Oil markets were braced on Monday for the impact of the loss of up to 15% of U.S. crude after a pipeline leak forced BP ( BP), the U.K.-based oil company, to shut down 95% of production from North America's biggest field.

The development, at the Trans-Alaska Pipeline System that carries oil from the Prudhoe Bay field, comes as BP is still grappling with the fallout from the oil spill in the Gulf of Mexico. A prolonged shutdown would cut into BP's output and could undermine earnings.

BP owns 46.93% of Alyeska Pipeline Service Co., a consortium that owns the pipeline. ConocoPhillips ( COP) owns 28.29%; ExxonMobil ( XOM) 20.34%; Chevron ( CVX) 1.36%; and Koch Alaska Pipeline 3.08%..

Prudhoe Bay is jointly owned by BP, with 26%; ConocoPhillips, with 36%; ExxonMobil, with 36%; and others with 2%. BP is the operator of the field.

The leak is in the Trans-Alaska Pipeline System, which carries 14% to 15% of U.S. crude oil production 800 miles to Valdez, where it is shipped out in tankers. It is the only line carrying oil to market from Prudhoe Bay.

The oil market is better supplied than in 2006, when BP was last forced to significantly reduce production amid the discovery of pipeline corrosion at Prudhoe Bay. At that time, oil prices jumped.

The cause of the leak is being investigated by state and federal regulators, as well as the company itself, but if it is not fixed within a few days the incident could put upward pressure on oil prices once more.

U.S.-traded oil was up 1% to $88.94 a barrel in Monday trading.

BP said it was working to shut down production, taking precautions to prevent the lines from freezing.

Alyeska, which is also the pipeline's operator, said the leaked oil was discovered in the basement of a pump room. It said the leak was in piping encased in concrete and had to be excavated before it could be repaired.

The company added that it was considering a variety of options to restart the line as quickly as possible, including bypassing that section of piping.

A person involved in the situation said that the leak had not spilled out on to the tundra and would probably be fixed within the week.

The pipeline carried an average of 642,261 barrels per day in December, higher than the monthly average last year of 620,000 barrels.

The Marine Terminal at Valdez has 18 storage tanks, with total capacity of more than 9 million barrels. But only 14 of those tanks are in operation. On Sunday morning, Alyeska said they still held 35% of their inventory, or about 2.5 million barrels of oil. There is no significant storage on site to make up for a prolonged outage.

In August 2006, BP had said it would shut the entire field after corrosion data and a leak indicated its pipelines were corroded. That information followed the biggest-ever leak at Prudhoe Bay in March of that year. In the end, it was only forced to shut half the field.