topping their car’s tank.
The Phillips 66 brand station has not raised its fuel prices since before Harvey, said Assistant Manager Jalal Sadruddin, by policy of the station owner, Q-Mart.
“Right now, we have about 4,000 gallons, maybe two or three days’ worth,” he said. The station received a tanker load of gasoline on Saturday but was out of diesel, he said. An Exxon brand station across the street was out of fuel.
“In all this area, no one has it but us,” Sadruddin said.
Nearly half of US refining capacity is in the Gulf Coast region, an area with proximity to plentiful supplies from Texas oil fields to Mexican and Venezuelan oil imports. The majority of Texas ports remained closed to large vessels, limiting discharge of imported crude.
Texas refineries begin restart after hit from Hurricane Harvey
Texas refineries begin restart after hit from Hurricane Harvey
Fitch maintains neutral outlook on GCC corporates
RIYADH: Gulf Cooperation Council corporates are expected to see largely stable conditions in 2026 as government-led investment supports earnings, offsetting pressure from lower oil prices and tighter funding conditions, according to a new analysis.
In a report published this week, Fitch Ratings said sustained public-sector capital expenditure — particularly in infrastructure and energy — will continue to underpin regional corporate performance, even as lower oil-price assumptions are likely to constrain public- and private-sector budgets.
This comes as GCC economies are forecast to grow 4.4 percent in 2026 and 4.6 percent in 2027, driven by stronger non-hydrocarbon activity and rising hydrocarbon output, the World Bank said.
In its Global Economic Prospects report released earlier this month, the World Bank said non-oil sectors, which account for more than 60 percent of GCC GDP, are expected to be supported by large-scale investment across the region.
Samer Haydar, Fitch’s head of GCC corporates, said: “We expect sustained public-sector capex to support steady earnings for GCC Corporates in 2026, especially in infrastructure and energy, even as lower oil price assumptions constrain fiscal flexibility.”
He added: “Sub-investment-grade credits will face low leverage headroom and increased interest-rate sensitivities.”
Fitch expects non-energy sectors to keep benefiting from state-backed investment programs — especially in Saudi Arabia and the UAE — while projecting GCC non-oil GDP growth of 3.7 percent in 2026, a moderation from 4.2 percent previously.
The agency also said regulatory reforms tied to diversification are supporting initial public offering activity, with a “robust” pipeline into 2026 supported by policy measures and deep local markets.
Credit profiles remain largely stable, with Fitch noting that about 95 percent of rated GCC issuers carry Stable Outlooks, and eight upgrades were recorded during 2025, partly linked to sovereign rating actions.
Ratings across Fitch’s GCC corporate universe span from “AA” to “B”, with government-related entities tending to be larger; Fitch said GREs represented about half of its rated GCC corporates in 2025.
On balance-sheet metrics, Fitch expects leverage to be modestly higher in 2026, with average leverage at 2.4 times before easing to 2.3x in 2027.
While strong 2025 earnings provided headroom for sectors including oil and gas, real estate, utilities and telecoms, the agency said industrials, retail and homebuilders typically operate with tighter leverage capacity, leaving less cushion amid still-elevated input and operating costs.
Funding conditions are expected to remain a key differentiator, Fitch said, adding that GCC issuers pushed their “maturity wall” out to 2028, helped by 2025 bond and sukuk issuance — particularly from UAE and Saudi Arabia-based issuers refinancing maturities early.
The agency estimates aggregate corporate fixed-income maturities for UAE and Saudi Arabia-based entities at about $50 billion over the next five years, and said persistently higher funding costs are likely to weigh more on high-yield issuers with sizable near-term maturities than on investment-grade peers.
Fitch also flagged rising capex as a near-term cash-flow constraint. It expects capex intensity to increase in 2026, keeping free cash flow subdued for most GCC corporates, after negative free cash flow peaked in 2025 due to the timing and scale of investment programs.
Highly rated issuers are increasingly using asset-light approaches — such as joint ventures — to reduce upfront spending, while others may rely on hybrid instruments, equity increases, or asset disposals to manage funding pressures.
Macro assumptions remain closely tied to the oil backdrop. Fitch forecasts Brent crude will average $63 per barrel in 2026, down from $70 per barrel in 2025, as supply growth — particularly from the Americas — outpaces demand.
Prices are expected to remain above fiscal breakevens for most GCC producers, though Fitch highlighted exceptions including Bahrain and Saudi Arabia, with Oman only marginally below breakeven.
Across sectors, Fitch expects GCC property earnings to be underpinned by regional economic expansion and projected average occupancy above 90 percent in 2026, broadly in line with 2025.
It also pointed to a new Saudi regulatory provision freezing annual rent increases for five years across residential, commercial, and land leases, which it expects to limit landlords’ ability to pass on base rent increases.
For homebuilders, Fitch expects higher working-capital needs as pre-sales payment plans in prime Dubai locations ease toward 50 percent in 2026 from a peak of 70 percent, while projecting earnings before interest, taxes, depreciation, and amortization margins around 26.8 percent for most UAE-based homebuilders and gross leverage averaging about 2 times.
Fitch highlighted three key risks to monitor in 2026: potential regional escalation around the Red Sea that could disrupt supply chains and raw material costs; a widening scope of rescaling mega projects in Saudi Arabia; and funding costs staying higher than expected, which could curb access to debt capital markets for non-GRE issuers.
