Ida’s wake continues to take toll on Gulf ’s oil output

The Energy Department lowered its oil production estimates in the U.S. Gulf of Mexico after Hurricane Ida temporarily halted production at the vast majority of offshore oil platforms last month.

U.S. Gulf oil output is expected to fall by 200,000 barrels per day in August to 1.5 million barrels per day. September production is expected to fall by 500,000 barrels per day to 1.2 million barrels per day, the agency said Thursday.

Ida caused the largest disruption to U.S. offshore oil production since hurricanes Delta and Zeta in October 2020. U.S. crude oil production fell by 1.5 million barrels per day between Aug. 27 and Sept. 3, the Energy Department said.

Offshore oil producers are still reeling from Ida, which made landfall Aug. 29 in Louisiana as a Category 4 hurricane. The storm shut down as much as 96 percent of crude oil production and 94 percent of natural gas production in the Gulf of Mexico, according to the Interior Department.

More than two weeks after Ida, nearly 30 percent of oil production and 40 percent of natural gas production in the Gulf remains shut down, the Interior Department said Wednesday. The Gulf of Mexico represents 15 percent of U.S. crude production.

The Energy Department expects that Gulf oil production will return to pre-Ida levels by October, but warned that refinery operations could take longer to recover. At least nine refineries shut down or reduced production in response to Ida.

Gulf Coast refineries took in 1.6 million fewer barrels of oil per day from Aug. 27 to Sept. 3. Although some refiners have restarted operations, the Energy Department expects that refinery runs will average 713,000 barrels per day less in September as a result of Ida.

“Repairs to any infrastructure required to resume refinery operations, however, could potentially take longer, making the forecast highly uncertain,” the Energy Department said.

Ida caused crude oil inventories in the Gulf to fall by 2.6 million barrels from Aug. 27 to Sept. 3, the Energy Department said. Over the same period. Crude oil imports into the Gulf Coast fell by 247,000 barrels per day while crude oil exports from the Gulf fell by 698,000 barrels per day.

Hurricane Nicholas, which made landfall in Texas as a Category 1 hurricane on Sept. 14, could delay the oil industry’s recovery from Ida, analysts said. Oil producers, refiners and petrochemical manufacturers are assessing damage from Nicholas, although preliminary reports found no significant damage from the storm.