with agency report
Lagos — Data gleaned from Refinitiv Eikon indicates that crude oil exports from Nigeria to Europe have been at the lowest levels in two years.
Europe has been Nigeria’s main crude oil export region with countries there importing more than 800,000 b/d of crude oil and condensate from Nigeria, accounting for 41% of the country’s export.
However, the available data now shows that the region now takes below 400, 000b/d since the onset of the coronavirus pandemic and the easing of the lockdown.
While volumes of cheaper US light oil hover near all-time highs, traders said with the US West Texas Intermediate firming in Europe to around $1 above dated Brent, and Nigerian grades at around the same, prices were coming into play.
Nigeria like other oil producing countries is currently battling with low demand due to coronavirus pandemic, however, demand is beginning to pick up as lockdown is being lifted.
The collapse in oil demand from the COVID-19 pandemic is hastening the reckoning for those refiners already struggling as new capacity overtakes demand, posing an existential threat to many, particularly Europe’s ageing plants.
Reuters reported on Thursday that with more cars taking to the roads as coronavirus lockdowns ease, demand for lighter, sweeter oil more suitable for refining into gasoline was ticking up.
Even at that, Brent slides to $41 on Thursday upon fears that demand would crash again after US reported the highest one-day coronavirus cases and lockdown was being re-imposed.
European refiners especially are moving away from sour varieties like Russian Urals, which have risen in price since a supply cut pact by producer countries made the grades scarcer, towards alternatives such as WTI, West African grades, CPC Blend and Azeri oil.
“Many discounted barrels from the U.S. are arriving in Northwest Europe,” one European importer of both Nigerian and U.S. oil said.
“Demand is increasing from a bottom in April, and in July and August demand should be higher,” they added.