The Nigerian National Petroleum Company Limited (NNPC) has disclosed the repercussions of the ongoing Russia-Ukraine conflict on Nigerian crude oil exports. In a statement shared on X (formerly Twitter), Maryamu Idris, the Executive Director of Crude and Condensate at NNPC Trading Limited, revealed that the conflict has led to a decline in demand for Nigerian crude in the Asian market, particularly from India.
According to Idris, the conflict has triggered substantial price shocks globally, influencing commodity and energy prices. As a consequence, India, traditionally a significant destination for Nigerian crude, has shown an increased preference for discounted Russian barrels. This shift has resulted in a drop in Nigeria’s crude export to India from approximately 250,000 barrels per day (bpd) in the six months before the invasion to 194,000 bpd in the subsequent six months. In the current year, only about 120,000 bpd of Nigerian crude has made its way to India.
However, Idris pointed out a positive trend for Nigerian crude in Europe, where exports have risen to fill supply gaps created by the ban on Russian crude. Nigerian crude flow to Europe increased from 678,000 bpd six months before the war to 730,000 bpd in the current year. Popular Nigerian grades, such as Forcados Blend, Escravos Light, Bonga, Egina, and Nembe Crude, have become preferred choices for European refiners.
Addressing production challenges, Idris highlighted issues faced by Nigeria, including reduced investment, supply chain disruptions, aging oil fields, and oil theft, which contributed to production declines in late 2022 and early 2023. She expressed optimism, stating that challenges are diminishing with the implementation of the Petroleum Industry Act (PIA) 2021. The PIA, she noted, is revitalizing NNPC Limited’s approach to managing hydrocarbon resources and has secured partnerships to promote upstream investments.
Idris concluded by highlighting progress in addressing security and environmental challenges in the Niger Delta, emphasizing the significant rebound in Nigeria’s crude oil and condensate output in September 2023, reaching 1.72 million bpd, marking the beginning of a production rebound.