Tropical Storm Isaac closed in on the US Gulf Coast on Monday, triggering evacuation orders in some areas and disrupting offshore oil production as it threatened to make landfall between Florida and Louisiana as a full-blown hurricane.

The wide, slow-moving storm swiped south Florida on Sunday and strengthened over the warm Gulf waters. It was expected to reach land late on Tuesday or early Wednesday, the anniversary of devastating Hurricane Katrina seven years ago.

The US National Hurricane Center warned the storm could buffet towns and cities in at least three US states near the shoreline and flood the northern Gulf coast with a storm surge of up to 12 feet (3.6 metres) in some areas.

"The weather will start going downhill overnight tonight on the northern Gulf Coast," Hurricane Center Director Rick Knabb told reporters. "Wherever it is people are going to be during the storm, they need to get there tonight."

Isaac was forecast to strengthen into a Category 1 hurricane, the lowest on the five-step Saffir-Simpson scale of hurricane intensity, with top winds of 95 mph (153 kph), before making landfall and moving over the Gulf Coast.

The storm could take direct aim at New Orleans, which is still struggling to fully recover from Katrina, which swept across the city on August 29, 2005, killing more than 1,800 people and causing billions of dollars of damage along the coast.

"That brings a high level of anxiety to the people of New Orleans," said New Orleans Mayor Mitch Landrieu. "I want to tell everybody now that I believe that we will be OK."

At 11pm EDT (0300 GMT), Isaac was centered 190 miles (305 km) southeast of the mouth of the Mississippi River with top sustained winds of 70 miles per hour (110 kph) - a speed that places the storm very near hurricane status - and swirling northwest at 10 mph (17 kph).

The storm was more than 400 miles (645 km) wide. Craig Fugate, director of the Federal Emergency Management Agency, said the worst effects may well be in Mississippi and Alabama.

"This is not a New Orleans storm. This is a Gulf Coast storm," Fugate said.

The governors of Louisiana, Mississippi and Alabama declared states of emergency, and mandatory evacuation orders went into effect for residents of several low-lying districts, including about 8,000 to 10,000 residents of Mobile, Alabama, as well as nearby Dauphin Island.

President Barack Obama approved Louisiana's request for a federal disaster declaration, Governor Bobby Jindal said. Obama's approval, given in a phone call that included the governors of Mississippi and Alabama, makes federal funds available for disaster recovery activities like clearing debris.

Energy producers in the Gulf of Mexico shut down some of their operations ahead of what could be the biggest test for US energy installations since 2008, when Hurricanes Gustav and Ike disrupted offshore oil output for months and damaged onshore natural gas processing plants, pipelines and some refineries.

The ports of Mobile and New Orleans were closed and barge traffic was suspended along southern portions of the Mississippi River.

In New Orleans, which is below sea level, long lines formed at some gas stations. Skies over the city were gray and a stiff breeze signaled the approaching storm. Along Canal Street in the city's historic French Quarter, crews were boarding up storefront windows.

Charles Neeley, a 69-year-old contractor overseeing a group of workers covering the windows of a drugstore, said he was undeterred by the storm.

"We usually ride out ones and twos and get the hell out for threes and fours," he said, referring to the categories of hurricane strength.

In Gulfport, Mississippi, as in many other coastal towns, people crowded supermarkets to buy bottled water and canned food.

"Traffic is crazy," said Debbie Fish, who lives in Biloxi, Mississippi. "It seems like everybody is out running around."

A bumper-to-bumper stream of vehicles left New Orleans on Interstate 10 that heads west toward Baton Rouge, as motorists made their way to higher ground.

At Mandina's Restaurant, a popular New Orleans eatery flooded by eight feet (2.4 m) of water during Katrina, fourth-generation owner Cindy Mandina said she was nervous.

"We're going to hold tight and hope for the best," Mandina said, as she prepared to close up before the storm. "Pre-Katrina, you'd never close, you'd stay open, maybe lose power and then reopen as soon as possible."

The US Army Corps of Engineers, equipped with dozens of bulldozers, piled tons of sand to reinforce the New Orleans levee system as Isaac lurked in the Gulf.

Emergency workers hope the levees, a series of massive walls which surround low-lying areas of the city, will hold up against the storm surge and avert life-threatening flooding.

Colonel Edward Fleming, commander of the Army Corps of Engineers overseeing flood protection, said improvements to the levee system had made New Orleans far less vulnerable to flooding than it was seven years ago.

But in low-lying Plaquemines Parish, which could be the first to be lashed by Isaac's winds and storm surge, workers scrambled to stack sandbags and reinforce levees.

Much of the parish lies outside the greater New Orleans levee system, and construction projects to bolster protection are not yet complete.

"We're really worried about the storm surge. We really need a few more years before we see an event like this," said Plaquemines Parish President Billy Nungesser.

Despite the threat to the US offshore oil patch, which produces about 23 per cent of the country's oil output and 7 per cent of its natural gas, prices for international benchmark Brent crude traded down $1.24 to $112.35 a barrel in late Monday activity.

Meteorologists at Weather Insight, an arm of Thomson Reuters, estimated that the storm temporarily shut down 88 per cent of US offshore oil production capacity and 80 per cent of the offshore natural gas output.

Once ashore, the storm could wreak havoc on low-lying fuel refineries along the Gulf Coast that account for about 40 per cent of US refining capacity.

That could send gasoline prices spiking just before the US Labor Day holiday on September 3, analysts said.

Isaac killed at least 22 people and caused significant flooding and damage in Haiti and the Dominican Republic before skirting the southern tip of Florida on Sunday. – Reuters