- 84 Million Nigerian Cargoes Stranded At Sea
- India, Nigeria’s Largest Buyer Slashes Oil Imports
- Experts Ask Nigeria To Bolster Non-Oil Exports
International buyers continue to balk at the country’s dominant exports, crude as the United States slashed the importation of Nigerian crude oil by 60.37 per cent to 1.93 million barrels in January 2020.
Pre-Covid-19, The New Diplomat while putting the figures side by side learnt in January 2019 the US bought 4.87 million barrels of Nigerian crude, indicating that the Coronavirus pandemic and the oil price war have done what some experts termed the damage of the century to Nigeria’s oil exportation prowess.
According to latest data from the US Energy Information Administration, the US imported 4.85 million barrels of crude from Nigeria in December 2019, down from 6.33 million barrels in the previous month.
Before now, the US has reduced imports of Nigerian crude in the past few years because of the similarity in its shale oil to Nigeria’s light sweet crude. This has made it difficult to sell Nigeria’s crude to the US, explaining the reason for the sharp drop in oil exports for Africa’s largest oil producer.
Booming production from shale drastically cut Nigerian exports to the US — once the destination for about 40 per cent to 50 per cent of the country’s cargoes.
US imports of Nigerian crude fell from 148.48 million barrels in 2012 to 87.40 million barrels in 2013 on the back of shale oil boom.
In 2014, when global oil prices started to fall from a peak of $115 per barrel, Nigeria saw a further drop in US imports of its crude to 21.24 million barrels.
For the first time in decades, the US did not purchase any barrel of Nigerian crude in July and August 2014 as well as June 2015, according to the EIA data.
In 2010, the US bought as much as 358.92 million barrels from Nigeria, but slashed its imports to 280.08 million barrels in 2011.
Prior to the lockdowns and collapse in crude oil demand caused by coronavirus crisis, the rise of US shale oil was already proving uniquely challenging for Nigeria.
Recently, the Wall Street Journal reported that Nigeria’s 84 million barrels of crude oil are currently stranded at sea.
According to the report, Nigerian crude in cargo ships had nowhere to go and Nigerian companies are competing to fill the “last few empty tankers left at sea”
The tankers are reported to be coming from production fields managed by Royal Dutch Shell and Exon Mobil.
This comes as India’s Reliance Industries, owner of the world’s biggest refining complex, saw its imports of Nigerian crude oil slump to zero in the first quarter of the year, compared to 9,800 barrels per day in Q1 2019.
India has remained the single largest buyer of Nigerian crude oil in the past few years after the United States slashed its imports from the country on the back of its shale oil production boom.
Indian industries buying most of Nigeria’s imported 8.3 per cent less oil in March than in the same month of 2019, according to data from shipping and industry sources.
It said the March imports, at 1.24 million bpd, were 6.1 per cent per cent above the previous month’s. Reliance shipped in about 43 per cent of its imports from Latin America, slightly lower than about 43.5 per cent a year before, the data showed.
The share of Middle Eastern oil in its overall purchases rose to 43.19 per cent from about 37 per cent a year ago. Imports from the US declined to about 10 per cent from 13 per cent a year ago, the data showed.
Meanwhile, as government struggle to cope with the reality of a future without oil revenue, out of the 191 million metric tonnes of export cargo in 2019 shipped through the Nigerian ports, crude oil accounted for 78 per cent while non-oil cargo accounted for only 22 per cent.
The Managing Director, Nigerian Ports Authority, Miss Hadiza Bala-Usman, disclosed this at a recent BudgIT webinar tagged ‘Non-oil export: Disrupting Nigeria’s Growth Cycle.’
Bala-Usman became troubled over the grim statistics, saying that against the backdrop of dwindling oil prices, it was not a good signal for the economy.
Data from the National Bureau of Statistics show the monetary value of the goods exported during the period.
According to the NBS, Nigeria shipped $53.6bn worth of goods around the globe in 2019.
Although this shipment amounts to an increase of 10.7 per cent since 2015 and a 1.3 per cent increase from 2018, it shows that Nigeria made $11.8bn from non-oil exports while $41.8bn came from crude oil exports during the period under review.
Bala-Usman said, “Nigeria’s crude shipment is tied to exportation and it contributes the highest revenue of the ports.”
She predicted that with the reduction in oil shipment and price, occasioned by the COVID-19 pandemic, the revenue of government from the port was likely to dip by 75 per cent.
Bala-Usman said it was time to increase shipment of non-oil exports.
She said, “This underscores the importance of diversification of the economy through non-oil exports so that we can reverse this trend.
“There is a need to encourage local investors. We are a large country of consumers; we need to increase local production. We need to make domestic investment a priority.”
Also speaking during the webinar, the Executive Secretary/Chief Executive Officer, Nigeria Investment Promotion Council, Yewande Sadiku, said the pandemic may see foreign direct investment into African countries fall by 30-40 per cent.
She agreed with Bala-Usman on the need to strengthen the local production base and increase non-oil export while also attracting more FDI.
