• Thursday, May 23, 2024
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BusinessDay

Nigeria’s oil sales struggle as unsold cargoes pile

Higher oil price seen easing rising oil loan pressure

Nigeria’s oil industry is facing fresh challenges as a surplus of unsold crude oil cargoes accumulates offshore.

This comes amidst a wider trend of declining oil production, raising concerns about the nation’s export revenue.

According to a report by Bloomberg, traders who specialize in West African crudes report that over 30 of the nation’s cargoes are still on the market, searching for buyers.

Read also: Nigeria’s crude oil grades near $90 on Russia-Ukraine conflict

The report further indicates that at least 53 cargoes are scheduled for loading out of Nigeria in the coming month.

The majority of the shipments scheduled are substantial, each consisting of one million barrels of crude oil.

As one of the leading crude oil exporters in Africa, Nigeria’s crude cargoes, available for trading in Asia, Europe, and the US, are meticulously observed as an important aspect of the market.

According to Bloomberg, Nigeria’s crude oil sales on the global market are slowing due to several factors, such as the demand mechanism, competition from other producers, and premium pricing for supplies available immediately.

For instance, market analysts report that heavy refinery maintenance in Europe has curtailed demand for Nigerian oil, causing an accumulation of surplus barrels from April into the May trading cycle.

Read also: No clarity yet on transfer of crude oil proceeds to CBN

In addition, industry insiders noted that competitive oil producers in the Mediterranean have been reducing Nigeria’s market share.

Sales from the West African country are also struggling due to higher freight costs and premium prices for immediate supplies.

In contrast, Angola’s crude oil sales for May are relatively stable, with just five or six of the planned 34 shipments remaining unsold.

Nigeria’s crude oil has seen strong demand from Asian buyers, particularly in China and India. Additionally, the International Energy Agency’s monthly report highlighted robust demand for Angolan barrels in India.