Tropical Storm Edouard made landfall on the Texas and Louisiana Gulf Coast on Tuesday evening, threatening to disrupt the supply of natural gas and petrochemicals in a region vital to the U.S. energy sector. The storm brought 60 mph winds as it reached shore, though it was not expected to strengthen into a hurricane.
A hurricane watch had been issued for an area stretching from High Island, Texas, to Cameron, Louisiana, encompassing the Sabine Pass, which connects to the Port Arthur refinery. The approach of Edouard prompted Cheniere Energy Inc. to keep three liquefied natural gas (LNG) vessels docked at its export plant in the Pass, with four additional vessels waiting offshore.
ExxonMobil and Cheniere Energy confirmed they were monitoring the storm, with Cheniere stating it would adjust operations if necessary. The storm was also forecast to bring as much as six inches of rain to Texas.
Storms in the Gulf of Mexico have historically posed risks to energy production and shipping. Hurricane Ike, which made landfall in 2008, significantly impacted the same region.
Potential disruptions to refineries and transportation routes in the Gulf could further complicate the global oil market. This comes after months of volatility driven by ongoing conflicts in Ukraine and Iran, which have contributed to dwindling crude supplies and rising oil prices. On Tuesday, the global Brent crude oil benchmark climbed nearly 4% to $94 a barrel, while U.S. crude prices rose to over $89 a barrel, with the national average gasoline price nearing $4.10 per gallon.