Dec. 12 (UPI) -- It's too soon to say how quickly repairs to a major oil pipeline system in the North Sea are made, but it may be a matter of weeks, the operator said.
Brent crude oil prices went up 2 percent during Monday's session after pipeline operator Ineos shut down the Forties crude network in the North Sea after discovering a "hairline crack" on a pipe near Aberdeen, Scotland, last week. The system carries about 40 percent of the oil produced in the British waters of the North Sea, or about 450,000 barrels of oil per day.
No oil was seen spilled in the surrounding environment, though some area residents were relocated elsewhere as a precaution. Ineos said that, after discovering the fracture, it reduced operating pressure to try to contain the incident, but the crack spread and the entire system was shut down.
"It is too soon to say how quickly the repair will take at this point but it is expected to be a matter of weeks rather than days," the company said in its latest update from Tuesday afternoon local time.
For the oil market, the Forties system carries production from more than 85 fields in the North Sea, as well as a few from Norwegian waters. It then takes that oil to onshore terminals and refineries. Ineos only purchased the system from BP a few months ago.
"We will continue to liaise with Ineos and offer any support we can to help bring this situation to a successful conclusion as quickly as possible," a spokesman at BP told UPI.
London oil broker PVM said the outage represents a massive disruption and comes as prices are already supported by an extension to a production cut agreement from the Organization of Petroleum Exporting Countries.
"Pipeline shutdowns always support crude oil prices but yesterday's closure of the Forties pipeline system for weeks is one of the most significant unplanned crude oil shortage we have seen this year," PVM analyst Tamas Varga said in an emailed market report.
The Forties system carries Brent, Forties, Oseberg and Ekofisk oils, which account for a basket that make up the global benchmark, which was already up 1 percent as of 6:00 a.m. EST.
"We are monitoring the situation closely, and stand ready to act, but at the moment we so no need as the market is amply supplied from other sources and stocks are well above the 5-year average," a spokesman for the International Energy Agency told UPI.
During the last decade, commodity pricing group S&P Global Platts changed up the basket of what constitutes the benchmark by adding Forties, Oseberg and Ekofisk grades from the North Sea as production from the Brent field itself started to decline.
The pricing agency in January said now that those other fields are starting to show their age, it's time to consider adding another blend to what constitutes Brent by adding oil from the Troll field, operated by Norwegian energy major Statoil.
Last year, the Troll field in the Norwegian waters of the North Sea reached its 1 billionth barrel of oil after 20 years in production. Statoil did not respond to questions about its response to the outage.
Jonathan Leitch, a research director for refining markets at consultant group Wood Mackenzie, said in emailed commentary that regional refineries are cut off now from their normal diet for crude oil. Others, like those in Asia, may be able to quench their appetite from crude oil from West Africa.
The spike in Brent crude oil prices also widens the spread, or difference, between West Texas Intermediate, the U.S. benchmark for the price of oil. That could mean even more crude oil exports from the United States.