On Monday, U.S. Gulf of Mexico offshore oil and gas producers began evacuating staff and halting drilling operations as Tropical Storm Francine approached the region. The storm, which is expected to intensify into a Category 1 hurricane with winds up to 85 mph (137 kph), is forecasted to make landfall on the Louisiana coast by Wednesday evening. The National Hurricane Center (NHC) has warned that Francine could bring life-threatening storm surges to the upper Texas and Louisiana coasts and hurricane-force winds to Southern Louisiana.
New Orleans and other nearby communities are preparing for potential flooding by providing sandbags and calling for voluntary evacuations. The storm’s path threatens U.S. oil and gas production facilities and coastal LNG export plants, with forecasts predicting 5-10-foot (1,5-3 m) storm surges in coastal Louisiana. The U.S. Gulf of Mexico accounts for about 15 % of total U.S. crude oil production and 2 % of natural gas production.
Source: NOAA NHC
In response, crude oil prices rose by 1,5 % on Monday due to concerns about potential disruptions, while natural gas futures fell by about 5 % due to fears that the storm could reduce demand by disrupting LNG export operations and causing power outages.
Exxon Mobil has evacuated staff and shut in production from its Hoover offshore platform. Shell is evacuating non-essential personnel from three offshore platforms and has paused drilling operations at two others. Chevron is also evacuating staff from four platforms but maintaining normal production levels. BP does not anticipate major impacts on its Gulf facilities. Freeport LNG, the second-largest LNG export plant in the U.S., has started storm preparations, though details were not provided.
The U.S. Coast Guard has implemented navigation restrictions in some Texas ports, including Brownsville, Corpus Christi, and Freeport. Ports in Houston, Galveston, and New Orleans remain open, with the Louisiana Offshore Oil Port (LOOP) operating normally.
Residents in Texas are being advised to prepare for flash flooding and heavy rain. The state’s electric grid has warned of possible local outages. In July, Hurricane Beryl caused significant disruptions and power outages in Texas, affecting energy infrastructure and gas stations.
