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Gas Prices up, Oil Prices Down, Oil Production in the Gulf Slows

This story from ABC News points out something that the majority of supply chain managers know: natural disasters are intrinsically linked to supply chains. So when oil producers in the Gulf found out about Isaac, they began planning for slow downs and closed operations. Almost seventy eight percent of the oil production in the Gulf of Mexico halted due to the storm, resulting in the stopped production of 17% of our domestic oil: Also according to the Department of Energy, six refineries in the path of the storm reported that they are shut down or were in the process of shutting down. The shutdowns so far represent 1,316,500 barrels a day worth of petroleum production “” this accounts for about 8 percent of total U.S. refinery capacity (as in how much gas and diesel refineries can produce). While stories dealing with natural disasters normally feature the destruction of supply chains, it's important to keep in mind that companies are increasingly sensative to the potential outcomes of not preparing, and at times cause supply chain disruptions on purpose through closures of production centers. In such cases, the supply chain managers that depend on those particular production centers and manufacturers need to also have considerations in place for such shutdowns. In this way, storms like Isaac can have a reach well past the Gulf of Mexico to areas untouched physically by environmental disasters.

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