The United Steelworkers union that represents employees at more than 200 refineries, terminals, pipelines and chemical plants stopped work Sunday at nine sites after failing to agree on a renewed labor contract. The union rejected five offers made by Royal Dutch Shell Plc on behalf of companies including Exxon Mobil Corp. and Chevron Corp. since talks began Jan. 21.
The USW hasn’t called a strike nationally since 1980, when a stoppage lasted three months. While only one of the nine plants has curbed production amid the stoppage, a full walkout of USW workers would threaten to disrupt as much as 64 percent of U.S. fuel output. Shell and union officials began negotiations amid the biggest collapse in oil prices since 2008.
“If the strike escalates, that would be detrimental to the oil price,” David Lennox, a resource analyst at Fat Prophets in Sydney, said by phone. “It will put high U.S. production out on the market and there is nowhere for it to go.”