FG eyes more revenue as US increases crude purchase

FG eyes more revenue as US increases crude purchase

The United States has resumed huge crude oil importation from Nigeria, increasing the country’s oil revenue by N156bn last month, media findings revealed.

The US increased its imports to 4.3 million barrels in March, the highest since June 2018, according to Customs data on Refinitiv Eikon.

US refiners turned to other crude oil sources for the first time in seven years to boycott supplies from Russia as sanctions for the Ukraine invasion.

Part of the crude grades the country turned to was North Sea’s Forties and Nigeria’s Bonny Light.

It would combine crude oil from the North Sea, West Africa and North Africa with sour crudes from Mexico and Saudi Arabia to meet refiners’ preferred specifications

Nigeria’s Bonny Light sold for $78 per barrel in March, and 4.3 million barrels were exported to the U.S. bringing total revenue from the country’s oil export to the world’s largest economy to about N156bn.

The US bought 5.18 million bpd from Nigeria in December 2018, down from 10.03 million bpd in January of the same year.

In 2019, its imports plunged to 539,000 barrels per day in February from 4.87 million bpd in January.

Nigeria’s Light sweet crude is very similar to the light oil produced in US shale.

The increase in US shale production caused the country’s appetite for Nigerian crude to drop significantly.

In 2014, when global oil prices fell from a peak of $115 per barrel, Nigeria saw a further drop in U.S. imports of its crude to 21.24 million barrels.

For the first time in decades, the US did not purchase oil from Nigeria in July and August 2014 as well as June 2015, according to the Energy International Agency data.

In 2010, the US bought as much as 358.92 million barrels from Nigeria but slashed its imports to 280.08 million barrels in 2011.

The country imported just 125,000 barrels of oil from Nigeria in 2021.

Nigeria used to be one of the major crude oil suppliers to the US; however, Canada took over the position with its increased oil sand production.

The Chief Executive Officer of Centre for the Promotion of Private Enterprise, and the immediate past Director General of the Lagos Chamber of Commerce and Industry, Dr Muda Yusuf told The PUNCH that Nigeria’s failure to meet its OPEC quota and the continued importation of refined petroleum products had robbed the country of the gains of the increased exports to the US

“This is good news for Nigeria. Although Nigeria has been unable to meet its production quota from OPEC and then we still import petrol, otherwise, oil-producing countries are currently smiling to the bank,” he said.

He advised Nigeria to make the most of the current increase in revenue, caused by the Russia-Ukraine war.

“What the increase in importation from the US means is that Nigeria will now have more inflow of foreign exchange, more revenue and closer friendship ties with the country. The best thing is for us to take advantage of the current increase in revenue,” he added.

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