Mass Evacuations As Cyclone Gonu Hits Oman

Heavy rain falls on a flooded street in Muscat, Oman, Wednesday June 6, 2007, as a weakened Cyclone Gonu battered the coast with strong winds and torrential rains, disrupting oil exports, shutting down air service and forcing thousands from their homes. (AP Photo/Hamid Al-Qasmi)
AP Photo/Hamid Al-Qasmi
Oman evacuated tens of thousands of people Wednesday, suspended oil exports and closed a major port as a weakening Cyclone Gonu roared toward the Strait of Hormuz — the world's major transport artery for Persian Gulf oil.

Oil markets were little changed in midday trading, but had the potential to increase as the storm — a rarity in the region — headed toward Iran.

As heavy rains lashed coastal areas of Oman, authorities closed all operations at the port of Sohar and evacuated 11,000 workers, port spokesman Dirk Jan De Vink said. Sohar's oil refinery and petrochemical plant remained running at very low levels, with authorities considering a total shutdown, he said.

Nasser bin Khamis al-Jashimi of the Ministry of Oil and Gas said rough seas prevented tankers from sailing from Omani ports, effectively halting its oil exports. But production was continuing everywhere except in one small field, he said.

In the United Arab Emirates port of Fujairah, the world's third-largest shipping fuel center, all refueling and ship-to-ship supply operations had been stopped, delaying the movement of tankers, officials said.

A few ships were still sailing through the nearby Strait of Hormuz, the transport route for two-fifths of the world's oil, despite 4- to 6-foot swells and strong winds, according to Suresh Nair of the Gulf Agency Co. shipping firm.

"About 17-21 million barrels a day of oil are coming out of the Persian Gulf. Even if only some of the tankers are delayed, that could reduce the supply of oil and increase prices," said Manouchehr Takin, an analyst at the Center for Global Energy Studies in London.

But Tim Evans, an analyst at Citigroup Global Markets, said the storm shouldn't have a major impact on prices because while it may delay oil shipments, they will eventually get to their destinations. Oil prices rose 25 cents to $65.86 a barrel in midday trading on the New York Mercantile Exchange after initially falling.

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    Scott Conroy is a National Political Reporter for RealClearPolitics and a contributor for CBS News.