Oil slick may choke shipping along Gulf Coast

CHICAGO/NEW YORK (BestGrowthStock) – Shipping traffic in key U.S. Gulf of Mexico channels has been little affected by a giant oil spill in the region, but concerns mounted on Friday that the spill may soon choke off shipping arteries.

The Gulf of Mexico and Gulf Coast region is home to key transit routes for crude oil, refined products such as gasoline and diesel, and grains. The Mississippi River Delta includes key shipping lanes linking sea and land.

Crude from the spill, which began from a BP-operated oil field in the offshore Gulf last week after a drilling rig exploded and sank 50 miles south of the Louisiana shoreline, made landfall in the state on Friday.

Several forecasters warned the spill could affect Mississippi, Alabama and northwest Florida in coming days.

Depending on weather patterns, they said, the slick could also move westward, nearer to the country’s top oil refining zone and its only offshore oil port.

Around a fourth of U.S. oil production and 15 percent of the country’s natural gas production comes from offshore in the Gulf of Mexico.

No production is currently affected by the oil spill, according to the U.S. Minerals Management Service, which said Friday it was in regular contact with all producers in the region.

U.S. investment bank Goldman Sachs warned its clients Friday that the slick may affect oil tanker traffic in the region starting Friday, likely cutting crude imports to the world’s top consuming nation.

Goldman said the shipping lanes around the Louisiana Offshore Oil Port, which handles between 1 million and 1.5 million barrels a day of crude imports, could be affected.

LOOP, which is located off the Mississippi Delta area and west of the area affected by the spill for now, is connected by pipeline to the Gulf Coast, site of around half of U.S. refining capacity.

LOOP continued to operate normally following the spill, and did not expect any immediate impact from the oil slick.

“The heavy oil is a ways away from us. We don’t expect an impact. We’re operating normally, and we don’t expect our offloading to be affected any time soon,” LOOP’s Barb Hestermann told Reuters on Friday.

U.S. refiners have yet to experience any supply disruptions, although the U.S. Coast Guard has recommended that seagoing vessels avoid the area of the oil slick, which has grown to around 100 miles wide, potentially impeding tanker traffic in days to come.

An industry source said Friday that at least one major port in the Gulf Coast region was not allowing ships that have transited through oil slick areas to dock until they have been inspected.

The State of Alabama Port Authority said on Thursday that shipping traffic could be significantly delayed in the region if ships are made to navigate through oil slick, since they would require cleaning.

Valero Energy Corp, a top U.S. refiner, said on Friday there has been no problem getting deliveries to its Gulf Coast refineries. “We’re watching the situation closely,” said Bill Day, Valero’s spokesman.

Exxon Mobil Corp, whose Gulf Coast refineries include Baytown, the nation’s largest refinery at 572,000 barrels per day, also said the slick had not had any impact on its refineries in the region.

For a list of oil infrastructure in the Gulf of Mexico region, click:


No restrictions have been imposed on vessels into the Mississippi River, a key channel for grain transport, according the U.S. Coast Guard, but grain traders were closely monitoring developments.

“There are no current shipping restrictions in place but we are encouraging all mariners to monitor Channel 16 for any that may come on line in the future,” said Petty Officer David Mosley of the U.S. Coast Guard.

Shipments via the Southwest Pass, the main grain shipping lane into the Mississippi River, were proceeding normally early on Friday, grain traders said.

A Coast Guard bulletin issued on Thursday encouraged mariners to avoid the spill areas, if possible, or “maintain a safe speed” through affected areas, but imposed no direct restrictions.

The Mississippi River is the main channel for grain flowing from farms in the Midwest to export terminals at the gulf. Between 55 percent and 65 percent of all U.S. corn, soybeans and wheat exports are shipped from the Gulf.


(Reporting by Joshua Schneyer, Rebekah Kebede and Ernest Scheyder in New York, Karl Plume in Chicago, Janet McGurty in Toronto and Kristen Hays in Houston; Editing by and Walter Bagley)

Oil slick may choke shipping along Gulf Coast