At least 20 ships with Nigeria’s crude oil are reportedly stranded in the international market as the country finds it difficult to get buyers for the product as strikes at refineries in France and maintenance in other foreign countries including Spain, India, the US and Ivory Coast reduced demands of crude oil.
According to a Bloomberg report, the situation is similar to 10 days ago when 20 to 25 shipments with about 1 million barrels of oil each were in the market looking for buyers.
Oil market experts have said that sellers have few options for the oil glut as cargo holders could resell their supplies at discounted costs or hold the volumes in floating storage until refinery strikes are over.
Reports showed that the Organisation of Petroleum Exporting Countries (OPEC) cut about one million barrels in new inflation risk. It was reported that OPEC made a shock million-barrel cut in new inflation risk after announcing a surprise oil production cut of over one million barrels per day, abandoning previous promises that it would hold steady supply. This is said to be posing a threat to the global economy.
It was noted that the cut is a significant reduction for the market, which has faced price fluctuations. Meanwhile, oil fortunes skyrocketed to as much as 8% in New York on Monday, as gasoline gained in price, putting further inflationary pressures which could force interest rate hikes by central banks.
This comes as Spain has become a top destination for Nigeria's crude oil.
Recall that in the Second Quarter (Q2) of 2022, Spain was named the biggest buyer of Nigerian crude oil, while India, France, Netherlands, Indonesia, and the UN competed as the top five buyers of Nigerian crude.
The National Bureau of Statistics (NBS) in its foreign trade report said that other top sources are South Africa, Ivory Coast, Portugal, and Italy. Reports say Spain bought N580.2 billion of crude oil between July and August in Nigeria. India bought crude oil valued at N559 billion. Nigeria sold about N413.83 billion of crude oil to France, Netherlands bought N396.51 billion.
Also, Indonesia bought N406 billion of oil from Nigeria, and the US purchased about N292.83 billion of crude.
Earnings from oil export increased marginally in February last month, as oil output surged by 100,000 barrels per day, amounting to an increase of 2.8 million barrels in the month, data from Reuters said.
An analysis of the data indicates that an increased crude oil production by 100,000 daily translates to a 2.8 million output in February 2023.
In March, 2023, the Nigerian National Petroleum Company Limited (NNPC) appointed the former Vice President of the Abu Dhabi National Oil Company, Jan-Marc Cordier, as its head of the oil trading firm, NNPC Trading Limited.
It was reported that Cordier’s appointment was the first time the NNPCL has hired a foreigner to head a critical part of its operations.