The United States increased its imports of Nigeria crude oil by 84.57 per cent in the five months of 2021 year-on-year.
The American country bought 17.91 million barrels per day of Nigerian crude oil between January to May 2021 this year, up from 9.71 million barrels per day in 2020, according to data obtained from the US Energy Information Agency (EIA).
This January, the US imported 4.5 million bpd of crude oil as against 1.98 million bpd imported in the same period in 2020.
The following month, Nigeria crude export to the US shrunk to 2.19 million bpd as against 2.22 million bpd in February 2020.
In March this year, US crude import from Nigeria increased to 3.83 million bpd as against 1.68 million bpd.
In April, the US imported 3.57 million bpd of Nigeria’s crude, an improvement over 1.71 million bpd in the same period in 2020.
In May this year, US crude import from Nigeria increased to 3.82 million bpd up from 2.13 million bpd in May last year.
The discovery and exploration of Shale in the US, similar to Nigeria’s light sweet crude, has over the years drastically cut Nigerian crude oil export to the US, which was once the destination for about 40 per cent to 50 per cent of the country’s cargoes.
Following the coronavirus-induced crash in oil prices and demand, Nigeria has been struggling to sell its crude oil cargoes.
Prior to the lockdowns and collapse in crude oil demand caused by the coronavirus crisis, the exploration of US shale oil was already proving challenging for Nigeria.
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The US imports of Nigerian crude fell from 148.48 million barrels in 2012 to 87.40 million barrels in 2013 on the back of shale oil boom.
In 2014, when global oil prices started to fall from a peak of $115 per barrel, Nigeria saw a further drop in US imports of its crude to 21.24 million barrels.
For the first time in decades, the US did not purchase any barrel of Nigerian crude in July and August 2014 as well as June 2015, according to the EIA data.
The EIA data showed that the country imported 75.81 million barrels of Nigerian crude in 2016, up from 19.85 million barrels in 2015.
In 2018, the US imports of Nigerian crude tumbled to 64.06 million barrels from a five-year high of 112.92 million barrels in 2017.
However, due to a rise in global price of crude oil at over $70 per barrel, Nigeria has shored up its export of the product.
Nigeria’s Oil Production Affected By Technical
Nigeria’s crude oil production output has been affected by technical and operational issues as well as pipeline vandalism.
The West African country’s crude production has only been able to produce only two-thirds of its full capacity of between 2.2 million to 2.3 million b/d of crude oil.
Crude oil production in Nigeria is estimated to be around 1.64 million b/d in 2021, according to S&P Global Platts.
Also, agreement reached with other OPEC+ members to cut production volume is also affecting Nigeria’s production performance.
Nigeria has been allowed to increase crude production quota to 1.535 million barrels per day in May, 1.554 million b/d in June, and 1.579 million b/d in July as part of the OPEC+ deal.
Some of the Nigeria’s large oil fields, especially those in the Niger Delta like Bonny, Escravos, Brass River and Qua Iboe, were said to be pumping well below their full capacity due to either technical problems or maintenance.
There are reports of a rise in leakages at some of the country’s key pipeline networks. Some of these were because of an increase in pipeline sabotage while others are because of the country’s fragile and aging infrastructure, some of which need urgent rehabilitation work.
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In April and May, there were shut-ins by some of the producers using the Nembe Creek Trunk Line to transport their production to Bonny Terminal, due to a couple of leakages on the line, according to an official from the Nigerian petroleum ministry.
US Oil production Output for 2021
The US government earlier in the year lowered its outlook for crude oil production for 2021, setting an average output of 11.02 million barrels per day for the year, with plans to bridge its consumption with import from Nigeria and other countries.
According to EIA, oil prices have rebounded from the lows touched in 2020 as Saudi Arabia pledged additional oil output cuts, prompting U.S. energy firms to increase drilling activity.
However, production is expected to remain under pressure in the short term as high levels of debt and the desire to preserve cash make oil companies reluctant to ramp up activity.
The EIA said it expects production to decline by 290,000 bpd, compared to its previous forecast for a drop of 190,000 bpd to 11.10 million bpd.
Output is expected to rise in the second half of 2021 and in 2022 as production from new wells will exceed the declines from older wells, the EIA said.
In 2022, the US government planned to increase its crude output by 510,000 bpd to 11.53 million bpd, compared with expectations for an increase of 390,000 bpd previously.
The agency lowered its expectation for demand, saying U.S. petroleum and other liquid fuel consumption will rise 1.35 million bpd to 19.43 million bpd in 2021, compared with an estimated 1.45-million bpd increase forecast in January.
