- The NNPC has said the quantity of oil exported to India has reduced greatly over the past months
- It associated the decline with the fall in the price of Russia’s oil which attracted the Asian country
- Meanwhile, it stated that Nigeria’s crude oil has become more attractive in Europe
Legit.ng journalist Zainab Iwayemi has over 3-year-experience covering the Economy, Technology, and Capital Market
The Nigerian National Petroleum Company Limited (NNPC Ltd) has revealed why India jettisoned Nigerian crude oil. The Asian country has found its new love with the discounted Russian oil.
The ongoing war between Russia and Ukraine led to a dip in demand and forced Russia to sell at reduced prices.
Nigeria's supply to India dips
Maryamu Idris, NNPC’s Executive Director of Crude and Condensate disclosed this during a recent panel presentation at the Argus European Crude Conference in London. She said,
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“To illustrate the extent of this shift, Nigeria’s crude exports to India dwindled from approximately 250,000 barrels per day (bpd) in the six months preceding the February 2022 invasion of Ukraine to 194,000 in the subsequent six months afterward. And so far this year, only around 120,000 bpd of Nigerian crude volumes have made their way to India,
Idris, however, said that Nigeria has increased its crude flow to Europe to fill supply gaps left as a result of the ban on Russian crude.
Before the war, she stated that 678,000 bpd of Nigerian crude grades went to Europe, adding that this has since increased to 710,000 bpd six months later and 730,000 bpd so far this year.
She explained that the trend has underscored the importance of Nigerian crude in the post-war palette of European refiners in a Ripples Nigeria Report.
She added that several Nigerian distillate-rich grades have become a steady preference for many European refiners due to the absence of Russian Urals and diesel.
“Forcados Blend, Escravos Light, Bonga, and Egina appear to be the most popular, and our latest addition – Nembe Crude – fits well into this basket.”
Idris, however, stated that the Nigerian crude output was affected by production challenges. This, she said, includes reduced investment in the upstream sector, supply chain disruptions, aging oil fields, and oil theft.
With the introduction of and implementation of a new framework for the domestic petroleum industry (the PIA of 2021), in addition to re-positioning NNPC Limited to adopt a more commercial approach among other steps taken, Idris said the challenges are getting solved.
Charles Abuede, a financial analyst said that the plan by some OPEC+ countries to cut production is a sign that oil price will rise but some buyers are likely to see a favourable market with incentives to buy.
"I think Nigeria should begin looking beyond the export of crude oil as a major source of FX as it still import same petroleum products from overseas.
"So, maintaining relationship with the Europeans will be of great benefit if we take a check for the volumes in comparison to India.
"The concern should come if the variance will bring about a decline in the sales volume or earnings."
Earlier, Legit.ng reported that NNPC may be spending about N843 billion monthly on petrol imports following the halt in oil swaps by the company.
The NNPCL, in another report, said it is working with relevant parties in the reconciliation committee set up by President Bola Tinubu to investigate, review, and reconcile the financial records of alleged indebtedness to the federation.
Nigeria’s Oil Earnings Rises by N188.71bn as Output Rises as NNPC Speaks on Plan to Move HQ to Lagos
Nigeria’s earnings from crude oil sales increased by N188.7 billion in August 2023 due to the rise in the production of the product by both international and local operators, Legit.ng reported
Nigeria’s oil appreciated in August, as against the previous month of July, according to data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and the Organisation of Petroleum Exporting Countries (OPEC).
In August, Nigeria produced about 26,615,125 million barrels of crude oil, higher than the 33,761,767 million barrels pumped in July.