How demand for Nigerian crude dipped on the heels of Russia-Ukraine war – NNPC

The demand for the Nigerian grade of crude oil by the once dependable Asian market has taken a dip due to the ongoing Russia-Ukraine war, the Nigerian National Petroleum Company Limited (NNPCL) has said.
According to the NNPC, the situation made India, a primary destination for Nigerian grades, opt for discounted Russian barrels to the detriment of some Nigerian volumes.
The Executive Director of Crude & Condensate, NNPC Trading Limited, Maryamu Idris, disclosed this during a panel presentation at the Argus European Crude Conference in London.
She said: “To illustrate the extent of this shift, Nigeria’s crude exports to India dwindled from approximately 250,000 barrels per day (bpd) in the six months preceding the February 2022 invasion of Ukraine to 194, 000 in the subsequent six months afterwards. And so far this year, only around 120, 000 bpd of Nigerian crude volumes have made their way to India.”
Idris also noted that the Nigerian crude flow to Europe has increased in a bid to fill supply gaps left by the ban on Russian crude, adding that six months before the war, 678, 000 bpd of Nigerian crude grades went to Europe, compared to 710, 000 bpd six months later and 730, 000 bpd so far this year.
“This trend makes it evident that Nigerian grades are increasingly becoming a significant component in the post-war palette of European refiners.
“Several Nigerian distillate-rich grades have become a steady preference for many European refiners, given the absence of Russian Urals and diesel.
Speaking on production challenges, Idris said like many other oil-producing countries, Nigeria had faced production challenges aggravated by the COVID-19 pandemic, including reduced investment in the upstream sector, supply chain disruptions impacting upstream operations, ageing oil fields, and oil theft by unscrupulous elements.
According to her, these factors contributed to production declines in the second half of 2022 and early 2023.
She, however, noted that the challenges are fast becoming a thing of the past with the introduction and implementation of a new framework for the domestic petroleum industry (the PIA of 2021), rejuvenating the business landscape, and re-positioning NNPC Limited to adopt a more commercial approach to the management of the nation’s hydrocarbon resources.
She also disclosed that NNPC Limited has secured vital partnerships with notable financial institutions to promote upstream investments to restore and sustainably grow production capacity in the coming years.
“NNPC Limited is championing concerted efforts in partnership with host communities and private stakeholders to address the security and environmental challenges in the Niger Delta to further fortify production growth.
“Suffice to say we have already begun seeing significant progress on the rebound. In September 2023, Nigeria recorded its highest crude oil and condensate output in nearly two years, reaching 1.72 million barrels per day. This, we believe, is just the beginning of our production rebound”, Idris added.

Source: allnewsng.com

EntekHub.com

All Author Posts