More Worries As Nigeria Struggles To Get Buyers for Crude Oil, Russia Attracts 2 Major Customers
- Nigeria is still struggling to find buyers for its oil despite having one of the best grades among oil-producing countries
- Checks show that there are as many as 30 cargoes of Nigerian crude oil abandoned due to a lack of buyers at a time when oil is rising close to $100 per barrel
- Russia continues to attract Nigeria's major crude oil customers, and it is becoming a cause for concern
PAY ATTENTION: Unlock the best of Legit.ng on Pinterest! Subscribe now and get your daily inspiration!
Dave Ibemere is a senior editor with over 10 years of experience covering business and economy
Nigeria's problems continue to compound as the largest oil exporter in Africa is reportedly struggling to get buyers for crude oil for November exports.
According to a report from Reuters, as many as 30 oil cargoes are dumped over sluggish demand in the international market.
Source: Getty Images
Nigerian struggles come when oil prices are at the highest level in recent months, earning $100 per barrel, and the country's crude oil production has improved.
PAY ATTENTION: Сheck out news that is picked exactly for YOU ➡️ find the “Recommended for you” block on the home page and enjoy!
Punch reports that as of Tuesday, October 24, 2023, between 20 and 30 crude cargoes were without buyers, far more than was typically expected to be left over at this stage of the trading cycle.
A source quoted said:
"The market is “very, very sluggish”
Another added:
“The market is going down, margins look bad."
Nigeria's crude oil prices
More details showed that some of Nigeria's crude grade, such as Bonga crude, was offered at a premium of $9 a barrel to the benchmark dated Brent, while Escravos and Forcados were on offer over $8 in October; however, the report said freight rates have since jumped, and refiners' profit margins have narrowed, which is affecting demand.
Data obtained from oil prices showed that on Thursday, October 26 afternoon, Brent Crude was trading at 88.73 per barrel.
While Nigeria's Bonny Light is selling at 90.19 dollars per barrel.
Russia attracts Nigeria 2 biggest customers
Meanwhile, Nigeria continue to lose two of its biggest customers to Russia, a trend that started in 2022.
Data from the National Bureau of Statistics showed that at the end of the second quarter (June 2023), Nigeria's two biggest customers, India and China, were no longer among the top 10.
In the first quarter of 2023, India bought N327.85 billion worth of crude oil from Nigeria, while in the second quarter, nothing was recorded as it was not among the top 10.
Looking back at the second quarter ending in June 2022, India ranked as the number one destination for Nigeria's crude, with over N1 trillion bought.
Similarly, China, a consistent customer, seems to have shifted its market.
In recent months, India and China have bought more from Russia, selling its crude cheaply.
Reuters reports that India has become the top buyer of seaborne Russian oil.
NNPCL shuns Dangote refinery, swaps crude oil for loan with Others
Legit.ng reported that a Nigerian National Petroleum Company Limited (NNPCL) source stated that the company signed simple oil contracts with several entities.
The development prevented the company from initially meeting Dangote's demand.
The Executive Director of Dangote Group, Devakumar Edwin, claimed in a Monday interview with S&P Global Commodity Insights that the NNPCL had committed its crude to other organizations.
Source: Legit.ng
