Hurricane Ida closes 96 percent of the Gulf oil production

Over the weekend, US offshore oil producers stopped almost all oil production from the Gulf of Mexico as Hurricane Ida struck south of New Orleans.

The US Bureau of Safety and Environmental Enforcement (BSEE), reported that 95.7 percent of Gulf oil production and 93.8 percent of natural gas production had been halted at 12:30 PM ET today.

Among those who moved in recent days were Shell, BP and Chevron as well as BHP and Equinor to evacuate workers from 288 out of 560 manned platforms. This region accounts for approximately 17pc total US crude oil output and 5pc dry-gas production.

Hurricane Ida, which was upgraded to a category 4 hurricane on Saturday, made landfall in southeast Louisiana today in the early hours of the morning. The National Hurricane Center has given Category 4 the second-most severe rating. A hurricane watch remained in effect from Intracoastal City, Louisiana, to the Louisiana/Mississippi border, as well as for the Lake Pontchartrain, Lake Maurepas and Metropolitan New Orleans regions, according to the National Hurricane Center.

At 1pm today, the storm was located 55 miles southwest of New Orleans. This is the 16th anniversary since Hurricane Katrina made a devastating landfall in the US Gulf. Maximum sustained winds were at 150mph (240 km/h), and severe wind damage was possible in the entire southeastern coast area of Louisiana. This region is home to many large oil refineries.

Shell’s deepwater Stones offshore operators, located 200 miles (322kms) southwest of New Orleans in Louisiana, would resume some production after the storm passes. After workers were evacuated on 26 August, the company shut down its Ursa/Mars, Olympus and Auger assets.

Chevron stated that its Gulf-based platforms were still closed on August 28th. Today, the company announced that its Fourchon- and Empire-terminals in Louisiana had been closed along with related pipeline systems.

Today, BP stated that all work on its platforms in the Gulf was suspended and that mobile drilling units were evading storms. ExxonMobil stated that it evacuated personnel offshore from the Hoover platform at the Gulf.

Although production shut-ins put upward pressure on oil prices last Wednesday, shutdowns at several US Gulf Coast refineries located in the path of the storm could push prices down.

Phillips 66’s 250,000 b/d Alliance refinery at Belle Chasse, Shell’s 225,000 b/d Norco refinery, Valero’s 215,000 b/d refinery St Charles, and the 135,000 b/d Meraux refinery in Meraux were all shut down by the hurricane. Some units and equipment at ExxonMobil’s Baton Rouge facility, which has a 500,000 b/d capacity, have been shut down.

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