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The latest bad news for the largest economy in Africa, Nigeria today, is that its biggest oil buyer, India has switched purchase loyalty to the United States.
Before now, Nigeria hardly sells to African nations but focused on Europe, Middle East and America.
However, trouble seems to have started for Nigeria when India decided not just to be buying crude from the United States, but begin to diversify its sources of the commodity.
Statistics show that India is now the latest Asian country to buy the US crude after South Korea, Japan, China, Thailand, Australia and Taiwan.
The key driver of the switch is linked to the cuts by the Organisation of Petroleum Exporting Countries (OPEC) which pushed up prices of Middle East heavy-sour crude, or grades with a high sulphur content.
Currently, refiners in India, the world’s third biggest oil consumer, are diversifying crude imports as cheaper alternatives have emerged due to a supply glut in the global markets.
Indian state-run refiner, Bharat Petroleum Corporation Limited, bought one million barrels of sour crude from the US for its 190,000 barrels per day Kochi refinery, company officials said — its first ever purchase of the US crude via a tender.
The refiner bought 500,000 barrels each of Mars and Poseidon grades for delivery to the west coast of India between September 26 and October 15 through a tender that closed on July 14.
Earlier this month, Indian Oil Corporation, the country’s largest refiner, sealed a deal to import 1.6 million barrels of the US crude for delivery in the first week of October to its Paradip refinery on the east coast — its first ever purchase of the US crude.
The IOC deal came shortly after the visit of the Indian Prime Minister, Narendra Modi, to the US, where boosting energy cooperation between the two countries was discussed.
The price of the US sour crude blends that Indian refineries are showing an appetite for is “reasonably competitive,” according the Director (Refineries), Bharat Petroleum Corporation, Ramamoorthy Ramachandran.
“We are also looking at buying low sulphur oil from America if priced competitively. Our refineries need both low sulphur and high sulphur oil,” he said, adding the latest purchase was a trial cargo, according to Economic Times.
Whereas industry observers say the rise in exports from the US would add to global oversupply, and intensify the tussle for market share between the US, OPEC and Russia, Business Hilights recalls that India almost throughout last year till end of second quarter had been Nigeria’s lead buyer of crude.
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