WTI-Brent Crude Spread Snaps After Forties Pipeline Closure For “Weeks, Not Days”
Following the discovery of a “small hairline crack” in The Forties Pipeline System – one of the most important oil conduits in the world – its operator Ineos has decided a total controlled shutdown “for weeks, not days” is the safest option. This has sent the spread between WTI and Brent soaring…
A “small hairline crack” was discovered during a routine inspection last week by Ineos contractors, just south of Aberdeen in Scotland. The pipeline’s pressure was reduced for a full assessment but during that time the crack extended.
As Bloomberg reports, Brent futures rose as much as $1.18 to $64.71 a barrel in London – the highest since June 2015…
“Despite reducing the pressure the crack has extended, and as a consequence the Incident Management Team has now decided that a controlled shutdown of the pipeline is the safest way to proceed,” Ineos said in a statement.
“This will allow for a suitable repair method to be worked up.”
The pipeline system feeds crude to the Hound Point export terminal near Edinburgh in Scotland.
At over 400,000 barrels a day, the supplies that flow through the link are the single largest constituent part of the Dated Brent grade that helps to settle more than half the world’s physical oil prices.