Nigeria Faces Struggle to Find Oil Buyers Amid Demand Drop in Europe

In recent developments, Nigeria is facing challenges in securing buyers for its crude oil as demand from Europe continues to wane. The situation has been exacerbated by strikes in the French refining sector and seasonal maintenance at plants across Europe, leading to decreased sales from the West African country.

According to reports from Bloomberg, 20 to 25 shipments of Nigerian crude oil set for April loading are still without buyers. This is a significant departure from the usual state of affairs for this time of year, as the market typically transitions to trading May’s barrels.

Each of these unsold cargoes amounts to around one million barrels of crude oil, indicating a substantial shortfall in demand. France, one of Nigeria’s largest oil purchasers, has seen its imports fall due to nationwide strikes related to pension reforms. This disruption has caused a sharp decline in France’s demand for Nigerian oil.

Additionally, about 80% of France’s refining capacity has been shut down or is in the process of being suspended due to industrial action. This, in combination with maintenance work at other refineries across Europe, has further decreased the demand for Nigerian oil.

European refiners have been turning to alternative sources such as North African oil, which ships more quickly to the region, or US West Texas Intermediate crude, which has been arriving in larger volumes. Long-haul buyers like Indian Oil Corp. and Indonesia’s Pertamina have also been purchasing more discounted Russian oil, reducing their need for Nigerian crude.

These factors, combined with Nigeria’s resumption of crude production, which had been affected by theft and technical issues, such as the Bonny Light stream, have led to an oversupply of Nigerian crude oil with limited avenues for sale. The situation poses a challenge for Nigeria’s oil industry as it navigates this period of demand shortfall.