The Obama administration lost its court bid to maintain a six-month moratorium on offshore deepwater drilling which a federal judge ordered lifted last month.
The Fifth Circuit Court of Appeals denied the government's emergency request to stay that judge's order pending appeal.
The motion was denied because the government failed to show "a likelihood of irreparable injury if the stay is not granted," the appeals panel judges wrote in a 2-1 ruling.
The government also "made no showing that there is any likelihood that drilling activities will be resumed pending appeal."
Interior Secretary Ken Salazar has said he will soon issue a new order to block deepwater drilling regardless of how the court ruled and oil companies have not resumed drilling due to the legal uncertainties.