Hurricane Isaias Shuts In About 71% of Gulf Oil Output as Category 3 Storm Nears Florida Panhandle

Hurricane Isaias has taken most of the U.S. Gulf of Mexico's offshore oil output offline ahead of landfall. As of Friday morning, producers had shut in about 71.5% of the Gulf's daily oil production and 58.8% of its natural gas output, and had evacuated 129 of the region's 371 staffed production platforms, according to the Marine Minerals Administration, the Interior Department agency that took over offshore oversight from BSEE and BOEM this year. That is up from 62.9%, or roughly 1.28 million barrels a day, on Thursday and about 25% on Wednesday, per the agency's daily figures as reported by Reuters. The Gulf produces about 2 million barrels of oil a day, roughly 15% of U.S. crude output.

CVX said it had evacuated most personnel and shut in five Gulf facilities while keeping four platforms producing through remote operation, and SHEL and BP also pulled crews. The National Hurricane Center put Isaias at Category 3 with 120 mph winds on Friday afternoon, with landfall expected late Friday between Pensacola and Fort Walton Beach, Florida. Earth Science Associates cut its estimate of total Gulf oil production at risk over the storm to about 7.2 million barrels, from 9 million on Thursday, as the track shifted east.

The bigger fuel-market question is refining rather than crude. About 500,000 barrels a day of refining capacity lies in the storm's path, including Chevron's Pascagoula, Mississippi refinery, while the track keeps Isaias east of the large Louisiana plants. The storm arrives in an already tight fuel market, with U.S. retail diesel near $6.28 a gallon. Even so, crude reacted calmly on Friday: Brent settled up 0.4% at $104.72 and WTI up 0.4% at $91.85, after a roughly 4% jump on Thursday that traders tied to both the storm and Iran-related headlines.

What to watch: how fast operators restore output once the storm passes, whether Pascagoula and the smaller refineries at Mobile and Tuscaloosa take damage, and whether product prices react more than crude. The shut-in percentages apply to federal offshore Gulf production only, not to total U.S. output.