Nigeria’s crude oil is currently making waves among India refiners, as the current action by Saudi Arabia of reducing crude supply to the international market has enable Nigeria to maximise the spot oil market, where the refiners have turned their attention to.
Spot crude imports into the world’s third-largest oil market will rise by 10percent to 15percent this year from 2020, according to industry analysts. The increased purchases are coming as India’s top suppliers, including Saudi Arabia and Iraq, curtail output as part of the OPEC+ pact.
This means Nigeria has more opportunities to make more foreign earnings perhaps able to sell some spare volume of her crude oil. this would enable the government to finance some of its basic obligations such as salary payments and execute some of the pressing projects.
In the last few months, Indian refiners have boosted imports from exporters such as the United States and Nigeria as Saudi Arabia and Iraq have been limiting term supplies to customers, including customers in Asia.
Read Also: FG, crude oil theft, pipeline sabotage is getting out of hand
India, the world’s thirdlargest crude oil importer, has given more attention sourcing more and more oil in spot deals with exporters outside of the Middle East after the biggest OPEC producers have tightened global crude supply as part of the OPEC+ pact.
OPEC still accounts for most of the oil shipped to India, which depends on imports for around 80 percent of its petroleum consumption. India’s oil consumption has mostly recovered from the pandemic shock last year, and domestic refiners are looking to maximize gasoline production. With reduced supply from the Middle East, Indian refiners have increased purchases of lighter crudes such as those from the U.S. and Nigeria, which yield more gasoline. This year, India’s spot crude imports are set to increase by up to 15 percent compared to 2020.
The shift underscores how other producers are benefiting from the cuts as consumption returns in markets like India. It’s been especially good to exporters like the U.S. and Nigeria, whose crude produces more gasoline that’s in high demand as the pandemic pushes people to private cars instead of public transport.
India oil imports surged in December 2020 to their highest in almost three years, while fuel demand posted its fourth consecutive monthly rise in December to the highest since February 2020.
At the same time, Saudi Arabia is cutting its oil production by an extra 1 million barrels per day ( bpd) this month and next, while Iraq has reportedly reduced its term supplies for 2021 to several major Indian refiners by 10-20 percent.
Indian refiners are raising the share of spot purchases in their overall basket of sourcing oil supply, but the oil price rally in recent weeks is not great news for Indian buyers of oil.
Earlier this month, India’s Petroleum Minister Dharmendra Pradhan warned that higher oil prices could interfere with global economic recovery in the latest signal that one of the world’s biggest drivers of oil demand growth is unhappy with where prices are going according to Oilprice.com
