Storm Helene is moving eastward, with early reports indicating that Gulf of Mexico oil platforms are likely to avoid significant damage. Despite this, the storm is expected to strengthen rapidly.
The National Hurricane Center predicts that Helene could develop from a tropical storm into a Category 3 hurricane within the next 60 hours, potentially reaching hurricane status by the end of the day.
Florida has declared a state of emergency as the storm is anticipated to make landfall there. In response, oil and gas operators in the Gulf have begun shutting down production. 16% of crude oil production and 11% of natural gas output have been suspended, amounting to approximately 284,000 barrels per day (bpd) of oil and 208 million cubic meters of gas.
Historically, hurricanes that pass through the Gulf have caused substantial production shut-ins. The last hurricane led to the suspension of nearly 700,000 bpd for several days, which helped to elevate oil prices. Some production facilities remained offline for a week after Hurricane Francine made landfall in Louisiana.
Offshore platforms in the Gulf account for about 14% of total U.S. crude oil production, according to data from the Energy Information Administration. Additionally, the Gulf contributes 5% of the nation’s natural gas output.
The Gulf Coast is crucial to the U.S. energy sector, representing nearly half of the country’s oil refining capacity and 51% of gas processing capacity. Previous storms, including Francine, have led to refiners cutting processing rates in anticipation of severe weather.
While forecasts for this hurricane season have been alarming, with predictions of up to 33 named storms, the reality has been less severe. Helene is only the eighth named storm of the season, and half of the storms so far have made landfall.
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