Deep freeze hits Texas hard as US Gulf Coast shutters oil complex

A historic spell of cold winter weather in Texas has brought volatility to the US Gulf Coast regional oil and product markets this week as facilities across the entire value chain from crude oil production to refining and distribution have been affected. In this report, we examine the immediate impacts to the industry from 15-16 February as captured by our suite of real-time monitoring offerings.

Upstream

Oil production freeze-offs in the US exceeded 1 mn bpd on 15 February as below freezing temperatures impacted the Rockies and central US including Texas. Permian production was hit hardest with production freeze-offs, beginning as early as 9 February and impacting at least 6% of production. Eagle Ford production was impacted by lower temperatures with more than 225,000 bpd shut as of 15 February due to freeze-offs.

With temperatures expected to climb over the next week across the US, we expect most production to be fully restored. Usually it takes a couple days of above freezing temperatures to return production from freeze-offs. However, with widespread power outages that impacted Texas along with the colder temperatures it may take more time in that region to fully restore operations.

Production across the US was affected by the cold weather including North Dakota, DJ, Wyoming and Oklahoma basins. Daily oil production monitoring for 21 different US regions is available in our US oil production service.

Midstream

Pipeline

A slew of crude pipelines shut on 15 February amid the widespread winter weather and around 2.165mn bpd of pipeline capacity into the Gulf Coast shut at some point. Affected lines included trunklines from Cushing to the Gulf Coast (Seaway South, Marketlink) and trunklines from West Texas (BridgeTex, Cactus, Cactus II). Multiple lines remained offline as of 16 February although Marketlink resumed operations, according to our real-time pipeline monitoring.

Figure 1: Regional pipeline flows affected by winter weather