The Nigerian National Petroleum Company Limited (NNPCL) has revealed that the ongoing conflict between Russia and Ukraine has had a significant impact on Nigeria’s crude oil inflows in the international oil market.
This conflict has led to a decrease in demand from the previously reliable Asian market, particularly in the early stages of hostilities in the Eastern bloc.
According to a statement released on Wednesday, Maryamu Idris, the Executive Director of Crude & Condensate at NNPC Trading Limited, disclosed this during a panel presentation at the Argus European Crude Conference in London.
Idris noted that in addition to the substantial price shocks affecting global commodity and energy prices, the Russia-Ukraine conflict has created a situation where India, a primary destination for Nigerian crude oil, has increased its interest in discounted Russian oil at the expense of some Nigerian volumes.
“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,” she said.
On the other side, she noted that Nigerian crude oil exports to Europe had increased to compensate for the supply gaps left by the ban on Russian crude. Prior to the war, 678,000 bpd of Nigerian crude grades were exported to Europe, and this figure grew to 710,000 bpd six months later and 730,000 bpd so far this year.
Idris stated, “This trend makes it evident that Nigerian grades are increasingly becoming a significant component in the post-war palette of European refiners. Despite the absence of Russian Urals and diesel, several Nigerian distillate-rich grades have become a steady preference for many European refiners.
“Forcados Blend, Escravos Light, Bonga, and Egina appear to be the most popular, and our latest addition — Nembe Crude – fits well into this basket. This was a strong factor behind our choice of London and the Argus European Crude Conference as the ideal launch hub for the grade.”
