Shell Plc and Eni SpA have both declared force majeure on critical Nigerian oil shipments, threatening to disrupt supplies in a market already concerned over Russia’s invasion of Ukraine.
This development comes after Shell’s measure, which pertains to its Bonny export program, has been in effect since March 3.
While Eni’s is around Brass crude cargoes and comes after a pipeline explosion in Bayelsa state.
Force majeure is a legal provision that permits businesses to avoid contractual obligations due to circumstances beyond their control.
Read also: Brass terminal blast reduces Nigeria’s oil production by 25,000 barrels per day
For Nigeria, the lost cargoes might be considerable. According to loading plans, the country was set to export about 1.5 million barrels per day this month.
According to loading programs reviewed by Bloomberg, shipments of the two grades had been anticipated at a rate of 170,000 barrels per day next month, but have been on the slide for the past few years.
A declaration of force majeure does not always imply that the entire supply chain will be disrupted for an extended length of time.
Cargoes that had been stored may still be shipped, and repairs would allow for resumption of shipments.
The market is keeping a careful eye on Russian oil supplies in the aftermath of the country’s invasion of Ukraine.
Some oil corporations have ceased purchasing fresh cargoes from Moscow, and some governments have announced prohibitions on Russian petroleum imports. Shell has stated that it will look for barrels elsewhere.
The start of Eni’s force majeure remained unclear. The company said that Nigeria LNG is also affected by its measure.
