- US Increases Imports of Nigerian Oil by 287%
The United States almost tripled the volume of crude oil bought from Nigeria last year, seven years after it began to depend less on the country’s crude as shale oil production surged.
The latest data from the US Energy Information Administration seen by our correspondent on Friday showed that the country imported 76.9 million barrels of Nigerian oil in 2016, up from 19.9 million barrels in 2015.
In 2014, when global oil prices started to fall from a peak of $115 per barrel, Nigeria saw a further drop in the US imports of its crude from 87.4 million barrels in 2013 to a record low of 21.2 million barrels.
For the first time in decades, the US did not purchase any barrel of Nigerian crude in July and August 2014, according to the EIA data.
In 2010, the US bought as much as 358.9 million barrels from Nigeria, but slashed its imports to 280.1 million barrels and 148.5 million barrels in 2011 and 2012, respectively.
But the recent increase in the US imports of Nigerian crude is being threatened as shale oil production gathers fresh momentum on the back of the rally in global oil prices.
The US shale production for March is expected to rise by the most in five months as energy companies ramp up drilling, with the EIA forecasting that production in seven major regions will rise by a total of 80,000 bpd to 4.87 million bpd.
Global oil benchmark, Brent crude, has been trading above $50 per barrel in recent months, up from a record of low of $27 per barrel in January 2016.
Industry analysts said the rising shale oil production in the US could upend efforts by major producers including the Organisation of Petroleum Exporting Countries to bring global supply and demand for crude back into balance.
The Head of Energy Research, Ecobank Group, Mr. Dolapo Oni, said the higher oil prices could potentially make it attractive for the US oil exports to reach markets as far as Asia.
He said this could potentially create a challenge for Nigerian crude grades, resulting in a similar cut in prices across grades such as had to be done in 2016.
“While the country managed to export an average of 200,000 barrels per day to the US in 2016 due to decline in shale production, resurgence in shale production as oil prices rise and stay above $50 could see our exports to the US also shrink,” Oni added.
The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, had on Wednesday said Nigeria and other OPEC members must lower production costs to compete better with shale oil producers.
OPEC members along with 11 non-OPEC countries had on November 30 agreed to cut their oil production for the first half of 2017, although Nigeria and Libya were exempted due to production setbacks they suffered last year.
India had in 2013 emerged as the single largest importer of crude oil from Nigeria after significant drop in the US imports amid the shale oil boom.
From 2004 to 2007, Nigeria exported over one million bpd to the US, but a surge of the US domestic production that was of similar quality, including shale oil, later forced African light sweet crude producers, especially Nigeria, to find new destinations for their exports.
