Cristobal, the tropical storm that formed earlier this week, is gathering strength, threatening parts of Mexico and Central America with floods but has yet to reach the offshore platforms in the U.S. section of the Gulf of Mexico, if it reaches them at all.
AccuWeather reports Cristobal was moving at a maximum sustained speed of 45 mph and after it was upgraded to a tropical storm it became a record-breaker: the earliest recorded third named storm system in the Atlantic during hurricane season.
Meanwhile, oil companies active in the Gulf of Mexico are monitoring storm developments and taking early precautionary measures, Reuters reported. Shell, Chevron, Exxon, BP, Hess Corp, and Murphy Oil, the report said, were not, however, evacuating platform staff yet.
According to the National Hurricane Center, Cristobal will weaken to a tropical depression in the middle of this week before strengthening to a storm again around Friday and continuing to strengthen on Saturday. Early next week, it could make landfall in Louisiana, according to the forecast, crossing oil-producing parts of the Gulf of Mexico.
The Gulf of Mexico accounts for some 17 percent of U.S. oil production. In 2018, hurricane Michael shut in production of more than 700,000 bpd for a few days. The year before, however, hurricane season was a lot more devastating: total losses for the oil industry-production and refining-hit US$200 billion, which became the highest storm bill in history. Last year was relatively mild hurricane-wise for the oil industry but there were evacuations in July, ahead of a storm that wasn't even named.
This year there will be fewer evacuations if such are necessary. The rig count in the Gulf has fallen from over 20 in April to just 12 in the last week of May. There have, however, been Covid-19 related evacuations from Gulf platforms that, according to the Wall Street Journal, could threaten the profitability of some large projects.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More