Tropical Storm Beryl is churning in the warm waters of the Gulf of Mexico, gaining strength and threatening to make landfall on the Texas coast as a hurricane by early Monday morning. The storm’s projected path has raised concerns about potential disruptions to the oil and gas industry, with major Texas ports from Corpus Christi to Houston at risk of closure.
Coast Guard Restricts Vessel Traffic in Anticipation of Storm
The U.S. Coast Guard is taking precautionary measures to ensure safety in affected areas. On Saturday, the Coast Guard implemented “Port Condition Yankee” in the Port of Corpus Christi. This measure restricts vessel movement across several ports along the Texas coast, from Matagorda Bay (located southwest of Houston) to the U.S.-Mexico border. The restrictions aim to minimize the risk of accidents and ensure the safe passage of vessels during the storm.
The possibility of port closures along the Texas coast poses a significant threat to the smooth operation of the oil and gas industry. Shipments of crude oil to refineries and the transportation of refined motor fuels out of those facilities could be halted or significantly disrupted. This disruption could lead to temporary shortages and price fluctuations in the region.
Oil refineries located along the Texas coast are taking proactive measures to minimize the impact of the storm. Citgo Petroleum Corporation, for instance, began reducing production at its Corpus Christi refinery on Saturday. The plan is to maintain minimal operations as the storm progresses towards Port Lavaca, a major pipeline hub. This approach allows Citgo to ensure the safety of its workers while minimizing potential damage to the refinery.
Oil Producers Evacuate Non-Essential Personnel
Oil producers are also taking precautions to ensure the safety of their personnel and minimize disruptions to production. Shell Plc, a major oil producer, evacuated workers from its Perdido platform in the Gulf of Mexico ahead of the storm’s approach. Production on the platform had already ceased before the evacuation as a further safety measure.
While the potential for port closures and refinery disruptions is high, the storm’s current track suggests that the biggest impact on offshore oil and gas production might be limited. Most of the northern Gulf’s offshore oil and gas production facilities are located east of Beryl’s projected path. However, even minor disruptions to U.S. Gulf of Mexico’s offshore production, which accounts for roughly 14% of the country’s total crude output, could cause price increases for U.S. oil and offshore crude grades.
Major oil companies with operations in the Gulf of Mexico are closely monitoring the development of the storm. Chevron Corp, one of the leading U.S. offshore producers, has maintained normal production at its operational assets for now. However, they have taken the precaution of evacuating non-essential personnel from some of their Gulf of Mexico facilities. This allows them to maintain core operations while ensuring the safety of their workforce. Similarly, Murphy Oil Corp has not yet halted production or evacuated workers, but they are keeping a close eye on the storm’s progress and will take necessary actions as the situation unfolds.
Source: Reuters
