US Turns To Nigeria Again For Crude Oil

The United States has again turned to Nigeria for crude oil, forced by the slow down in shale oil daily production that has dropped to 600,000 barrels a day since peaking in 2015, as the Americans now uses imports to filled the gap.

The news look cheering going by the fact that several tons of Nigerian crude have been on the high sea searching for buyers of its crude.

According to the report, refineries along the US coasts are choosing to buy imports instead of local crude. “One of the biggest winners is Nigeria, which is regaining lost market share”.

Imports from Nigeria surged to 559,000 barrels a day in mid-March, compared with an average of 52,000 for all of 2015. The opening up of the US market was giving Nigeria a new beginning with the US in oil trade.

However, it was because the price of crude has dropped so low and no longer profitable for the US shale producers to continue in business.

A quote from the reports read, “the current price of crude has made oil recovery from shale far more expensive than imported oil”.

Perhaps, in the last few years, Angolan crude has been finding it easier to attract buying interest than the light sweet and better quality Nigerian crude, which, until a few years ago, was the preferred choice for most refiners. But it was not only due to higher prices and economics that Nigerian crude was struggling, a lot has to do with the customer base of both countries.

“Angolan crude rely on countries that are growing at a rate of 5 per cent to 8 per cent, while crude out of Nigeria rely heavily on Europe, where economies are generally on a decline.”

It must have been giving Nigeria’s oil authority a nightmare that the country’s export crude cargoes every month were grappling to attract end-users and refinery demand, and were instead been stored on ships and on storage terminals, idling away. It was said that bulk of the oversupply in the Atlantic Basin crude market was comprised more of Nigerian crude.