Renewed and increased export of crude oil to Asia and United States of America has come as a boon for West Africa’s oil sector
Exports to Asia are likely to surpass 2.1mn barrels per day (bpd) in July, the second-highest level this year, according to data from Reuters. The amount is second only to April's 2.43mn bpd, which was the highest in at least the last 10 years. Traders also said that the final tally could go up further as cargoes sail from floating storage.
The 15 per cent increase over June came partly as a result of a near-doubling in bookings to India, where Reliance Industries alone secured about eight million barrels to load in July on four cargoes. Indian refiners such as Reliance have preferred spot purchases of crude this year for the best price in a market inundated with light, sweet crude.
Nigeria has slashed prices to help it find new outlets as it grapples with shale oil-induced oversupply in the market. The West African country dislodged Saudi Arabia as India's largest crude oil supplier in May this year. New sales, however, have been hindered by traders looking to offload millions of barrels of oil held in storage.
Tenders from Indian refiners IOC and HPCL and Indonesia's Pertamina were awarded to traders such as Glencore and Shell, who will supply them with cargoes from floating storage or those that were loaded earlier in the year. ExxonMobil booked at least two cargoes to sail to Australia, while other traders booked cargoes to Singapore. South Korea's GS Caltex bought 920,000 barrels of West African crude, probably Angola's Cabinda, from Unipec.
Meanwhile, in USA, Delta Air Lines is purchasing Qua Iboe crude from Nigeria. The first shipment of about one million barrels is already on its way to the company’s refinery in Pennsylvania on the eastern coast of the country, and will be the first cargo from Nigeria since May last year.
A second cargo with another one million barrels is to be delivered later this month, and the airline could be buying a total of as much as five million barrels of Qua Iboe over the next month or two. The company is also be looking to buy another one million barrels of Nigeria’s Forcados crude.
