The one million barrel per day Baku-Tbilisi-Ceyhan (BTC) pipeline could be out as long as 5-weeks with two weeks the minimum recovery time. This has the potential to cause a 35 billion barrel drop in supplies if it takes the full five weeks to repair.
BP is the majority owner of the pipeline at 30.1% and as the operator could suffer a major loss by the removal of that oil from their revenue. BP said some of the oil is being rerouted to other outlets but this is a major source of pain for BP. The pipeline was attacked by the Kurdistan Workers Party or the PKK and officials claim a 6-kilometer section of the pipeline is still burning. Repairs and tests could take weeks before the pipeline can reopen.
The six world powers, the five permanent members of the UN Security Council and Germany agreed to consider new sanctions on Iran after Iran gave the council an ambiguous answer to their latest demands to halt uranium enrichment. However, the Russian envoy claimed no knowledge of such an agreement and China had no immediate reaction to the news. The top diplomats from the six countries spoke by conference call and agreed they had no choice but to act on the defiance by Iran. The committee called Iran's response a stalling tactic and the committee agreed to meet to decide what sanctions to impose next month. The next round of sanctions would probably be voted on during the next general session from Sept-23rd to Oct-1st. So, it appears Iran bought at least a month to 8 to 12 weeks by playing dumb in their response.
Shell said the force majeure was still in effect in Nigeria and the 150,000 bpd pipeline attacked two weeks ago is still not back in operation. Repairs are still underway and it is unclear how much longer the repairs will take.
Norway's oil exports are expected to cease by 2030 after peaking in 2001. Production at Norway's largest fields dropped by 13% last year while output at some smaller fields fell by 40% and expected to accelerate. Production peaked at 3.6 million barrels per day in 2001 and has declined sharply ever since.
Crude prices rose to $121.75 intraday before plunging at the close and are trading at $118.50 at 4:AM Friday morning.