Nigeria’s quest for new markets for crude oil yielding result

As United States’ import of Nigerian crude oil continues its downward trajectory, Nigeria appears to be taking no prisoners in its bid to find new markets for its crude oil.

Last week, it emerged that Argentina had ordered for Nigerian crude oil cargo, which will be delivered in the second week of May at the country’s Bahia Blanca Port.

Argentina’s state-run oil company YPF awarded a tender to buy a 1 million-barrel cargo of Nigerian Bonny Light crude to trading firm Vitol, according to Reuters. This marks the first time the South American country, which produces 700,000 barrels per day (bpd) of oil according to the US Energy Information Administration, has agreed to buy Nigerian crude since it lifted restrictions on crude imports in January.

Traders expect the state-run company to keep buying light crudes to combine with local output of heavy and medium grades, as the government had taken the measure to buy cheaper crudes instead of importing more expensive finished fuels.

Nigeria’s Bonny Light is sweet crude with a density of 35 API degrees, produced by several foreign companies at the Niger Delta basin, including US oil company Chevron Corporation and Anglo-Dutch Shell.

In March, Taiwan’s crude-oil imports was said to have risen sharply in January as the country added Nigeria as a new supplier. The country bought 947,000 barrels from Nigeria, according to Taiwan’s Bureau of Energy.

Industry analysts have continued to stress the need for Nigeria, Africa’s top oil producer, to push ahead with efforts to find new markets to cushion the impact of the continued decline in US imports.

“Nigeria needs to be committed to finding new markets and processing most of its crude domestically to meet the nation’s growing demand for refined products. Nigeria has already shifted attention to Asian buyers especially China and India, which has become the largest importer of Nigerian crude,” Claire Lawrie, head of oil and gas advisory, Ernst & Young had said.

As US imports of Nigerian oil decreased over the past few years, European imports increased, the Energy Information Administration said. Nigeria is already the 4th supplier of oil to Europe. 

 Europe, which is the largest regional importer of Nigerian oil, imported 889,000 barrels per day of crude oil and condensate from Nigeria, accounting for 44 percent of total Nigerian exports in 2012.

In 2013, India emerged as the single largest importer of crude oil from Nigeria after significant drop in US imports from the country as production from shale resources in the US continued to surge.

FEMI ASU