Permian Basin takes the biggest hit
US oil producers lost up to 2 million barrels per day over the January 24-25 weekend as a severe winter storm swept across more than two dozen states, freezing wellheads, knocking out power, and shutting down pipelines from West Texas to North Dakota.
The Permian Basin bore the brunt. Consultancy Energy Aspects estimated about 1.5 million bpd of the total decline came from the nation's top-producing region, where localized power outages and frozen equipment forced operators to halt drilling and shut in wells. By Monday, Permian shut-ins had eased to around 700,000 bpd.
ConocoPhillips reported its Permian crude output was down 175,000 bpd as of Sunday. Exxon Mobil shut units at its Baytown, Texas petrochemical complex after hatches froze open. Chevron's Midland operations also reported weather-related disruptions. In North Dakota, the third-largest oil-producing state, output fell an estimated 80,000 to 110,000 bpd.
Gulf Coast exports dropped to zero
The storm brought US crude inventories into sharper focus after Gulf Coast oil and LNG exports fell to zero on Sunday, according to ship-tracking firm Vortexa. Ports reopened Monday and flows quickly rebounded above seasonal norms, but the brief shutdown tightened global supply at a time when markets were already on edge over geopolitical tensions with Iran.
Natural gas was hit even harder. Rystad Energy tracked an initial loss of about 2 billion cubic feet per day from the Bakken, Rockies, and Mid-Continent, followed by a sharper drop of 12 Bcfd from the Permian and Gulf Coast. Total gas production losses reached 20 to 25 Bcfd at the peak.
Prices rally, but recovery is underway
WTI crude traded at $65.34 per barrel on Wednesday, up 2.13% on the session. Brent crude climbed to $69.36, its highest level since late September. Both benchmarks have gained more than 10% this month.
PVM oil analyst Tamas Varga said the cold spell will likely trigger sizeable drawdowns in crude inventories over the coming weeks. EIA data released Wednesday already showed a 2.3 million barrel drop in US crude stocks, defying expectations for a build.
Still, the disruption appears short-lived compared to the 2021 Texas freeze. There were roughly two dozen reports of upsets at gas processing plants and compressor stations this time, versus more than 200 during Winter Storm Uri five years ago. Production across the Permian is expected to be fully restored by January 30.
AccuWeather estimated total storm damage and economic losses between $105 billion and $115 billion across more than 200 million affected people, though some economists have called that figure too high. The 2021 Texas storm cost about $26 billion.
What to watch
Traders are monitoring how fast output snaps back and whether cold weather lingers long enough to drain storage. The next EIA weekly inventory report will be closely watched for signs of deeper supply drawdowns. Track the latest price movements on our live market data page.