Hurricane approaches the U.S. Gulf of Mexico, halting one-quarter of crude oil production and fueling a sharp rise in oil prices.

The Atlantic basin’s first hurricane of the season, Isaias, is bearing down on the U.S. Gulf Coast, forcing shutdowns of over one-quarter of offshore oil production in the region. Meanwhile, ongoing turmoil in the Middle East pushed international oil prices up more than 5% on Thursday. As of Wednesday noon, data from the U.S. Bureau of Ocean Energy Management showed that approximately 512,000 barrels per day (bpd) of oil production facilities in the Gulf of Mexico had been shut down—representing 25% of the region’s total output—while roughly 16% of natural gas production facilities were also offline. Major oil companies—including Shell, Chevron, and BP—have evacuated non-essential personnel and initiated shutdowns at multiple offshore facilities. The timing of this hurricane could hardly be worse. U.S. refineries are currently operating at about 95% capacity to compensate for supply shortfalls overseas caused by war, with gasoline and distillate inventories at seasonal lows not seen in decades—and the Strategic Petroleum Reserve at its lowest level since 1982. Robert Yawger, Head of Energy Futures at Mizuho Securities, described the situation as “the worst timing in 25 years,” warning that if U.S. refining capacity is forced offline, the consequences would be “catastrophic.” On Thursday, WTI crude surged 5.6% before partially retreating after President Trump stated he would not attack Iran before the election; it closed up 3.44% at press time. More than one-quarter of Gulf of Mexico crude output halted Energy producers in the U.S. Gulf of Mexico have begun shutting down offshore facilities and evacuating staff in anticipation of Hurricane Isaias. According to the U.S. National Hurricane Center, Isaias sustained winds of 75 mph and was located about 460 miles south-southwest of the mouth of the Mississippi River on Wednesday night. Current forecasts indicate the storm may make landfall near the Louisiana–Mississippi–Alabama–Florida Panhandle region late Friday or early Saturday. As of Wednesday noon, approximately 512,000 bpd of crude oil production had been halted in the U.S. Gulf of Mexico—equivalent to 25% of current regional output—while around 16% of natural gas production was also offline. In addition, personnel have been evacuated from eight offshore platforms and two drilling rigs. Major oil companies have taken responsive measures. Chevron reported initiating shutdown procedures and evacuating personnel across four Gulf assets; Shell has halted production and evacuated staff from five facilities, while also withdrawing non-essential personnel from another site. Harbour Energy has begun scaling back output and evacuating staff at certain facilities, and BP is evacuating non-essential personnel from its offshore installations. At present, the hurricane’s track remains the key determinant of the extent of energy supply disruption. If the forecast path holds, Chuck Watson, risk modeler at Enki Research, expects oil and gas production interruptions will likely last no longer than one week. Refining supply faces even greater risk Compared to offshore crude production, markets are more concerned about the hurricane’s potential impact on the U.S. refining system. Most U.S. refineries are located along the Gulf Coast and are currently operating at roughly 95% capacity—near full utilization. At the same time, the U.S. is relying on high refinery throughput to offset supply disruptions overseas caused by war and other factors, leaving virtually no spare capacity in the system.

Soaring oil prices ignite energy giants’ profits: ExxonMobil posts its highest quarterly earnings in four years—but still misses expectations; Chevron exceeds forecasts to post its highest profit in six years.

ExxonMobil reported second-quarter adjusted net income of $14.7 billion, or $3.52 per share—more than double year-on-year—but below the $3.60 per share consensus estimate compiled by London Stock Exchange Group (LSEG). ExxonMobil CFO Neil Hansen said the company’s underlying operational performance remained strong, but quarterly results were affected by “highly volatile commodity prices and margins,” which are difficult to predict accurately. CEO Darren Woods stated: “Q2 was challenging, but execution determined the outcome. As market conditions evolve, we’re delivering our products to the areas of greatest demand.” By business segment, ExxonMobil’s upstream operations posted adjusted profits of $9.2 billion, while refining generated $4.1 billion—both higher than Q1, yet still below market expectations. Biraj Borkhataria, analyst at RBC Capital Markets, noted that ongoing Middle East conflict continues to affect certain operations—particularly ExxonMobil’s substantial assets in Qatar, where limited LNG export routes may continue weighing on investor sentiment. Hormuz Strait risks curtail output; Middle East losses offset by U.S. shale ExxonMobil’s total production declined from 4.6 million barrels of oil equivalent per day (boepd) in Q1 to 4.5 million boepd in Q2. Approximately 450,000 boepd of that decline stemmed from Qatar’s LNG operations. Earlier Iranian attacks on energy infrastructure led to partial LNG capacity outages. Hansen said: “These facilities remain largely offline, and LNG output has barely recovered.” He added that Qatar currently maintains domestic natural gas output of about 150,000 boepd, while an Abu Dhabi field produces roughly 250,000 bpd—of which some 50,000 bpd remains offline. With transportation corridors still not fully restored, ExxonMobil cannot yet confirm revenue recognition for certain volumes. However, record-breaking output from the U.S. Permian Basin offset part of the Middle East shortfall. The company’s Permian production exceeded 1.8 million bpd in Q2. Additionally, ExxonMobil’s fifth floating production unit offshore Guyana is expected to begin operations in Q4 this year, adding an estimated 250,000 bpd of new capacity. The company warned that if the Strait of Hormuz remains fully closed throughout Q3, its Middle East production could fall roughly 750,000 boepd year-on-year. Chevron benefits from lower Middle East exposure, posting six-year-high profit In contrast to ExxonMobil, Chevron delivered a stronger Q2 performance. The company reported adjusted earnings of $12 billion, or $6.06 per share—above the $5.56 per share analysts’ consensus. CFO Eimear Bonner stated: “Despite persistent geopolitical uncertainty and market volatility, the company continues to deliver reliable energy needed globally.” Chevron emerged as one of the primary beneficiaries of the recent energy price surge, owing to its comparatively lower exposure to Middle East assets—allowing it to capture gains from elevated oil prices while suffering less from supply disruptions. CEO Mike Wirth cautioned that the longer the Middle East conflict persists, the greater the pressure on global energy supplies.

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