Nation's largest oil refinery forced to shut down as Harvey floo - KMOV.com

Nation's largest oil refinery forced to shut down as Harvey floods Port Arthur

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Residents are seen here evacuating Houston, Texas on August 29, 2017 after Hurricane Harvey caused catastrophic flooding in the area. (Credit: Dion Laurent / Instagram) Residents are seen here evacuating Houston, Texas on August 29, 2017 after Hurricane Harvey caused catastrophic flooding in the area. (Credit: Dion Laurent / Instagram)

By Julia Horowitz and Jill Disis

NEW YORK (CNNMoney) -- The largest oil refinery in the country is shutting down as Hurricane Harvey causes more catastrophic flooding.

Early Wednesday, Motiva said it started closing its Port Arthur refinery "in response to increasing local flood conditions." The plant won't open until flood waters recede.

Motiva had been steadily reducing production at the plant for days. Late Tuesday it was running at only 40% capacity.

Harvey, which has been downgraded to a tropical storm, made a second landfall Wednesday near the Louisiana-Texas border. It is expected to bring winds of 30 to 40 mph and a 2- to 4-foot storm surge in the area.

Port Arthur is located along the border of both states. Mayor Derrick Freeman said on Facebook overnight that the "whole city is underwater right now."

Motiva's decision follows a move by ExxonMobil to shut down its oil refinery in Baytown, Texas on Sunday. The company said it discovered roof damage at the plant, which is the second-largest in the country.

In all, at least 12 refineries are currently offline, and flooding has knocked out a significant portion of the nation's refining capacity.

The reduced capacity means significantly smaller amounts of oil can be turned into gasoline and other products like jet fuel.

Analysts predict drivers will see higher gasoline prices due to restrictions on supply.

The Motiva refinery is owned by Saudi Arabia. Saudi Aramco, the kingdom's state-owned oil giant, took full control of the plant in May.

-- CNNMoney's Matt Egan contributed to this report.

TM & © 2017 Cable News Network, Inc., a Time Warner Company. All rights reserved.

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