Nigeria’s oil exports to Asia set to fall to 13-month low

Crude oil tanker.

Crude oil tanker.

*As NLNG raises alarm over low oil prices

Oscarline Onwuemenyi

03 September 2015, Sweetcrude, Abuja – Nigeria’s crude oil exports to Asia are set to fall to 1.68 million barrels per day (bpd) in September, their lowest since August 2014.

Nigeria, Angola and neighbouring countries are expected to export about 28 cargoes to China in September and 15 to India, down from 30 and 25 respectively last month.

Crude flows to Asia have fallen from 2.34 million bpd in April due to seasonal refinery maintenance and lower refining margins as well as fears of weakening demand growth.

Many cargoes heading to China are expected to go into storage as Chinese refiners slash output in the face of low margins.

Indian refiners are also becoming more selective in the grades of oil that they are looking to purchase, making it tougher for sellers of Nigerian crude to sell to the region.

And while exports to China have held up relatively well, many cargoes heading to China are expected to go into storage. Chinese refiners are cutting output in the face of low margins.

Meanwhile, the Nigeria Liquified Natural Gas company (NLNG) has warned in a communique that Nigeria’s tough economic realities caused by the continuous fall in global crude oil prices may worsen as the country’s other source of revenue, gas, is currently being threatened at the international market.

The communique which summarized the third NLNG commercial division external stakeholders forum that was held in Abuja recently, noted that the fall in global oil prices would continue till the end of 2015, adding that it might worsen in the coming year.

It also expressed worry over the impact which the fall in crude prices was having on its revenue, stressing that the entry of the United States and Australia into the LNG market was also “a real cause for concern.”

According to the communique, “The recent fall in crude oil prices from above $100/bbl ($100 per barrel) in early 2014 to below $60/bbl in early 2015 and its impact on global LNG/gas prices as well as the demand/supply positions in both our primary and secondary markets in the Atlantic and Pacific Basins have had a significant impact on our revenues and profitability.

“The trend which will persist till the end of 2015 and which may even worsen going into 2016 with the entry of US and Australian LNG volumes into the market is a real cause for worry.”

Nigeria has one of the largest gas reserves in the world and is the second largest supplier of LPG globally, supplying four million tons of the product per annum. In Nigeria, LPG is primarily used as cooking gas.

In addition, it noted that although these challenges were being managed, the regulatory environment had shown increasing uncertainties.

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