Lagos — Nigeria’s crude oil export is set to get a boost following outages in the North Sea.
The country’s oil export to Europe will be the highest levels in seven months in June at 905,000 barrels per day (bpd), the most since almost five-year peak of about 1 million bpd in November, according to Refinitiv Eikon data.
August exports for four main grades were set to rise 155,000 bpd from July according to preliminary programmes.
Mediterranean countries now import less crude from other West African countries such as Angola and Cameroon, according to consultancy FGE Energy.
Likewise, the possibility of a permanent shutdown to the Philadelphia Energy Solutions refinery may stand to also benefit Nigerian crude as U.S. gasoline demand rises.
Demand for Nigeria’s crude by the U.S had been on a low side since the shale boom.
Norwegian and UK offshore fields in the North Sea normally provide a steady supply of lighter crude to refineries feeding northern Europe’s major economies and are traditionally more competitive than Nigerian grades due to their proximity.
But planned maintenance on Norway’s Ekofisk oilfields this month cut exports to just one cargo from the usual 10-15. Flotta, another of the 12 North Sea fields, closed for repairs over two weeks in late May.
“Nigerian grades are normally middle-distillate-rich and with Ekofisk having undergone maintenance, Nigeria is meeting European demand for this type of crude,” said Ehsan Ul-Haq, lead analyst for oil research and forecasts at Refinitiv.
“(Europe) always tends to act as the clearinghouse at a lower value than the East,” one trader selling Nigerian crude said.
Though European gasoline margins have been middling and especially poor among southern European refiners, several factors may mesh incoming months to support Nigerian differentials, which stand near multi-year highs.
Traders said the possibility of a permanent shutdown to the fire-stricken Philadelphia Energy Solutions refinery in the city, though it was a consistent importer of Nigerian crude would increase demand for gasoline refined in Europe.
Egina, heavy sweet crude from a new offshore field, seems to be consistently popular among refiners in northwest Europe.
“Exports of the grade primarily go to Europe, specifically the Netherlands and France, which combined took around 155,000 bpd in May, or 83% of the grade’s exports,” said Mercedes McKay, an analyst at energy consultancy FGE.
Nigeria’s Qua Iboe export will also rise to 9 cargoes in August
Export of one of Nigeria’s crude grades, Qua Iboe will also witness an increase in August, up to 9 cargoes.
This is because schedules for export loading which started to be issued on Monday points to more demand from buyers.
Due to stronger demand from Northwest Europe, nine cargoes of the grade will be exported in August, up from 6 originally planned in July.
At least 20 cargoes are yet to be claimed from July schedule.
Qua Iboe for July loading was last offered at dated Brent plus $2.80 a barrel, the highest differential since mid-2014, according to Refinitiv Eikon data.