OPEC saw its market share in North America fall last year, with shipments to the region declining by 12.6% to just over 2.813 million b/d as US shale output helped transform the world’s largest consumer of oil into the seventh biggest exporter of crude, according to a report released by the cartel.
Nigeria has been worse hit by this action of United States of America as its crude import from Nigeria dropped significantly.
The United States cut its imports of Nigerian crude oil by 48.87 million barrels or 43 per cent in 2018, according to the data of Energy Information Administration.
The US imports of Nigerian crude fell to 64.06 million barrels last year from a five-year high of 112.92 million barrels in 2017.
The EIA data showed that the country imported 75.81 million barrels of Nigerian oil in 2016, up from 19.85 million barrels in 2015.
US imports of Nigerian crude fell from 148.48 million barrels in 2012 to 87.40 million barrels in 2013 on the back of the shale oil boom.
Light sweet Nigerian crude is very similar to the light oil produced in US shale. As US shale production has grown, the appetite for Nigerian crude in the US has dropped dramatically.
In 2014, when global oil prices started to fall from a peak of $115 per barrel, Nigeria saw a further drop in US imports of its crude to 21.24 million barrels.
For the first time in decades, the US did not purchase any barrel of Nigerian crude in July and August 2014 and June 2015, according to the EIA data.
In 2010, the US bought as much as 358.92 million barrels from Nigeria but slashed its imports to 280.08 million barrels in 2011.
With the sharp increase in its production, the US oil exports averaged 1.9 million bpd in 2018, about twice the amount that was exported in 2017, according to the EIA.
Crude oil exports from the United States to the United Kingdom overtook supplies from other countries including Nigeria for the first time since such shipments began in 2015.
According to Platts, exports to North America declined by 406,000 b/d in 2018 compared with the previous year, while the US experienced the biggest increase in crude output as production surged 17.2% over the same period to almost 11 million b/d, the 2019 OPEC Annual Statistical Bulletin showed.
“Italy and the Netherlands are the main purchasers of US crude oil in Western Europe,” said OPEC in the report. “In Asia, China, India, South Korea and Taiwan account for the biggest shares. The overall consequence is that the US has become one of the largest crude oil exporting economies on a global scale.”
The figures highlight the challenge facing OPEC in restricting output to maintain prices at economically acceptable levels without providing an incentive for US drillers to continue boosting production. The Energy Information Administration now forecasts that US oil output will surge to almost 15 million b/d by 2027.
OPEC and its allies led by Russia have repeatedly come under pressure from US President Donald Trump to ease their production curbs and clamp down oil prices in the wake of sanctions on Iran.
However, prices have been hit recently by fears of a widening trade dispute between China and the US hitting global growth.
Brent crude prices have dropped by almost a quarter from their 2018 highs and were trading at $61.37/b on Monday after the US’ latest threat of trade tariffs against Mexico and persisting concerns over its worsening economic relationship with China.
OPEC is due to meet in the coming weeks to agree on whether to extend output restrictions of 1.2 million b/d despite the risk of supporting US producers by sacrificing more market share. Saudi oil minister Khalid al-Falih told local media on Monday that OPEC remained focused on maintaining “market stability beyond June.”
The group’s total output declined by 1.3% last year, or 415,000 b/d, with Asia its largest regional export market, according to the report.
Some view the Trump administration’s push to expand offshore oil and gas drilling to most federal waters as a failure. But with plans for oil and gas lease sales for the Atlantic and Arctic on an indefinite hold, amid court battles and leadership changes, the industry continues to push for access to the Norphlet play in the eastern Gulf.
Much of the deepwater play is under a federal moratorium until 2022 and leases there will be highly sought after when that expires. But drilling in the eastern Gulf is fiercely opposed by Florida lawmakers and a compromise has proved difficult.
