Experts say Nigeria faces tough times ahead as the lingering oil production tussle between the United States of America and the Organisation of Petroleum Exporting Countries (OPEC) takes its toll on the country’s prized energy export commodity.
“Nigeria is in immense pain,” declares Amrita Sen, chief oil analyst at Energy Aspects. And the reason is not far-fetched: Since it lost its major crude oil market share in the United States of America, it has been struggling to gain grounds in other markets with OPEC’s decision to fight for market share with America, Russia and other non-cartel members instead of propping up prices through production cuts, thus exacerbating the vulnerability of Africa’s top energy supplier and others.
Besides seeing its oil revenue drastically reduced in the wake of global oil price slump and domestic production shortfalls due to oil theft and pipeline vandalism, Nigeria has struggled to find buyers for its premium quality Bonny Light crude in recently times.
According to trending energy reports, Nigerian crude oil cargoes that normally sell a month ahead of delivery have languished without buyers lately. According to Barclays, at least 80 million barrels of Nigerian and Angolan crude were still seeking buyers since early May.
Nigeria’s oil, which was once a highly desired, easy-to-refine product, is now hard to sell, unlike 2014 when it fetched over $2 a barrel more than the global benchmark, Brent crude, the energy analyst disclosed.
So far in 2015, the Nigerian premium quality crude has slid to 74 cents, on average, the lowest in a decade; and there is no sign in sight that OPEC could reverse its production policy stands soon.
By Olisemeka Obeche (with agency reports)