Scapa Flow oil transfers expected to rise amid Iran conflict

War in the Middle East could result in more lucrative ship-to-ship transfers taking place in Scapa Flow.

So heard councillors at a meeting of Orkney Islands Council (OIC) harbour sub-committee this Tuesday.

Members were told that a projected rise in cruise traffic at Hatston and ship-to-ship transfers in Scapa Flow is expected to swell School Place coffers over the coming year.

The liner activity largely accounts for an anticipated increase of nearly half-a-million pounds in harbour dues in 2026/27.

The war in the Middle East is meanwhile expected to lead to an increase in transfers of crude oil and liquefied natural gas in Scapa Flow.

On the debit side, a large hike in loan charges and maintenance and repairs is set to limit the surpluses in OIC’s balance sheet. 

Enterprise and resources director Gareth Waterson presented the figures at Tuesday’s meeting of the harbour authority sub committee.

He said the main increase in the miscellaneous ports and harbour account is expected to come from the dues from cruise liners.

One reason for the anticipated jump of £494,900 from the 2025/26 total is that few liners berthed during the week of the Island Games in June.

Mr Waterson said the Scapa Flow Oil Port account covers the berthing of tankers and the ship-to-ship activity.

Officials are budgeting for the base to attract 12 tankers over the coming year. That is the same as 2025/26 but a rise in dues will generate £5.7 million, an extra £136,000.

They project ship-to-ship transfers to increase from 40 to 45, boosting revenue from £1.36 million to £1.5 million.

“It’s pretty much steady as you go,” Mr Waterson.

But he added: “The ship-to-ship transfers is probably the biggest unknown with world events at the moment.

“It’s possible there will be a few more as recently we’ve seen a slight increase in activity there.

“It’s possibly a positive for us in what is not a good worldwide situation.”

The Scapa account is projected to show a surplus of £268,100, down from £353,900 in 2025/26.

The miscellaneous account is indicating a surplus of £1,240,300,compared to £2,214,800 for 2025/26.

Councillor Ivan Taylor was keen to know why the bottom line had dipped in both accounts despite the anticipated increase in dues.

Mr Waterson said it is largely down to the rise in the maintenance and repairs programme to £2.9 million and the £1.45 million increase in  loan charges in the pipeline.

He said slippage in the revenue and capital programme from the previous year can add to the costs of projects through inflation and other costs..

On the other side of the coin, OIC gains interest from the funds not being spent. Members heard there is now £7 million sitting in the harbour authority’s reserves.