From a low of 1.3M b/d in March, Nigerian crude oil production has gradually improved in each subsequent month to reach an estimated 1.8M b/d in September which along with exemptions from the initial OPEC-led deal to curb production, has also led to a surge of VLCCs and Suezmaxes into the region, Tanker Shipping reports.
Despite being exempt from the initial OPEC-led deal to curb production from 1 January 2017, and despite having produced around 2.2M b/d as recently as 2012, Nigeria has indicated that it is prepared to cap its production at 1.8M b/d, suggesting that Nigerian output has peaked for now. Although Nigerian output growth may have reached its ceiling this year, Nigeria remains an important lure for tanker owners who see it as part of the buoyant Atlantic Basin crude oil export market, also led by the United States, Libya, Canada and Brazil.
This region is currently regarded as the best trading option for large tanker owners because of the disproportionally negative impact on cargoes out of the Arabian Gulf due to the OPEC-led deal to cut output (Nigeria is currently exempted from this deal). Data for Q3 showed that India was Nigeria’s top export destination with 25% market share. The next largest destinations were southern Europe (20%), North America (13%) and northern Europe (12%), while the combined grouping of northeast Asia, southeast Asia and Australasia accounted for a further 14%.