Hurricane Francine Disrupts Energy and Agricultural Exports from Louisiana
Source: DairyNews.today
Hurricane Francine has caused significant disruption to energy production and agricultural exports in the US Gulf of Mexico, particularly affecting Louisiana's oil refineries and crop shipments. As the storm approached landfall on Wednesday, oil refineries in the region slowed operations, and key ports were closed to vessel traffic, Reuters reported.
Impact on Energy Production
Louisiana's energy infrastructure took immediate precautions as Hurricane Francine barreled toward the coast. Port Fourchon, a critical hub for marine and equipment supplies to offshore oil producers, was shut down, as was the Louisiana Offshore Oil Port (LOOP), the nation's only deepwater facility capable of handling very large crude carriers (VLCCs) for oil import and export. The closures severely limited fuel and oil transportation in the region.
Six refineries in eastern Louisiana, including those near New Orleans, continued operating with minimal staff, anticipating the storm's landfall. Exxon Mobil’s Baton Rouge refinery reduced its output to as low as 20% of its capacity, cutting production to 104,500 barrels per day (bpd) from its total capacity of 522,500 bpd.
The US Gulf of Mexico, which accounts for a substantial portion of the nation’s oil and gas output, saw nearly 39% of oil production and almost 50% of natural gas production halted. According to the US Bureau of Safety and Environmental Enforcement, 675,000 barrels of oil per day and 907 million cubic feet of natural gas were taken offline as 171 production platforms and three rigs were evacuated in response to the hurricane.
US crude oil prices surged by $2 per barrel on Wednesday amid concerns about long-term production shutdowns. Alex Gafford, an analyst at East Daley Analytics, noted that oil and gas production could remain affected for up to two weeks, depending on the hurricane’s severity upon landfall.
Agricultural Exports and Crop Vulnerability
The hurricane also disrupted agricultural shipments through key ports, including New Orleans, Lake Charles, Plaquemines, Cameron, and Houma, which remained closed on Wednesday. This has stalled the movement of soybeans and other grains, which are typically exported from these hubs. The Mississippi Gulf region is responsible for 55% of US soy exports, and Francine's arrival has created significant challenges for agricultural traders.
Mike Steenhoek, executive director of the Soy Transportation Coalition, reported that barge companies had halted shipments to the affected areas, waiting for the storm to pass before resuming transportation. The timing of Francine's arrival poses risks to the region’s crop harvest, particularly for soybeans and rice. Farmers in the Gulf Coast and Mississippi Delta regions rushed to harvest crops ahead of the storm, but some, like cotton farmers, face a more difficult situation. The cotton crop, with open bolls, remains vulnerable to severe rain and wind damage, according to the USDA.
Broader Economic and Environmental Concerns
As Francine made its way through Louisiana, it brought heavy rainfall, with expectations of significant flooding across southeastern Louisiana, Mississippi, southern Alabama, and northern Florida. Louisiana Governor Jeff Landry, alongside US President Joe Biden, declared a state of emergency to manage the storm's aftermath.
The region's liquefied natural gas (LNG) facilities appear to have been spared from major disruptions, as the hurricane's track was further east of many of the coastal plants. However, post-storm assessments will be critical to understanding the full extent of the damage.
Ports in Texas, such as Beaumont, Port Arthur, Sabine, and Brownsville, which had initially closed due to the hurricane, have started post-storm evaluations in preparation for reopening, providing some relief to the state's energy infrastructure.
While traders are hopeful for minimal long-term damage, they are closely monitoring whether Francine will also bring much-needed rainfall to the Mississippi River. Low water levels in the river have slowed grain transportation, and some precipitation could help ease the current bottleneck in the supply chain. However, the hurricane’s full impact on both the energy and agricultural sectors will depend on its trajectory and severity in the coming days.
Louisiana's energy infrastructure took immediate precautions as Hurricane Francine barreled toward the coast. Port Fourchon, a critical hub for marine and equipment supplies to offshore oil producers, was shut down, as was the Louisiana Offshore Oil Port (LOOP), the nation's only deepwater facility capable of handling very large crude carriers (VLCCs) for oil import and export. The closures severely limited fuel and oil transportation in the region.
Six refineries in eastern Louisiana, including those near New Orleans, continued operating with minimal staff, anticipating the storm's landfall. Exxon Mobil’s Baton Rouge refinery reduced its output to as low as 20% of its capacity, cutting production to 104,500 barrels per day (bpd) from its total capacity of 522,500 bpd.
The US Gulf of Mexico, which accounts for a substantial portion of the nation’s oil and gas output, saw nearly 39% of oil production and almost 50% of natural gas production halted. According to the US Bureau of Safety and Environmental Enforcement, 675,000 barrels of oil per day and 907 million cubic feet of natural gas were taken offline as 171 production platforms and three rigs were evacuated in response to the hurricane.
US crude oil prices surged by $2 per barrel on Wednesday amid concerns about long-term production shutdowns. Alex Gafford, an analyst at East Daley Analytics, noted that oil and gas production could remain affected for up to two weeks, depending on the hurricane’s severity upon landfall.
Agricultural Exports and Crop Vulnerability
The hurricane also disrupted agricultural shipments through key ports, including New Orleans, Lake Charles, Plaquemines, Cameron, and Houma, which remained closed on Wednesday. This has stalled the movement of soybeans and other grains, which are typically exported from these hubs. The Mississippi Gulf region is responsible for 55% of US soy exports, and Francine's arrival has created significant challenges for agricultural traders.
Mike Steenhoek, executive director of the Soy Transportation Coalition, reported that barge companies had halted shipments to the affected areas, waiting for the storm to pass before resuming transportation. The timing of Francine's arrival poses risks to the region’s crop harvest, particularly for soybeans and rice. Farmers in the Gulf Coast and Mississippi Delta regions rushed to harvest crops ahead of the storm, but some, like cotton farmers, face a more difficult situation. The cotton crop, with open bolls, remains vulnerable to severe rain and wind damage, according to the USDA.
Broader Economic and Environmental Concerns
As Francine made its way through Louisiana, it brought heavy rainfall, with expectations of significant flooding across southeastern Louisiana, Mississippi, southern Alabama, and northern Florida. Louisiana Governor Jeff Landry, alongside US President Joe Biden, declared a state of emergency to manage the storm's aftermath.
The region's liquefied natural gas (LNG) facilities appear to have been spared from major disruptions, as the hurricane's track was further east of many of the coastal plants. However, post-storm assessments will be critical to understanding the full extent of the damage.
Ports in Texas, such as Beaumont, Port Arthur, Sabine, and Brownsville, which had initially closed due to the hurricane, have started post-storm evaluations in preparation for reopening, providing some relief to the state's energy infrastructure.
While traders are hopeful for minimal long-term damage, they are closely monitoring whether Francine will also bring much-needed rainfall to the Mississippi River. Low water levels in the river have slowed grain transportation, and some precipitation could help ease the current bottleneck in the supply chain. However, the hurricane’s full impact on both the energy and agricultural sectors will depend on its trajectory and severity in the coming days.
