You can find our earlier post on EEZ here
Wikipedia defines an Exclusive Economic Zone as:-
An exclusive economic zone (EEZ) is a sea zone prescribed by the United Nations Convention on the Law of the Sea over which a state has special rights regarding the exploration and use of marine resources, including energy production from water and wind. It stretches from the baseline out to 200 nautical miles (nmi) from its coast. In colloquial usage, the term may include the continental shelf. The term does not include either the territorial sea or the continental shelf beyond the 200 nmi limit. The difference between the territorial sea and the exclusive economic zone is that the first confers full sovereignty over the waters, whereas the second is merely a “sovereign right” which refers to the coastal state’s rights below the surface of the sea. The surface waters, as can be seen in the map, are international waters.
The United Nations Convention on the Law of the Sea (UNCLOS) does not define the exact method that must be used when defining a nations EEZ in the case of another nation having a claim within the 200Nmi limit of another nation. Rather it calls for both nations to agree an equitable division of the area.
One of the methods commonly, but not exclusively used to define an equitable division of an area is the principal of the median line. The median line is the line which is half way from one nations coast to the next. When the UK, Norway, and Faroe negotiated their respective borders the median line was the starting point for negotiation, and the final borders are very close (if not exactly) defined by the median line.
A great tool for examining countries EEZ can be found at http://www.seaaroundus.org/data/#/eez Note that all British Overseas Territories Such as Saint Helina, Tristan Da Cunha, South Georgia, Pitcairn, Bermuda etc. all have the full 200Nmi unless they are within 400Nmi of a neighbouring territory. As a British Overseas Teritory Shetland will have it’s own Government, but will retain the queen as head of state, The levels of autonomy of BOT’s vary, smaller islands with small populations tend to be run by a Governor, while islands such as Bermuda, Falklands, and The Turks and Caicos Islands, have their own governments and if a governor is appointed his duties are mostly ceremonial.
We have seen that in the north sea, the EEZ borders are mostly based on the equidistant principal. We have also seen that British Overseas Territories are entitled to their own EEZ. These two points are plain facts, there can be no debate about them. It therefore follows that if Shetland was to become a British overseas territory it would be entitled to its own EEZ, and the starting point for defining that EEZ would be the equidistant principal.
If we assume the equidistant principal stands then the EEZ that Shetland could claim is shown below.
Under the provisions of UNCLOS it is a requirement for both parties to agree to the border between their respective EEZ, if the parties can not agree then arbitration may be required. Of course the position of Fair Isle has a significant impact on the border with the rest of the UK and it could be argued that it has a disproportionate impact on the border but, the legal principal has been set around Shetland with the borders to Faroe and Norway.