Outages at North Sea oilfields have helped put competing Nigerian oil on pace to arrive in Europe at the highest levels in seven months in June, according to Refinitiv Eikon data and traders.
Nigeria is set to export about 905,000 barrels per day (bpd) to the continent this month, the most since a roughly five-year high of about 1 million bpd in November.
Norwegian and UK offshore fields in the North Sea normally provide a steady supply of lighter crude to refineries feeding northern Europe’s major economies and are traditionally more competitive than Nigerian grades due to their proximity. But planned maintenance on Norway’s Ekofisk oilfields this month slashed exports to just one cargo from the usual 10-15. Flotta, another of the 12 North Sea fields, closed for repairs over two weeks in late May.
“Nigerian grades are normally middle-distillate-rich and with Ekofisk having undergone maintenance, Nigeria is meeting European demand for this type of crude,” said Ehsan Ul-Haq, lead analyst for oil research and forecasts at Refinitiv. Supply of the five North Sea crude grades that underpin the dated Brent benchmark is set to fall to around 720,000 bpd in June, from 948,000 bpd the month before.
The contamination of a pipeline carrying Russian Urals crude in April interrupted flows to central and eastern Europe for a month and left stocks in need of replenishment. Higher volumes to Europe have provided an unexpected boon, with Nigerian exports to the United States on the wane for a decade due to increased U.S. shale oil production, and demand relatively steady in Nigeria’s key markets India and Indonesia.