UK Brent terminal Sullom Voe faces tug boat disruption from July 5

The UK's Sullom Voe oil terminal, loading point for Brent and Clair crude, faces disruption from July 5 as tug boat workers implement an overtime ban in a dispute with the authorities in the remote Shetland Islands, trade union Unite said June 22.

The impact on loadings was not immediately clear. Employer the Shetland Islands Council told Platts it considered negotiations were still ongoing, while Unite said the dispute could escalate to a full-blown strike if a settlement is not reached.

Sullom Voe is the loading point for Brent branded North Sea crude, typically the smallest contributor to the basket of crudes that make up S&P Global Platts Dated Brent benchmark, used in oil trading around the world. The terminal also loads heavier crude brand Clair, produced by BP in the West of Shetland area.

Tug boat workers are protesting at not being eligible for a financial long-service award paid to other council workers, equivalent to a month's salary, as they are employed under "protected terms" dating from before 2006, when different employment arrangements were in place.

"Unite has confirmed that, if no progress takes place in the coming weeks, then strike action remains a possibility, which would represent a major escalation in the dispute. The overtime ban will hugely disrupt" loading, Unite said. "The towage workers have been told by Shetland Islands Council that they will not receive the long service award if they fulfill 25 years' service...like other council workers."

Unite industrial officer John Clark added: "The towage workers are asking for equal treatment, which for 15 years has been denied to them... Unless the council accepts liability, then industrial action will commence on July 5, initially for seven weeks. We also have a mandate to take strike action, which will be an inevitable course if the council doesn't sense."

Shetland Islands Council Chief Executive Maggie Sandison expressed disappointment at the escalation and said further negotiations were expected June 25, in a statement to Platts.

"We remain committed to welcoming our towage staff into the council's standard terms & conditions of employment and resolving this dispute. The towage staff are currently on a package of protected terms & conditions... and therefore we are unable to award one council benefit in isolation," she added.

"It is our view that negotiations are ongoing and the next meeting is scheduled for this Friday, 25th June," Sandison said.

Brent branded crude is made up of oil from numerous east of Shetland fields, although the Brent field itself, which gave its name to the benchmark, now produces just a few hundred barrels a day.

Brent loadings have been in steady decline and are typically well below 100,000 b/d, with the June schedule indicating loadings of 80,000 b/d before a drop-off in July due to maintenance. Platts over the years has added additional UK and Norwegian grades to the basket of crudes used in its Dated Brent assessments.