25% Of US Offshore Gulf Oil Output Shut As Hurricane Isaias Nears, Threatens Refineries

Hurricane Isaias forced offshore oil and natural gas producers in the Gulf of America to halt a sizable amount of production as the Atlantic’s first hurricane of the season churned toward the coast, with potential landfall impacts across portions of Louisiana, Mississippi, Alabama, and the Florida Panhandle.

Isaias had sustained winds of 75 miles per hour and was about 460 miles south-southwest of the Mississippi River mouth overnight, according to the National Hurricane Center.

Producers with offshore rigs have already shuttered 25% of crude output and 16% of NatGas production and evacuated workers from eight platforms and two rigs.

Models increasingly point to landfall late Friday night or early Saturday morning east of major energy assets onshore and offshore in Mississippi and Louisiana. 

An abrupt westward shift in the hurricane’s cone of uncertainty would put major refineries at risk, including Chevron’s Pascagoula refinery on Mississippi’s Gulf Coast. It refines 369,000 barrels of crude a day into gasoline, diesel, jet fuel, and premium base oils.

The disruption to offshore oil and NatGas rigs comes as a global refining crisis deepens, and there is little room for error in the US, as refineries operate near full capacity.

Enki Research risk modeler Chuck Watson said that oil and NatGas outages would likely last no more than a week if the forecast track holds.