By Jeph Ajobaju, Chief Copy Editor
Nigeria’s biggest oil buyer, India, is finalising paperwork for imports in November, which should favour Nigeria, but Africa’s largest producer may not benefit from the partial shutdown in Saudi Arabia to improve overall sales.
China’s Unipec, the trading arm of Asia’s top oil refiner Sinopec, has chartered at least four crude tankers from the United States, raising shipments after attacks on Saudi Arabia’s oil facilities last weekend.
However, force majeure – forced inability to fulfil contractual obligations – has been declared by Aiteo, operator of Nigeria’s Nembe Creek Trunk Line (NCTL), which exports top grade Bonny Light crude oil.
An Aiteo spokesman who confirmed the shutdown did not give a reason for it.
The pipeline is one of two that exports Bonny Light, so the terminal is currently loading only from the Trans Niger Pipeline, a spokesman for terminal operator, Shell, told Reuters.
Monthly curtailment meetings were held in Nigeria on September 18 between producers and the Nigerian National Petroleum Corporation (NNPC), meaning that programmes would start trickling out this week.
Saudi Arabia’s defence ministry alleges that the wreckage of drones and cruise missiles at its two oil facilities prove Iranian involvement, which Iran denies.
In any case, Saudi oil minister has reassured the market that the world’s biggest oil producer could cover supplies from inventories and that production would be back by the end of September.
Other sources briefed on the attacks said Saudi Arabia will restore oil output quicker than previously thought, taking two or three weeks not months.
Reuters reports that high freight rates and a wide backwardation continued to weigh on the market on September 18, making a large overhang slow to clear.
Around 50 cargoes of October-loading West African were still available, with about 35 Nigerian, 10 Angolan and cargoes of Congolese Djeno, Ghanaian TEN and Jubilee.
“For a VLCC to Asia, freight will be $3 a barrel plus another $1 a barrel lost to backwardation – that equates to some $4 a barrel before you consider the differential,” one trader said, illustrating the heavy cost after the major Saudi outage.
