U.S. oil companies stop production in the Gulf of Mexico
United States energy companies suspended production of 1.74 million barrels of oil per day in the Gulf of Mexico when Hurricane Ida hit the Louisiana coast.
Energy companies in the United States suspended production of 1.74 million barrels of oil per day in the Gulf of Mexico on Sunday, according to the Bureau of Safety and Environmental Enforcement (BSEE), as Hurricane Ida hit the Louisiana coast as a Category 4 storm.
In addition, according to the regulator, nearly 94 percent of U.S. Gulf of Mexico natural gas production in the Gulf of Mexico was also disrupted due to the storm. Oil companies rushed to evacuate employees from offshore infrastructure in the days leading up to the storm, resulting in the shutdown of their Gulf facilities.
In all, energy companies had evacuated 288 rigs as of Sunday, more than half of those in the Gulf of Mexico, according to BSEE. The Louisiana Offshore Oil Port (LOOP), the largest privately-owned crude oil terminal in the United States, halted deliveries ahead of the storm. The LOOP marine terminal is located in open water about 29 miles off the Louisiana coast, while Port Fourchon is its land base.
According to Port Fourchon's website, it handles 10 to 15 percent of the country's domestic oil, 10 to 15 percent of foreign crude imports, and is also connected to nearly half of U.S. refining capacity. It also serves 90 percent of the deepwater oil production in the Gulf of Mexico. Other ports in southern Louisiana, including Houma and New Orleans, were closed Sunday, and in Mississippi, those in Biloxi, Gulfport, Pascagoula and the Gulf Intercoastal Waterway.
Phillips 66 shut down its Alliance plant on the coast in Belle Chasse, while Exxon Mobil reduced production at its refinery in Baton Rouge, Louisiana, on Saturday. Power outages were widespread in the early hours of the storm, with more than 530,000 homes and businesses in the state without electricity, according to Energy Louisiana. Utilities were bringing in additional personnel and equipment to deal with the power outages.
Ida gained strength late Saturday night and made landfall near Port Fourchon at 16:55 GMT, according to the National Hurricane Center (CNH).
The increase in oil production agreed last month by the nations that make up the Organization of the Petroleum Exporting Countries and its allies (OPEC+) could be reconsidered at their next meeting on Sept. 1, Kuwait's Oil Minister Mohammad Abdulatif al-Fares said Sunday. "Markets are slowing down. As Covid-19 has started its fourth wave in some areas we should be careful and reconsider this increase. The 400,000 (bpd) increase could be stopped," Fares told Reuters ahead of a cartel meeting next Wednesday.
