I strongly believe the recent romance with the west and USA is responsible for this action as China who happens to be Nigeria’s biggest FDI and crude oil buyers have been ignored by the Buhari lead govt.
I don’t get his romance with the USA when they have stopped buying our crude and any trade partnership with them will be to their advantage and not ours.
Nigeria has a lot to do to woo buyers following the decision of China to ignore crude from Nigeria. This is happening at a time when the country has become the biggest casualty of the rising United States shale oil production.China is the second largest consumer of crude oil, and when it does not figure at all as one of your regular buyers, you know you have a problem. And Nigerian crude is suffering because of this. China likes crude oil that is heavy and sweet, as it fits the appetite of its refineries that produce a lot of fuel oil to keep its industrial and manufacturing economy running, according to a data from the US Energy Information Administration, EIA.
The EIA noted that China also has a lot of complex and sophisticated refineries that can still produce middle distillates by distilling heavy crude oil, making the refiners much better margins.
Consequently, China ignores Nigerian crude for now, as their demand for light sweet crude oil is very sparse. It is high time Nigeria found a way to attract its crude oil to China, it noted.
In 2014, about 45 percent of Nigerian crude exports went to Europe, according to the EIA data. But the issue for Nigeria is that it is so dependent on a region where crude demand is stagnant as a lot of economies are still stumbling and it needs to find demand in countries that are growing, particularly in Asia.
Nigeria’s condition is made worse by the fact that it has become the biggest casualty of rising United States shale oil production
Until about seven years ago, the US, which remains the largest oil consumer in the world, used to buy more than 1 million barrels per day of light sweet Nigerian crude oil, which was almost 50 percent of Nigerian oil exports at the time. In 2014, only three percent of Nigerian exports went to the US, according to the same data published by the US EIA.
Nigeria lost its biggest buyer, and the reason has been attributed to the dramatic rise in US shale oil production.
US shale oil is said to be extremely similar in quality to light sweet Nigerian crude oil, and as more and more shale basins were discovered in its own backyard, the US did not need any more oil from Nigeria.
Last year, there were six weeks in a row starting from early July during which the US did not import a single barrel of crude oil. This was the first time that the US had not imported any Nigerian crude oil for such a length of a time, since US EIA started compiling this data almost four decades ago.
The shale revolution has had a profound impact on the makeup of the US import market, which has, by extension, greatly altered the direction of crude flows both within Europe and to Asia. And Nigeria has been the biggest casualty of this, it noted.
However, India has the largest buyer of Nigerian crude, which has been one of the positives for the West African country in the last few years. But demand from India for Nigerian crudes is slightly on the wane as its demand for Latin American crudes is growing sharply.
India is also the largest buyer of Venezuelan crudes, and with refineries getting more and more complex in the sub-continent, their demand for light sweet crudes is expected to tail off.
The world’s largest refinery complex situated in Jamnagar in the western state of Gujarat in India, operated by Reliance, runs primarily on heavy crudes, dominated largely by crudes from the Middle East and Latin America.