The blast and blaze at the Caribbean Petroleum Corp facility, a major supplier of gasoline and other oil products in the U.S. Caribbean island territory, sent up a huge plume of black smoke over the seaside capital.
Two people were reported hurt when the explosion rocked the surrounding area early in the morning, shattering windows in some buildings.
Governor Luis Fortuno ordered all schools closed in the San Juan metropolitan area.
The fire destroyed 11 of the Bayamon oil facility's 40 storage tanks, which contained products such as jet fuel, bunker fuel and gasoline. Firefighters were damping down the remaining tanks to stop the fire from spreading.
"It's impossible to say what happened right now. We are focused on containing the fire and ensuring everyone's safety," Fortuno said.
U.S. FBI agents said they would assist local authorities in investigating the cause of the explosion.
Government Development Bank President Carlos Garcia said the incident was being treated as an accident.
Housewife Tamara Rivera, 37, said she was awakened by a loud explosion that rattled her bedroom door and set off car alarms throughout her Puerto Nuevo neighborhood.
"At first I thought it was it was an earthquake, but when I went outside, I saw the big orange glow. It looked like daylight over there," she said.
Coast Guard Sets Up Safety Zone
Following the blast and fire, the U.S. Coast Guard established a safety zone in the part of San Juan Bay closest to the fire location. No vessels were permitted to enter this zone without prior permission from the Captain of the Port.
But the terminal where tourist cruise lines docked in Old San Juan was not affected, a Coast Guard spokesman said.
The fire and smoke could be seen for miles around and smoke at one point partially blocked a major expressway leading into San Juan, as well as affecting other roads.
The Caribbean Petroleum Corp (CPC) facility also included a 48,000 barrel-per-day (bpd) refinery, but this was not in operation, according to the CPC website. There were no immediate details on the extent of damage from the fire.
CPC has under contract more than 200 service stations in Puerto Rico to market Gulf brand gasoline and diesel.
Residents jammed gasoline stations, fearing a fuel shortage, but Fortuno said the island had a week's supply.
Consumer Affairs Secretary Luis Rivera Marin was meeting with Puetro Rico's suppliers and retailers to consider a possible gasoline price freeze. He said agency inspectors were in the streets watching for any steep gasoline price spikes.
Puerto Rico Gas Retailers Association President Hector Gierbolini he expected Gulf service stations would have supply problems, but other retailers should have available fuel.
