Hurricane Francine Disrupts Energy Production and Agriculture in the U.S. Gulf

By Marianna Parraga, Erwin Seba, and Tom Polansek

HOUSTON/CHICAGO (Reuters) – Energy production and agricultural exports from the U.S. Gulf of Mexico faced partial disruption on Wednesday as Hurricane Francine approached.

Port Closures and Refinery Operations

Port Fourchon, Louisiana, and the Louisiana Offshore Oil Port (LOOP) were closed to vessel traffic. Other ports including New Orleans, Plaquemines, Cameron, Lake Charles, and Houma also ceased operations, tying up fuel, soybean, and grain exports. Agricultural officials warned that Francine’s rains could endanger the cotton crop in the region.

Several eastern Louisiana refineries operated with minimal staff, including Exxon Mobil’s Baton Rouge refinery, which reduced output to 20% of its capacity in preparation for the storm.

Impact on Fuel Prices

U.S. crude oil prices rose by over 2% on Wednesday due to fears of prolonged production stoppages amidst the storm. Nearly 39% of oil and almost half of natural gas production in the U.S. Gulf was offline, with significant evacuations of production platforms and rigs. These shut-ins resulted in the loss of about 675,000 barrels of oil and 907 million cubic feet of natural gas per day.

Analysts predict production could be impacted for up to two weeks depending on the hurricane’s landfall severity.

Hurricane Details

As a strengthening Category 2 hurricane, Francine’s eyewall approached southern Louisiana with sustained winds of up to 100 mph (155 kph). Heavy rainfall and flooding risks are expected across southeastern Louisiana, Mississippi, southern Alabama, and northern Florida. A state of emergency has been declared in Louisiana by both Governor Jeff Landry and President Joe Biden.

Fortunately, liquefied natural gas plants in the region are likely to avoid significant impact due to the storm’s track.

Texas Response

As Francine moved toward Louisiana, Texas ports, which had previously closed, began assessments for reopening. Coastal ports like Houston, Freeport, and Sabine lifted navigation restrictions.

Agricultural Impact

The storm has disrupted crop shipments to areas responsible for 55% of U.S. soybean exports. Barge companies are delaying operations until the storm passes. The overall impact will depend on the hurricane’s severity, although rain could aid low water levels on the Mississippi River. Farmers are preparing for the storm by harvesting crops where feasible, as significant cotton crops are vulnerable as they near maturation.