U.S. Imports of Nigerian Crude Plummet to Zero in Short Time

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--A sharp drop in Nigerian oil exports to the U.S. poses a major threat to Nigeria's economy. U.S. imports of crude oil in July fell to zero for the first time, according to the most recent government figures.

In the past, Nigeria was the world's fifth-largest exporter crude oil to the U.S. The Nigerian economy is highly dependent on oil revenue, with oil export income servicing more than 85% of its national budget. Nigeria's change in fortune has been caused by the North American shale oil production boom and pursuit of alternative energy sources.

According to U.S. Energy Information Administration (EIA) data last week, that total U.S. imports rose to 7.62 million barrels per day (BBL/d), from 7.05 million BBL/d in June. Imports have risen to their highest level for this year, according to the EIA data, but were down from 8.06 million BBL/d a year ago.

Before falling to zero in July, imports from Nigeria stood at 89,000 BBL/d in June, all of which went to the U.S. Atlantic coast. The U.S., which formerly was the biggest importer of Nigerian crude at more than 1 million BBL/d, was down to an average of 100,000 BBL/d in the first half of this year. Prior to July, Nigeria's crude exports to the U.S. had dropped 91.3% in one year. In December 2012, North America accounted for 22.19% of Nigeria's total crude oil exports, but it had dropped to 2.23% by December 2013.

The Nigerian National Petroleum Corporation (NNPC) reported that by December 2013, Europe was the largest importer of Nigerian crude, accounting for 47% of the total, followed by Asia and the Far East with 26%, and Africa with 12%. By this time, the U.S. had dropped to the 10th-highest importer. South America accounted for 10% and Oceania/Pacific accounted for 3%.

India emerged as the highest importer of Nigerian crude in December 2013, with imports for that month totaling 13.09 million barrels, followed by the Netherlands with 9.89 million barrels, and France with 4.5 million barrels. Brazil took 4.87 million barrels in December 2013, Spain with 4.6 million barrels, and South Africa with 3.9 million barrels.

Civil strife, theft and other disruptions have pegged back Nigeria's total crude production to less than 2 million BBL/d.

Under oil export income pressures, Nigeria's government appears to be remaining positive despite lower-than-expected revenues, low foreign investments and weak infrastructure, according to observers. They claim that the economy is robust enough to withstand the shock waves.

For related information, see September 29, 2014, article - Opponents of U.S. Crude Oil Export Ban Make Their Cases.

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