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25 Nigerian Crude Shipments Struggle to Find Buyers in Europe as French Strike Continues

Each cargo was about a million barrels of crude, Bloomberg reported.

Nigeria is struggling to find buyers for its crude oil as strikes in the French refining sector and seasonal maintenance at plants in Europe cut into the OPEC producer’s sales.

Between 20 and 25 shipments of Nigerian crude for April loading were still searching for buyers, according to four traders specialising in the West African market. That was a much weaker position than normal for this time of the month — when trade should be moving on to May’s barrels — and the prices the shipments could fetch were dropping, they said. Each cargo was about a million barrels of crude, Bloomberg reported.

Typically, one of Nigeria’s biggest buyers, France, took an average of 110,000 barrels a day of Nigeria’s oil over the past year, according to tanker-tracking data compiled by the medium.

But that demand shrivelled this month, with France’s overall crude imports dropping by half in March as the nationwide dispute over pension reforms escalated, according to Wood MacKenzie.

Well over 80 per cent of France’s 1.1 million-barrels-a-day processing capacity is halted or in the process of shutting down because of the industrial action, data compiled by Bloomberg show.
In addition to the impact of the strikes, other plants in Europe are also buying less crude because of seasonal maintenance, according to the traders.
Capacity is offline at some typical destinations for Nigerian crude, such as Spain’s San Roque refinery and Italy’s Sarroch plant, Bloomberg said. Facilities that have halted capacity for work also include Shell’s Pernis refinery near Rotterdam, Europe’s biggest plant.

“The Nigerian backlog is a combination of higher freight costs, lower tanker availability — specifically into Europe — as well as lower overall demand for West Africa light sweet as crude from other regions is deluging markets,” said Viktor Katona, lead crude analyst at Kpler.
Northwest Europe’s reduced buying matters for West Africa because alternative outlets are limited, traders said.

Mediterranean refiners can choose to skip Nigerian supply in favour of cheap North African barrels that ship more quickly to the region, or they can process some of the large volumes of US West Texas Intermediate crude that have been arriving in Europe in recent months, the report said.
Long-haul buyers, like Indian Oil and Indonesia’s Pertamina, have been taking more discounted Russian volumes this year, easing their need for Nigerian supply. China’s UNIPEC favours processing oil from Angola, where only around five April shipments are still available, the traders said.
Another driver of the unsold glut has been Nigeria’s revival of crude production that was shuttered in recent months by theft and technical issues, such as the nation’s Bonny Light stream.

 Nigerian export capacity may now exceed what the market needs in April and May, according to Katona, as more oil tankers have diverted away from France and strikes disrupt the country’s petroleum industry.
Crude oil carriers, Primero and Elisabeth Maersk, had both been anchored off Le Havre until Wednesday, before changing their destination to Rotterdam, according to ship tracking data compiled by Bloomberg. That was on top of several refined fuel carriers that moved away from the French port recently to go elsewhere.

The effects of French strikes to protest against pension reform are rippling across global oil markets. The nation is estimated to see a hit of about 500,000 barrels a day to the amount of crude that gets turned into fuels in March.

France released strategic stockpiles of oil products this month to avoid fuel shortages as the strikes blocked fuel movements from many local refineries.
French transport networks, oil refineries and schools have been hit by widespread disruption, as workers staged a national strike to protest an increase in the retirement age that was pushed through parliament without a vote.

Sporadic demonstrations had popped up in Paris and other cities after the French government forced the bill through last week, being the ninth day of strikes since the bill was introduced in January.

Only two out of 14 metro lines in Paris now operate a normal service even as the nationwide strike has also affected air traffic, with 30 per cent of flights impacted at Paris Orly airport.

Unionised workers blockaded a major oil refinery in Normandy and another one in Fos-sur-Mer in the south of France, according to a government spokesperson.
“We are intervening in a targeted manner to unblock oil storage tanks that are blocked by demonstrators,” the Minister of Energy Transition, Agnès Pannier-Runacherin, said in a statement.

“If the strike is a fundamental constitutional right, blockading is not one… The police is mobilised in difficult conditions and has my full support,” the statement said.

The government’s plan to raise the retirement age for most workers by two years was opposed by huge numbers of people. But despite protests that drew more than a million people onto streets across the country, President Emmanuel Macron’s government did not back down.

It rammed the legislation through the French National Assembly last week using a constitutional clause that allows the government to bypass a vote.
The country’s generous pension system and early retirement have been a point of pride since they were enacted after World War II. Under the new law, the retirement age for most workers will be 64, still one of the lowest in the industrialised world.

The 25 million barrels of crude oil, which are seeking buyers in Europe, are more than half of the country’s production that was roughly 40 million barrels in February.

Emmanuel Addeh, Kingsley Nwezeh in Abuja, Peter Uzoho in Lagos

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