India slashes import of Nigeria crude oil

Nigeria’s oil supply to India has hit its lowest level
for this year, with the Asian country intensifying
effort to diversify its sources of the commodity.
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 shale oil production boom.
But the latest monthly report of the Nigerian
National Petroleum Corporation showed that India
lost its spot as Nigeria’s biggest oil buyer to the US.
According to the NNPC, India bought 7.67 million
barrels in May, down from 12.49 million barrels the
previous month.
The Asian country imported as high as 14.61 million
barrels of Nigeria’s crude in January; 11.64 million
barrels in February, and 12.63 million barrels in
March.
In December, its import of Nigeria’s crude tumbled
by 8.6 million barrels to a record low of 5.82 million
barrels, compared to the 10.11 million barrels
purchased by Netherlands, which emerged the
biggest buyer.
Refiners in India, the world’s third biggest oil
consumer, recently stepped up crude oil purchases
from the US as cheaper alternatives have emerged
due to a supply glut in the global markets.
Last month, Indian Oil Corporation bought 1.9
million barrels of US crude in its second import
tender seeking oil from the Americans, making it the
first Indian refiner to purchase Eagle Ford shale oil.
The latest purchase came after a previous import
tender where the IOC bought 1.6 million barrels of
Mars crude and 400,000 barrels of Western
Canadian Select.
Indian refiners have turned their sights to crude
from the US as they are keen to diversify their crude
import sources as arbitrage opens due to global oil
supply cuts.
Rising production and supplies from the US have
also made arbitrage economics feasible for Indian
imports.
India’s Hindustan Petroleum Corporation
announced last month that it planned to buy low-
sulphur oil from the US in the next few months for
its 166,000 barrel per day Vizag refinery in southern
India.
The HPCL’s Finance Chief, J. Ramaswamy, said the
company was evaluating if Nigeria’s sweet oil could
be replaced with the US oil.
He added that the HPCL had the appetite to import
a very large crude carrier containing two million
barrels of the US oil every month.
The US had in December 2015 removed the 40-year-
old restrictions on its crude exports, following the
rapid growth of its oil production from 2013 to
2015.
Meanwhile, the US import of Nigeria’s crude oil rose
to 55.78 million barrels in the first half of this year
from 45.09 million barrels in the same period of
2016.
The US Energy Information Administration revealed
in its latest data that the country bought a record
10.24 million barrels from Nigeria in March, the
highest monthly import since July 2013.
The US almost tripled the volume of crude oil
bought from Nigeria last year, with the biggest
monthly import of 8.43 million barrels in July. It
imported 76.9 million barrels of Nigeria’s oil in 2016,
up from 19.9 million barrels in 2015.
Nigeria saw significant reduction in the US imports
of its crude in recent years, starting from 2012,
following the shale oil production boom.
The US import of Nigeria’s crude fell to 6.17 million
in June 2013 from 10.115 million barrels in May and
about 40 million barrels in March 2007.
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 Nigeria’s crude in July and
August 2014 and June 2015, according to the EIA
data.
Source: Business News