Nearly seven months after the United
States lifted the 40-year-old ban on the exports of its crude oil,
producers in the country have made inroads into Europe, the largest
regional importer of Nigerian oil.
The US crude exports rose to a record
662,000 barrels per day in May, the highest since 1920, from 591,000bpd
in April, according to foreign trade data from the US Census Bureau.
Among the prominent destinations of the US crude oil in May were the Netherlands, Italy, the United Kingdom and Canada.
Canada, whose imports of Nigerian crude
increased by 261 per cent in the first quarter of this year, accounted
for the most US crude exports at 308,000bpd, followed by the Netherlands
at 110,000bpd and Curacao at 67,000bpd.
The Netherlands, which imported about
32.1 million barrels of Nigerian crude in the first quarter of 2015,
only bought a total of 7.8 million barrels in the same period this year,
the latest data from the Nigerian National Petroleum Corporation showed
on Friday.
The European country, which has been the
third largest buyer of Nigerian crude until recently, imported as much
as 12.9 million barrels in February last year, surpassing India and
Spain that month.
Two other European buyers of the
Nigerian crude, Britain and Italy, imported 36,000bpd and 23,000bpd,
respectively from the US in May, according to the Census Bureau.
In 2013, Nigeria lost its biggest
customer, the US, which has since then drastically reduced its imports
of Nigerian crude, following the dramatic rise in domestic shale oil
production.
The US Congress in December 2015 passed a
legislation that lifted the 40-year-old ban on the exports of the
country’s crude oil, allowing producers to sell crude to the already
saturated international market.
The Head of Energy Research, Ecobank
Capital, Mr. Dolapo Oni, in a telephone interview with our
correspondent, said, “The US producers are exporting more because they
are looking for better prices, and there are better prices in Europe.
“But for Nigeria, that means we may have
to give more discounts to be able to retain our market share in Europe
because the competition is now tightening. We are competing with the US,
which offers proximity, and, maybe to some extent, some relationships
as well.
Oni recalled that in late May, some
international refiners were worried about Nigerian crude because of
force majeure on some of the nation’s crude oil export grades, following
the resurgence of attacks on oil and gas facilities in the Niger Delta.
He said, “With the increase in the US
oil exports, some of Nigeria’s cargoes may be displaced. What the US is
exporting is also light sweet crude because shale in itself is light
crude oil.
“It is unlikely we will see a lot of the
US exports to Asia; we are likely to see more of the US exports to
Europe in the short term. But over the long term, as more volumes are
available, it is likely that we will start to see some the US exports to
Asia.”
Reuters also reported that since the
decades-long ban on the US oil exports was lifted, a number of
merchants, traders, producers and even refiners had moved crude to Latin
America, Europe, Asia and other locations.
Following the spate of production
disruptions largely caused by the recent surge in militant attacks on
oil infrastructure in the Niger Delta that have cut Nigeria’s output to
the lowest in almost three decades, exports of the commodity from the
country have taken a serious beating.
Force majeure – a legal clause that
allows the exporters to stop shipments without breaching contracts – was
declared on four of the nation’s five largest export streams –
Forcados, Qua Iboe, Bonny Light and Brass River. All but that of Qua
Iboe was as a result of militant attacks.
On Thursday, Shell lifted the force
majeure on exports of Bonny Light, Nigeria’s reference crude oil grade,
following the restoration of production into Bonny Terminal.
Two other crude oil grades – Forcados and Brass River – remain under force majeure.
Nigeria relies heavily on earning from
oil exports, and the recent production disruptions came as an additional
headache for an economy that already suffers from the sharp drop in oil
prices since 2014. THE SUN
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