Nigeria and the United States of America may be in a silent war to control the supply of crude oil to Asia. This is because the increase in crude oil production in the U.S. appears to have translated to bad news for Nigeria.
According to trade flow data by Reuters, the US has raised the supply of crude from 280,000 to 320,000 year-on-year in June 2018. This is in addition to the move by the US to stop purchasing crude oil from Nigeria about three years ago, a move which made Nigeria look in the direction of Asia, mainly India and China, for a market for oil.
However, India and China have now increased their demand for crude from the U.S. This, again, means less crude import from Nigeria. Prior to this time, between 2015 and 2016, Nigeria had received demands of about 23.7 million metric tonnes of crude and over 2 million metric tonnes per annum of liquefied natural gas from India.
This reduction in foreign demand Nigeria’s crude has also led to an oversupply of crude within the country, and the reluctance of sellers to offer cargoes into the market. However, differentials for Nigerian crude remained unchanged on June 15, 2018.
Traders have said that these diversions of crude demand which call for a competition with the U.S. in Asia’s market share have led to the highest surpluses recorded, particularly in Nigeria, for several years.
Image Credit: Enterprise TV
