Why Hurricane Ida is unlikely to distort oil markets

Dr Nakhle argued that the shutdown in oil production from the Gulf of Mexico (GoM) had somehow contributed to the recent increase in oil prices, which is not surprising due to the fact that the US is the biggest oil producer in the world and the GoM contributes to around 17% of total domestic production. How things evolve, however, will depend on the extent of the damage caused by Ida particularly on the production, distribution and processing infrastructure and which remains unclear.

She further cautioned against comparing Hurricane Ida with Hurricane Katrina in terms of impact on global oil markets as conditions have fundamentally changed, and today the market is over-supplied.