TheNational Hurricane Centresaid Harvey made landfall between Port Aransas and Port O'Connor in Texas, the US state where roughly 17 per cent of America's crude oil output and nearly half of the country's refining capacity is located.
Houston, the most populous city in Texas, is home to the country's largest refinery and petrochemical complex.
The storm, a Category 4 hurricane, had maximum sustained winds of 195 kmph, and was forecast to bring "catastrophic flooding due to heavy rainfall and storm surge," it said.
It is the most powerful hurricane to hit the US mainland since 2005. Its effects could linger for days, with heavy rainfall through next week estimated to 40 inches in some areas.
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Millions of residents along the south Texas coast saw hurricane-force winds that uprooted trees and power poles.
They had frantically stocked up on food, water and gas, while others heading out of the storm's path boarded up windows and doors of their homes and businesses.
Harvey is likely to stall over Texas, leading to catastrophic flooding.
Houston Mayor Sylvester Turner said the city was "expecting a lot of rain, not too much wind. Let's assume there will be a lot of rain. The rain could come out of the bayou and overcome our capabilities".
Harvey is the first natural disaster faced by the the Donald Trump administration.
Before the landfall, Trump signed a disaster proclamation for Texas, freeing up federal funds for assistance. He tweeted that he had spoken with the governors of Texas and Louisiana and was "here to assist as needed".
"We can obviously tell already at this stage this is going to be a very major disaster," Abbot said, as more than 1,000 National Guardsmen were activated. "We're going to be dealing with really record-setting flooding in multiple regions."
A Tropical Storm Wind Warning has been issued for much of southeast Texas, including Houston and Galveston.
Highways leading from coastal areas were jammed as authorities issued urgent warnings to hundreds of thousands of residents to flee. Some highways were to be turned into one- way roads to speed the exodus from the storm zone.
It is forecast to be the most powerful hurricane to hit the mainland sinceWilma struck Floridain 2005, and could inflict billions of dollars in damage.
Before Wilma,Hurricane Katrinapummelled New Orleans in the same year, leaving more than 1,800 people dead.
A day before, oil and gas companies scrambled to prepare for Harvey, which developed so quickly in the Gulf of Mexico that many of them didn't have time to respond.
Other major companies, including ExxonMobil and Anadarko, also began scaling back production.
Oil analysts predict it could take more than three weeks for refineries in its path to resume normal operations.