Nigeria’s crude stranded despite discounted at $10 per barrel

The crisis in the global oil market seems to be hitting Nigeria harder, and to make matters worse, it has become more difficult to sell the oil, even at ridiculously low rates.

Brent crude drops to $25, oil demand drops by about 10% of world’s consumption, Brent Crude Oil hits $26, as Nigeria’s Sweet Crude demand falls, Oil price pushes up before OPEC meeting, Asian equity markets mixed, NIGERIA OIL: Darker days ahead as Brent falls below production cost

There seems to be no respite for the global oil market crisis, as it keeps getting exacerbated by several factors, one of them being the global slump in crude oil prices which continues unabated.

The crisis in the global oil market seems to be hitting Nigeria harder since the country’s economy is largely dependent on crude oil proceeds. To make matters worse, it has become more difficult to sell the oil, even at ridiculously low rates.

Nigeria, which mostly sells light crudes that are low in sulfur, lacks the space to store unsold crude. This situation is not helped by the high cost of hiring ships for supplies since many tankers are being used as floating storage.

According to Bloomberg, two of Nigeria’s crude oil grades, Bonny Light and Qua Iboe, will be selling at discounts of $3.95 and $3.92 respectively to dated Brent crude in May.

It was even reported that in the thick of the market crisis in April, with the low demand and storage crisis, some of the Nigerian crudes was sold at a discount of about $5 per barrel. Some of the analysts believe that the very low prices might still not be enough for the country to sell its excess cargoes, as about 30 out of the 65 May loading cargoes are still unsold.

The oil market has been so negatively impacted by the coronavirus pandemic, that about 35 million barrels a day of crude oil demand have been lost. Even the output cuts by OPEC+ and top oil-producing countries have not stopped the slide in the global oil market.