There are reports that Nigeria’s crude oil exports are under pressure as the United States is flooding Europe market with a large volume of crude.
The Brent, against which Nigeria’s oil is priced, rose by $0.37 to $74.43 per barrel this week as compared to around $66 at the start of this year.
The relatively high prices brought about by a pact in OPEC in cutting output jointly by 1.8 million barrels per day, coupled with the surging US output, are making it harder to sell Russian, Nigerian and other oil grades in Europe.
The US crude oil is on offer everywhere and this puts local grades under a lot of pressure. The US output is expected to hit 10.7 million bpd this year, rivaling that of top producers, Russia and Saudi Arabia.
U.S. crude oil production surged above 10 million barrels a day for the first time in more than four decades as , new drilling and production techniques have provided access billions of barrels of recoverable U.S. oil in shale rock formations. This has reversed decades of declining output and turned the country into a net exporter.
According to Reuters, Nigeria’s oil exports are expected to fall slightly in June to just under 1.8 million bpd. The export plan, comprises 60 cargoes, for a total of 1.796 million bpd, compared with the 1.895 million bpd in May’s revised export programme.
What is Nigeria doing ?
Minister of State for Petroleum, Ibe Kachikwu had in March called on International Oil Companies (IOCs) to lower their cost off production. He also stated that the Petroleum Industry Bill (PIB) would help address this.
Nigeria is largely dependent on crude oil earnings for both government revenue and foreign exchange.