Since the US crude export ban was lifted in December 2015, the competition that Nigerian crude oil cargoes have faced from US crude oil grades in Northwest Europe has begun to expand into other regions, Platts reports.
Not only has there been a gradual increase in shipments of US barrels to a major demand center for Nigerian light sweet barrels; Northwest Europe but also to other Mediterranean refiners as well. In recent weeks, this competition has also extended to the east, with India, the largest buyer of Nigerian crude, increasingly looking to the US for its crude oil buy tenders.
While the quantity of US crude being purchased by Indian firms hasn’t yet impacted Nigerian differentials, traders said that it is another form of competition for Nigerian sellers to be aware of. IOC, the country’s flagship refiner as well as other state-run refiners like Bharat Petroleum Corp. Limited (BPCL) and Hindustan Petroleum Corp. Limited (HPCL), which are all key buyers of Nigerian crude, have recently purchased US oil.
However, Mele Kyari, the general manager of state-owned Nigerian National Petroleum Corporation’s (NNPC) crude oil marketing division, has been pragmatic about the threat posed by US crude, and has said that data has shown that rising US exports have actually created opportunities for more Nigerian barrels to head to US Atlantic Coast refiners.