There are indications that Nigeria’s oil sales may be going through difficult times following the Donald Trump’s new strategy to enthrone USA’s dominance in the global oil market.
Both Nigeria and the United States are big producers of same light, sweet oil grades that are ideal for refining into gasoline.
But according to IHS Markit, a London based oil industry information company, though Europe has imported around 46 per cent of Nigeria’s oil since the beginning of 2019, India nearly 18 percent, and the rest of Asia about another 10 percent, the Nigerian product is facing strong completion from the USA.
“They’re facing bigger competition from the U.S., and in the last few weeks, U.S. exports have really picked up,” one major buyer of Nigerian crude told Reuters.
He said further, “As many as 40 cargoes for export in August were still in need of buyers when Nigeria began publishing its preliminary programme for September exports beginning on July 18. It was the largest oversupply so far in 2019, with about 25 cargoes as the monthly norm.
“Though the excess has begun to clear, in part due to energy majors absorbing much of the excess into their own refining systems, the discounts sellers made to attract interest has lowered price expectations for Nigerian exports for September.
“They’ve got a big volume still remaining, and though the number of cargoes left for August is in the single digits, it seems to be taking longer and longer to clear lately. It’s not a pretty picture,” the crude buyer said.
According to Reuters, the development, illustrate how the US President Donald Trump’s strategy for “energy dominance” is reshaping oil markets worldwide, as the US oil exports surged 260,000 barrels per day in June to a monthly record of 3.16 million bpd.
The US Energy Information Administration has stated that crude from Nigeria has largely been pushed out of the US market in the last decade due to booming domestic output. Exports to the United States slid to zero for three weeks in July.
However, shale oil from the US Permian basin is pouring ever more into traditional strongholds for Nigerian oil in Western Europe, India and Indonesia.