Oil prices fell on Tuesday as a massive winter storm disrupted crude production and refinery operations in the U.S. Gulf Coast. Brent crude futures fell $0.44, or 0.7%, to $65.15 a barrel, while U.S. West Texas Intermediate (WTI) crude fell $0.35, or 0.6%, to $60.28 a barrel.
The deadly and widespread “Arctic Blast”, which paralyzed much of the American East with ice, snow, and cold last week, caused up to 2 million barrels per day (bpd) of crude output to be lost, representing roughly 15% of the country’s national production. The Permian Basin accounted for about 1.5 million bpd of the total decline.
Arctic Blast Cuts U.S. Oil Output by 2M Barrels per Day
The drop in crude production was caused by the energy infrastructure, including gas compressors and pipelines, facing freezing conditions, and several refineries along the Gulf Coast reporting operational issues. However, the losses eased on Monday, with Permian Basin shut-ins estimated at 700,000 bpd and production set to be fully restored by January 30.
ConocoPhillips (COP.N), a leading U.S. oil and gas producer, saw its Permian crude production fall by 175,000 bpd on Sunday, as a result of the frigid weather. Chevron (CVX.N) reported that its hatches were frozen during the storm in Midland, Texas. Meanwhile, ExxonMobil (XOM.N) experienced multiple shutdowns in gas compressors across different fields owing to low ambient temperatures, affecting oil production as compression is used to lift oil out of the ground.
“We closely monitor severe weather conditions and proactively implement necessary safety and operational measures to safeguard our people, maintain infrastructure integrity, and ensure continuity of essential operations,” a spokesperson for ExxonMobil told Reuters.
Oil companies are also faced with third-party takeaway challenges due to hazardous road conditions, especially regarding water hauling and technician dispatch for repairs. Roughly two dozen companies reported issues at natural gas processing plants and compressor stations in Texas. However, this was pale in comparison to more than 200 reported upsets during the first five days of a severe winter storm in 2021, according to analysts at TACenergy.
According to the director of North Dakota Pipeline Authority, Justin Kringstad, output in North Dakota, the third-largest oil-producing U.S. state, was estimated to be down by around 80,000 to 110,000 bpd as of Monday. Meanwhile, associated wellhead natural gas production was estimated to be down by 0.24 to 0.33 billion cubic feet per day.
Average gas output in the Lower 48 U.S. states dropped to 106.9 billion cubic feet so far in January, which is down from a monthly record high of 109.7 billion cubic feet in December 2025, as production was shut down due to severe weather conditions.
Several refineries along the U.S Gulf Coast reported issues related to the freezing weather over the weekend, with ExxonMobil shutting its units at the Baytown petrochemical complex in East Texas. Cenovous Energy’s (CVE.TO) refinery in Lima, Ohio, which has an output of 172,000 bpd, experienced mechanical issues. Normal operations are expected to be delayed at the facility until later this week due to extreme cold.
Rystad Energy noted that peak natural gas production losses are estimated to hit around 20 billion cubic feet, owing to the storm. Four-month gas futures closed at their highest level since December 2022 on Monday, rising nearly 30% on the day to settle at $6.80 per million British thermal units.
Arctic Blast Leaves 810,000 Without Power, Kills 30 Across U.S.
Some 810,000 users across the U.S. remained without power on Monday following the Arctic Blast over the weekend that brought heavy snow, sleet, and freezing rain from the Ohio Valley and mid-South to New England. Cold temperatures are expected to persist in parts of the United States in the coming days.
The snow and ice storm knocked out power to more than a million homes and businesses along the U.S. Gulf Coast and Southeast, including in Texas. The largest U.S. power grid, PJM, has anticipated that generation outages for Monday would rise to 22.4 GW, or about 16% of total committed capacity. Most of these outages are expected in Dominion Energy’s Mid-Atlantic territory, according to PJM data.
Demand on PJM was 124 GW on Monday, above the forecast of 123.3 GW, but operations data show that the facility continues to meet demand. The Southwest Power Pool, which operates power grids across 14 U.S. states in the Midwest and West, said it has extended a cold weather advisory for the region by two days, running until midday Wednesday. This is meant to alert the public about possible disruptions caused by frigid temperatures, but it does not require homes and businesses to conserve energy.
Severe Snowstorm Could Cause Up to $115B in Losses, Biggest Since 2025 L.A. Fires
According to AccuWeather data, the severe snowstorm impacting the U.S. is expected to cause $105 billion to $115 billion in damages and economic losses. This estimate would make it the costliest severe weather event in the country since the Los Angeles wildfires in 2025.
The storm has resulted in at least 30 deaths across multiple states, with causes of fatalities including hypothermia, traffic accidents, sledding incidents, and snowplow collisions. More than 12,000 flights were delayed or canceled nationwide over the weekend, with over 285 additional cancellations announced on Tuesday.
