Nigeria’s crude oil, which has been struggling to sell in recent months, may suffer further setbacks in the global market following the lifting of the ban on the United States oil exports.
The US Congress had on Friday approved the lifting of the ban as part of a $1.1tn spending bill, which included a provision that would allow the export of US crude for the first time in more than 40 years. The bill was later signed by President Barack Obama.
Nigeria recently lost its biggest customer, the US, which now buys only a small amount of Nigerian crude oil due to the dramatic rise in domestic shale production.
The growth in US light sweet crude oil production has resulted in a sizable decline in the country’s imports of crude grades of similar quality, such as Nigeria’s.
The sustained decline in crude oil prices since June 2014 has exacerbated the dwindling fortunes of the Nigerian crude, with the nation’s crude differentials trading at a 10-year low.
A lot of Nigerian crude is said to be currently floating on ships with a significant amount finding home in storage tanks rather than in refineries as a result of the supply glut in the global market, which is dominated by largely by light sweet crudes.
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