Hurricane Ida hit the oil industry hard as it headed to New Orleans

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Few motorists question connected the 1-10 up of the accomplishment of Hurricane Ida successful New Orleans, Sunday, Aug. 29, 2021. (David Grunfeld/The Advocate via AP)

Hurricane Ida hit New Orleans Sunday aft cutting done the Gulf of Mexico, causing monolithic disruptions to US lipid accumulation earlier making landfall.

More than 95% of the Gulf of Mexico’s lipid accumulation facilities person been unopen down, regulators said Sunday, indicating the monolithic tempest is having a important interaction connected vigor supply.

Gasoline futures climbed 2.75% Sunday evening to $2.33 a gallon — up from $2.27 connected Friday. US lipid prices were up lone 0.6% Sunday evening, trading astatine $69.30 a tube — up from $68.74 connected Friday.

Six refineries successful the New Orleans country — including PBF, Phillips, Shell, Marathon and 2 Valero refineries — are unopen down close now, Andy Lipow, president of Lipow Oil Associates, a Houston-based consulting firm, told CNN Business. “It’s present a waiting crippled to measure immoderate upwind and flooding harm volition beryllium caused arsenic the hurricane passes done the area.”

The determination of Hurricane Ida’s landfall is “one of the worst imaginable for the lipid industry” and it could interaction the large pipelines that transportation substance from the Gulf Coast to the East Coast markets, Lipow said. The shuttered six refineries “account for astir 1.7 cardinal barrels per time of refinery capacity, representing 9% of the nations total,” helium added.

The different 3 refineries successful the country — Exxon, Placid and Kratz Springs — are successful the Baton Rouge area. “They look to beryllium operating astatine reduced levels,” Lipow said, adding that those 3 refineries relationship for astir 700,000 barrels per day, astir 3.5% of US regular consumption.

On Saturday, the Bureau of Safety and Environmental Enforcement (BSEE) prepared for the tempest by activating its Hurricane Response Team. The bureau said it was monitoring offshore lipid and state operators successful the Gulf arsenic they evacuated platforms and rigs. As of precocious Saturday morning, unit were evacuated from 288 offshore platforms. That represents astir 51% of the manned facilities successful the Gulf of Mexico, according to relation reports that were submitted to the BSEE.

To restart operations successful the aftermath of the storm, producers volition request to get unit backmost connected site, measure and repair harm and reconstruct utilities, Lipow said. But these initiatives instrumentality time, particularly nether the existent conditions.

The wide nonaccomplishment of lipid proviso from 1 of America’s largest vigor hubs is apt to assistance prices. US lipid prices roseate sharply past week up of Ida’s arrival. Oil futures are acceptable to statesman trading astatine 5pm ET Sunday.

The week aft Hurricane Katrina deed successful 2005, the mean terms of a gallon of regular state changeable up 46 cents, to $3.07 a gallon, according to information from the US Energy Information Administration. That 18% leap successful prices was the largest one-week percent spike successful information going backmost to the 1991 Gulf War. It took 2 months for state prices to instrumentality to the pre-Katrina levels aft that storm.

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