On top of the geopolitical pressures in the Middle East forcing up the price of oil, another factor sent the price of a barrel of crude up nearly 3% higher to a new record price of over 78 dollars in Europe. BP is shutting down its Prudhoe Bay oilfield in Alaska, which pumps 8% of the United States’ crude, and is the country’s biggest oilfield.
BP has discovered severe corrosion in its local pipeline network, after two recent oil spills. Analysts fear the repairs could take months. In the currently tight oil market, where supply is struggling to match booming demand, financial experts are predicting the price of a barrel could soon hit 80 dollars. BP’s woes are compounded by the fact they face legal action for a huge oil spill at Prudhoe in March, when a million litres of oil polluted the pristine Arctic wilderness. In the same month an explosion at a BP refinery in Texas killed 15 people.