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Hurricane Isaias shuts about 25% of US Gulf oil production
About 511,000 barrels per day of Gulf oil was shut in, while roughly 16% of natural gas production was also offline as brokers weigh business interruption and supply-chain risk.
Hurricane Isaias is forcing shutdowns across portions of the US Gulf of Mexico energy system, with insurers and brokers tracking potential losses beyond physical damage. Insurance Business reports that about 25% of US Gulf oil production, or more than 511,000 barrels per day, had been shut in as the storm approached on Thursday, along with about 16% of natural gas production.
The storm has already led major producers to pause operations, adding to uncertainty around how quickly supply can restart. Shell halted production at five offshore facilities, while Chevron began shutdown procedures at four of its operated Gulf facilities and evacuated personnel.
While offshore production can resume relatively quickly if storms pass without major damage, the bigger risk is whether Isaias disrupts Gulf Coast refineries, pipelines, ports, or power supplies for longer periods. Insurance Business said brokers are specifically watching for potential business interruption losses and wider supply chain impacts.
The concern comes as fuel prices are elevated, increasing the stakes for insurers and the energy market. According to the outlet, the US Energy Information Administration put the national average on-highway diesel price at $6.199 a gallon on October 5, up $2.488 from a year earlier, even as it was down 18.3% from the prior peak.
Latest closeNat gas $3.073 ▲1.2%