Although the global economy is on an upward slope overall, the effects of coronavirus continue to be felt particularly in India with a significant impact on oil consumption in particular.
According to information compiled by trade sources, Nigeria has been struggling to sell its crude shipments since the beginning of May due to India’s inability to tender for the purchase of crude oil. India, which is one of the largest buyers of Nigerian oil Agbami, Akpo, Bonny Light and Forcados, is facing a wave of Covid-19 contaminations, affecting its domestic consumption.
Added to this situation of weak demand from a large traditional customer is the stiff competition between suppliers. “The problem of lack of demand for Nigerian oil coincides with the fact that the United States has exported a lot of light crude oil that competes with Nigerian oil. Despite Nigeria’s agreements with India, Indian refineries are simply not buying at this time because of the negative effects of Covid-19. “Said one of the sources.
To reverse this trend, Nigerian crude sellers are looking for other buyers in Asia (Indonesia, Taiwan, Thailand) and Europe. On the Asian side, this demand could help sell between 25 and 28 unsold Nigerian shipments this month. As for demand from Europe, traders hope that demand will increase as West Texas Intermediate (WTI) light crude currently dominates the European market.
Nigeria relies heavily on revenue from the sale of hydrocarbons to finance its economy. Oil and gas revenues account for about 50% of federal government revenues and more than 90% of export earnings.