Sullom Voe strike threatens North Sea Brent oil output

Exports of the UK's Brent crude stream, one of the five grades that underpin the North Sea Dated benchmark, could be disrupted by a strike at the Sullom Voe onshore oil processing and storage terminal on the Shetland Islands next month.

The Unite trade union said dozens of its tug and towage workers have voted in favour of strike action in a dispute with the local council over long-service pay awards. "Industrial action is planned for the middle of May, which could result in a significant shock to oil processing and supplies," Unite said. The union did not say how long the strike would last.

Sullom Voe is one of the largest oil terminals in Europe, acting as a buffer between offshore fields and tankers waiting to ship crude to refineries. The terminal receives oil from several North Sea fields through the Brent and Ninian pipelines, which is commingled to produce the Brent stream. It also receives crude from the Clair field west of Shetlands.

Even before the Sullom Voe strike was announced, loading programmes showed a steep, maintenance-led decline in exports of the five North Sea benchmark crude grades — Brent, Forties, Oseberg, Ekofisk and Troll — to 639,000 b/d next month from 780,000 b/d in April. The planned strike will precede the start of major maintenance work on the Forties Pipeline System (FPS) on 27 May, which will crimp output of fellow North Sea benchmark grade Forties for three weeks.

Brent accounts for 58,000 b/d of May's scheduled loadings. The strike will have a limited impact on next month's Brent supplies, as only one cargo of the grade is due to load in the second half of May. By comparison, the disruption to Forties supplies caused by the FPS shutdown and other maintenance will be on a greater scale. Forties loadings are scheduled at around 135,000 b/d next month, down by nearly 50pc from April's 260,000 b/d. Only three Forties cargoes are due to load in the second half of May, compared with eight in the second half of April.

By Riyan Zerrouki