Nigeria’s Oil Revenue Dries Up.......

Amid the economic fallout from the COVID-19 pandemic, which has brought to a halt economic activity and travel, demand for crude has been crippled, resulting in a dramatic oversupply.

Despite Brent-crude futures rallying in recent weeks, Nigeria, is facing a fast-looming future without reliance on fiscal revenue from its massive oil wealth, Bloomberg has reported.

Accordingly, a glut of Nigerian oil has been bringing the country about $10 less than the $30 a barrel registered on Tuesday.

“It’s now dawned on everyone across the country how severe this threat is. There is a possibility that at least for three to five years, there’s going to be no revenue flowing to the government from oil,” Andrew Nevin, a partner and chief economist for Nigeria at PricewaterhouseCoopers LLP, told Blooomberg.

Once oil prices, which normally contribute about half of Nigeria’s fiscal revenue, are at around $20 a barrel, Nigeria receives very little cash for its crude, Nevin of PwC was cited as saying at a webinar on 30 April.

Current global measures to fight the spread of COVID-19, with lockdown procedures, travel bans and shut industries, have driven oil prices to new lows where they fail to cover the costs of pumping barrels for many of Nigeria’s companies, writes the outlet.

Despite such low prices, on 5 April traders were cited as acknowledging that around a quarter of Nigeria’s oil cargoes for his month were still awaiting buyers, with at least six tankers used as storage space for about 4.5 million barrels of crude were idling off Gibraltar and nearby Ceuta.

According to tanker tracking data cited by Bloomberg, the tankers, floating in the area since the end of March, were about to be joined by another one.

Despite such low prices, on 5 April traders were cited as acknowledging that around a quarter of Nigeria’s oil cargoes for his month were still awaiting buyers, with at least six tankers used as storage space for about 4.5 million barrels of crude were idling off Gibraltar and nearby Ceuta.

According to tanker tracking data cited by Bloomberg, the tankers, floating in the area since the end of March, were about to be joined by another one.