(Bloomberg) -- The flow of Brent crude oil to an export terminal in Scotland was halted this week, a development that will further erode already weak shipments from the North Sea.
EnQuest Plc, which operates the Sullom Voe Terminal in the Shetland Islands, said inflows of both Ninian and Brent crude were halted after a “minor defect” was found during a routine inspection on May 1, operator said. The pipeline systems should resume Sunday.
The outage resulted in all four cargoes on the Brent loading program for June being deferred by as many as 13 days, a revised schedule seen by Bloomberg shows. Traders participating in the North Sea market said they anticipate delays to May cargoes too. Tanker shipments won’t be halted while the defect is rectified, according to EnQuest.
While Brent gives its name to one of the world’s main crude oil benchmarks, production these days is a fraction of what it used to be. Output represents less than 10 percent of the grades underpinning North Sea oil benchmark known as Dated Brent.
The disruption comes at a time when wider crude flows from the North Sea have declined thanks to a mixture of maintenance and unplanned work. Loadings of the 12 main crude blends in the North Sea will now fall to 1.69 million barrels a day in June, the fifth straight monthly drop. They’ll be the lowest level since December when an outage on the much bigger Forties Pipeline System hindered output.
Sullom Voe handles production from more than two-dozen oil fields and receives crude through the Brent and Ninian pipeline systems, according to EnQuest’s website. While Brent loadings have averaged about 82,000 barrels a day so far this year, they slumped to about three quarters of that in April.
Brent is one of five grades used to price the global benchmark Dated Brent. The others are Forties, Oseberg, Ekofisk and Troll. Futures contracts briefly pared losses, before extending their decline. They traded 29 cents lower at $73.07 on the ICE Futures Europe Exchange at 4:33 p.m. in London.
Brent futures reached a year-to-date high of $75.47 on April 24. The increase was largely caused by lower production in the North Sea as well as tensions between the U.S. and Iran, PVM Oil Associates Ltd. said earlier Thursday.
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