• Wednesday, May 22, 2024
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BusinessDay

Declining US import: Nigeria, Angola take crude battle to Asian turf

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United States, for the first time, imported no Nigerian barrels of crude oil in July 2014, despite its overall crude imports rising by 569,000 barrels per day in the same month to 7.623 million b/d according to the Energy Information Administration (EIA).

US imports of light, sweet West African crudes especially from Nigeria and Angola has shown a sharp decline over the past few years, thanks to its burgeoning domestic tight oil production, market attention has turned to see which countries accommodate the backed-out barrels. The drop in US imports of West African crudes presents an even bigger contrast with 2008, when it imported an average of around 1.42 million b/d of Nigerian and Angolan crudes.

US imports of Nigerian crude plummeted to an average 73,000 b/d in the first seven months of 2014, according to data from the Energy Information Administration, compared with a full-year 2013 average of 239,000 b/d, a decline of nearly 70 percent.

Angolan crudes landing on US shores slumped to an average 119,000 b/d over January-July. The average imports for all of 2013, were around 201,000 b/d, pointing to a relatively smaller decline of around 41 percent.

Nigerian crude production over the periods in focus has remained constant, with January-August 2014 averaging 1.95 million b/d while Angolan output slipped to about 1.66 million b/d over January-August, from 1.76 million b/d in 2013.

Battle shifts to Asia

Asia’s four largest oil consumers; China, India, Japan and South Korea have collectively bought around 42 percent more Nigerian crude so far this year compared with 2013, but have shown a declining appetite for barrels from fellow African producer Angola.

For Angola, China, India, South Korea and Japan together took 2 percent less crude in the first eight months of this year compared with the same period of 2013.

India dominates the Nigerian market, and has ramped up its intake of crudes from Nigeria while China is the biggest buyer of the relatively more acidic Angolan crudes. India ratcheted up its imports of Nigerian grades over January-August 2014 by 37 percent from a year ago to an average of just under 367,000 b/d. The predominant buyers are seen to be the state-owned refiners Indian Oil and Bharat Petroleum with Qua Iboe and Bonny Light the grades of choice. Indian imports of Angolan crudes, on the other hand, fell 18 percent year on year over the same period to an average of just under 120,000 b/d.

China’s imports of Angolan crude ticked up by just 1 percent year on year to around 810,000 b/d over January-August. In contrast, Chinese imports of Nigerian crude, though relatively much smaller by volume, jumped 105% year on year to around 41,000 b/d over January-August.

Chinese crude imports, on the other hand, climbed by 8.4 percent over the same period to an average 6.06 million b/d, though a lot of the purchases have been flowing into the country’s newly built strategic storages.

The regular Chinese buyers of Angolan crudes are Unipec, Sinopec, CNOOC, ChemChina and Chinaoil and their purchases span a range of grades including Cabinda, Kissanje, Nemba, Plutonio, Saturno, Saxi Batuque, Dalia, Hungo, Girassol, Mondo, Gimboa, Palanca, and Pazflor.

Japanese imports of Nigerian and Angolan crudes are few and far between. The country imported Nigerian and Angolan cargoes in January this year, but none after that until August. Averaged out over the eight months, Japan’s Nigerian crude imports were about 4,208 b/d, up 8 percent from 3,913 b/d in the same period of last year. Its Angolan imports, however, nearly halved to 4,078 b/d over the January-August period from 7,815 b/d a year ago.

Japanese refiners take the bulk of their crude from the Middle East and Russia. In Africa, their biggest supplier is Gabon.

South Korea’s overall imports from Africa were up more than four-fold in the first eight months of this year to an average of around 66,848 b/d, with the major gainers being Equatorial Guinea, Libya, Congo, Gabon, Algeria and Nigeria.

South Korean refiners collectively bought about 419,000 barrels of Nigerian crude over January-August, a paltry average of 1,724 b/d, compared with none in the corresponding period of 2013. They bought no Angolan barrels in the eight months just as in last year.

Angolan crudes, though, have found some new buyers of late in Asia with the emergence of Taiwan’s Formosa, Malaysia’s Petronas and Japan’s TonenGeneral as active players, several of them buying Angolan grades in recent weeks. However, these are all relatively smaller crude importers.

Frank Uzuegbunam