India and the United States have slashed their imports of Nigerian crude oil by 43 per cent and 53 per cent, respectively, translating to a loss of at least N88 billion in earnings, the latest report from the Nigerian National Petroleum Corporation (NNPC), has shown.
India, which became the single largest buyer of Nigerian crude in 2013 after the US, reduced its imports from Nigeria in May this year as it bought 7.74 million barrels, down from 13.51 million barrels in April; 12.51 million barrels in March and 12.70 million barrels in February.
The Asian country had in January imported 16.29 million barrels of Nigerian crude, its highest monthly level this year, the NNPC data showed.
The US, whose imports of Nigerian crude rose by 577.8 per cent in the first quarter of this year compared to the same period of 2015, reduced its import by 5.77 million barrels in May from 10.13 million barrels in the previous month.
In February, the US bought as much as 12.12 million barrels from Nigeria, making it the second largest buyer of the country’s crude after India.
Using a conservative price of $40 per barrel and N197/$ official exchange rate in May, the decrease of 11.14 million barrels in the two countries’ imports of Nigerian crude amounts to N87.9bn.
Global benchmark, Brent crude, had on May 26 hit $50 for the first time in 2016.
The Editorial Director, European and African Oil, Platts, Joel Hanley, in an interview on the sidelines of the Platts’ Lagos Oil Forum, said India “can go anywhere else to buy if the price is right.”
He, however, said, “Nigeria has priced itself to a level where it has regular buyers in India; obviously, there is investment from India that helps that flow. I will say that it is a buyer’s market. India, China and every other buyer have their pick of the grades these days, and that is why differentials are so low. They can pick and choose whatever they want.
“I think right now in this kind of environment, it is about securing a good relationship and a good, reliable trade flow. Trust is so important. And I think if India and Nigeria can focus on that relationship, there shouldn’t be too much threat to that.
