India, China cut crude oil imports from Nigeria
Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke India, which recently replaced the United States as Nigeria’s biggest...
https://newshelmng.blogspot.com/2015/04/india-china-cut-crude-oil-imports-from.html
India,
which recently replaced the United States as Nigeria’s biggest oil
market, cut its import of the country’s crude by 38 per cent in
December, while China did not import a barrel from the country in the
period, data obtained from the Nigerian National Petroleum Corporation
revealed.
India’s import of Nigerian crude tumbled
to 5.2 million barrels in December, from 13.7 million in October and
12.4 million in November 2014.
China, which bought 1.9 million barrels
of Nigerian crude in October, reduced its import from the country by
50.3 per cent to 946,913 barrels in November.
With the decline in imports from India
and China, the share of the Asian region in Nigeria’s crude oil export
dropped to 20 per cent in December from 30 per cent in October and 27
per cent in November.
The Asian region, which is the major target market for many oil exporters, is a key market for Nigeria.
Total export from Nigeria in the month of
October stood at 65.9 million, down from 67.1 million barrels in
September and 70 million barrels in August, according to the NNPC data.
“Four regions namely, Europe, Asia and
Far East, South America and Africa remain the major destinations of
Nigerian crude and condensate export,” the NNPC said.
Europe continued to be the largest
regional importer of Nigerian oil as its imported 31.4 million barrels
in December, up from 23.6 million barrels in October.
The Head of Energy Research, Ecobank
Capital, Mr. Dolapo Oni, told our correspondent that the decline in
imports from the country’s top importers – India and China – was
expected, adding that it became cheaper to buy oil from several other
countries, especially from Central and South America.
“There was a lot of substitution between
cargoes from West Africa and from these regions. Furthermore, Saudi
Arabia raised oil output from 9.6 million barrels per day to 10 million
bpd within the last quarter of 2014 to compensate for the fall in
Libya’s oil output.
“The proximity to Asia means the extra
barrels were pushed into Asia at lower prices. Saudi Arabia cut its
official selling price to Asia in October and November but raised it
slightly in December.”
Not only has the United States
drastically reduced its import of Nigerian crude as a result of its
increasing shale oil production, the country is gearing up to export its
crude oil, with Asia being a key target destination.
After months of pressure over the ban on
exports of most domestic crude in the US, the President Barack Obama
administration in January took steps that were expected to unleash a
wave of ultra-light shale oil known as condensate onto global markets.
The US imports of Nigerian crude oil
tumbled by 75 per cent last year to 21.51 million barrels, the lowest
since the country started importing from Nigeria, the US Energy
Information Administration said.
The country, which traditionally had been
the largest importer of Nigerian oil until the last few years, changed
to the 10th largest in 2014.
In July last year, the US imports of Nigerian crude fell to zero for the first time on record, according to data from the EIA.
Analysts at Ecobank had recently raised
concerns that the continued oversupply in the global oil market and the
weak global economic picture could constrain oil demand.
“Thus, Nigeria could see a major
reduction in oil revenues in 2015 compared to 2014 due to the much lower
average oil price anticipated in the year. The country already faces
considerable difficulties in selling its crude oil cargoes with a
persistent overhang for its crude oil cargoes since December 2014,” they
said.
The Ecobank analysts said the NNPC had offered further discounts to push sales but increasingly faced lower price differentials.
They noted, “This is expected to redirect
government attention to other revenue sources as it seeks to fill the
gap in its revenue profile. Receipts from crude oil sales have
traditionally provided over 67 per cent of government revenue.
“The lower oil price environment could
also sustain the downward trend in the country’s foreign reserves and
exchange rate, which are dependent on the foreign currency earned by
crude oil sales.”
Crude oil exports account for over 90 per cent of the country’s exports and remain the key source of foreign currency.