Negative Effect Of China’s Decision Not To Buy Crude Oil From Nigeria Again

The petroleum sector in China has decided not to buy crude oil from the Nigeria again.

China is currently the second largest consumer of crude oil in the world, and it will be a major financial loss to Nigeria if they stop buying.

According to a data from the US Energy Information Administration, China likes buying crude oil that is heavy and sweet as it fits its refineries.

China has a lot of complex and sophisticated refineries that can produce middle distillates by distilling heavy crude oil. This has made China to ignore Nigerian crude for now, the Nigerian crude light sweet crude oil is very sparse.

About 45% of Nigerian crude exports went to Europe in 2014, according to the EIA data. Nigeria has been dependent on the European region where crude demand is not as high as in the past. This has made a lot of oil producing countries, including Nigeria to source for buyers in Asia, with China been the biggest buyers.

Nigeria’s condition is made worse by the fact that it has become the biggest casualty of rising United States shale oil production, Vanguard reports.

Until about seven years ago, the US, which remains the largest oil consumer in the world, used to buy more than 1 million barrels per day of light sweet Nigerian crude oil, which was almost 50% of Nigerian oil exports at the time.

In 2014, only 3% of Nigerian exports went to the US, according to the same data published by the US EIA.

Unfortunately, Nigeria has also lost another big customer in the US, as the country’s shale oil is similar in quality to light sweet Nigerian crude oil, and the US did not need any more oil from Nigeria because it began discovering its own Shale oil .

Last year, there were six weeks in a row where US did not import a single barrel of crude oil. It is the first time in almost four decades.

The discovery of shale oil altered the direction of crude flows both within Europe and to Asia. And Nigeria has been the biggest casualty of this recent changes.

India has now overtaken other countries as the largest buyer of Nigerian crude in the last few years. But its demand is also reducing as the country is focusing on the Latin American crude market.

Meanwhile, the capital of China, Beijing, has banned all forms of public smoking following the signing of a new law.