April 30, 2010 / 5:51 AM / in 7 years

Oil spill raises shipping fear, no impact yet

NEW YORK (Reuters) - Major oil and grain shipping channels through the Gulf of Mexico are not being affected by the massive oil slick, officials said on Thursday amid concerns that it could disrupt operations in the region.

While oil traders braced for potential freight restrictions that could curtail crude oil imports to the nation’s refining hub, the Coast Guard sought to prevent the spreading slick from affecting traffic and the nation’s biggest oil import terminal off Louisiana said it did not anticipate a disruption for now.

“It is our goal not to allow disruption of traffic on the Mississippi River,” said Coast Guard Rear Admiral Mary Landry, who is heading the federal cleanup effort. “We cannot disrupt maritime commerce.”

The Louisiana Offshore Oil Port, which handles more than 1 million barrels a day of crude oil imports, is operating normally and doesn’t expect any impact on operations, LOOP spokeswoman Barb Hestermann said.

Fears of disruption to crude oil imports or soybean exports escalated on Thursday as an offshore oil well continued to gush crude, and after White House spokesman Robert Gibbs told reporters that President Barack Obama had been briefed on how the spill could interfere with shipping channels.

“A big threat is to tanker traffic both inbound and outbound,” said a crude oil trader who declined to be named. “The closer it comes to shore the bigger the problem, since the Coast Guard will not want any vessel to be fouled by oil.”

But for the moment, traders and port officials said they didn’t anticipate a major impact, even after the U.S. Coast Guard ordered commercial seagoing vessels to avoid the slick, caused by the collapse of a deepwater drilling rig.

The giant LOOP terminal typically handles up to 15 percent of U.S. crude imports and supplies refiners in the key Gulf Coast region. It is located some 50 to 60 miles west of the oil slick, which has been moving eastward, potentially placing shipping traffic at risk.

The oil spill -- from a BP Plc rig that exploded in the Gulf of Mexico last week -- is spewing around 5,000 barrels a day, and officials have said it could take 90 days to stop the flow, raising the specter that the slick could expand, propelled by winds and sea currents.

Any ship passing through the slick could be halted and ordered to be cleaned, according to Judith Adams, a spokeswoman for the Alabama State Port Authority.

Adams said that the Port of Mobile, Alabama, which includes terminals that handle some oil and petroleum product shipments, currently expects little impact to vessel traffic beyond possible course changes to avoid the spill.

The Southwest Pass Lightering area, where about 1 million barrels of crude are transported ashore daily, near the Mississippi Delta in Southern Louisiana, also remained unaffected, said David Brasher, the head of lightering activities at shipping industry group SGS.

“The slick is headed more toward the coast between Louisiana and Alabama, so as long as the winds keep going that way, it might not affect the lightering area itself too much,” Brasher told Reuters.

But commodities traders and shipping sources warned that several risks remain for vessel traffic in the region.

River barge traffic in the Delta region also faces risks, including potential disruptions to outbound vessel traffic.

The Mississippi River is a vital waterway for the transportation of grains from production centers in the Midwest to the U.S. Gulf, which handles 65 to 70 percent of all grain exports from the United States, depending on comparative ocean freight rates with the Pacific Northwest, the shortest U.S. sea route to Asia.

Reporting by Joshua Schneyer, Rebekah Kebede and K.T. Arasu; Editing by Lisa Shumaker

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