Britain's biggest oil pipeline from its North Sea fields is likely to be shut for two weeks for repairs, an industry source said on Tuesday, sending international crude prices higher.
The closure has also disrupted gas flows through the network, which carries a third of Britain's gas produced offshore. It has struck during a winter freeze in Britain, when snowfalls and ice have driven up demand for heating fuel, reports Reuters.
The pipeline, which carries about 450,000 barrels per day (bpd) of Forties crude, was shut on Monday after cracks were found. Benchmark Brent crude prices rose above $65 per barrel for the first time since mid-2015.
"We're hearing it will be likely down for two weeks," an industry source familiar with the operations said.
INEOS, the operator which completed the purchase of the Forties pipeline system from oil major BP in October, said it was too soon to say how long repairs would last but added that it would be "weeks rather than days."
A minor lead had caused a partial shutdown on Dec 7.
The pipeline has particular significance to global markets because Forties is the biggest constituent in the benchmark blend Brent, against which other crude prices are broadly based.
Forties is carried to Hound Point on the Scottish coast, where it is either loaded onto tankers, stored in tanks or piped to the 200,000-bpd Grangemouth refinery.
"If it's a lengthy outage, then a recovery period for the fields will be long as well," the trading source said.
The closure has created havoc with loading schedules in the North Sea with one trading source saying cargo owners had been offered options to drop cargoes from the loading program.
"At this point we would expect a large deferral list for the Forties loading program to spill over into January," analysts from JBC Energy said in a note.
INEOS was due to meet with producers including oil majors on Tuesday to discuss the situation, trading sources said.
"The timing of the outage could not be much worse as winter weather is just materializing," Jefferies bank analysts wrote.
Jefferies estimated the closure resulted in production loss for BP of 105,000 bpd, for Total of 55,000 bpd, for Chevron of 45,000 bpd, for Exxon Mobil of 40,000, for Eni of 25,000 bpd, for Royal Dutch Shell of 25,000 bpd, for ConocoPhillips of 15,000 bpd.
Oil rose above $65 a barrel for the first time since mid-2015 on Tuesday after a shutdown of the UK's biggest North Sea oil pipeline, which helps set the benchmark for global prices.
The Forties pipeline, which was scheduled to pump 406,000 barrels per day (bpd) in December, was shut down on Monday after cracks were found in what traders believe is the first unplanned outage for some years.
Brent crude LCOc1, the global benchmark, was up by 92 cents at $65.61 at 1132 GMT, after breaking above $65 for the first time since June 2015 and trading as high as $65.70. US crude CLc1 rose 31 cents to $58.30.
"With no timeframe yet available as to when supplies through the Forties pipeline will resume, bulls are in control," said Ole Hansen of Saxo Bank.