US SLASHES IMPORTS OF NIGERIAN OIL BY 60%
The United States cut its imports of Nigerian crude oil by 60.37 per cent to 1.93 million barrels in January this year, compared to the 4.87 million barrels bought in the same month in 2019. Latest data from the US Energy Information Administration showed that the country imported 4.85 million barrels of crude from Nigeria in December 2019, down from 6.33 million barrels in the previous month.
The US has significantly reduced imports of Nigerian crude oil in the past few years as the oil produced in its shale operations is similar to the light sweet Nigerian crude. Following the coronavirus-induced crash in oil prices and demand, Nigeria has been struggling to sell its crude oil cargoes. 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. 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. The EIA, in its April Short-Term Outlook, projected that the US would again become a net importer of crude oil and petroleum products in the third quarter of 2020 and remain a net importer in most months through the end of 2021. It said, “Fewer barrels are available for export as U.S. crude oil production continues to decline.
“In addition, net exports of petroleum products will be lowest in the third quarter of 2020, when US refinery runs decline in response to lower demand for refined products. “In September 2019, the United States exported 89,000 barrels per day more crude oil and petroleum products than it imported and became a net exporter of crude oil and petroleum products for the first time since monthly records began in 1973.” The EIA said the US continued to be a net exporter through February when net exports reached 1.79 million bpd, forecasting that net exports would continue through May 2020.