Petroleum minister says Buhari has persuaded US to resume buying Nigerian crude oil

MINISTER of state for petroleum Dr Ibe Kachikwu has revealed that the US is likely to resume buying Nigerian crude oil in 2016 following overtures to Washington from President Muhammadu Buhari when he visited there this year.

 

Historically, the US used to be the largest buyer of Nigerian crude oil but it has gradually reduced its purchases in 2015 did not buy even one barrel. This prompted Nigeria to look for new buyers and during 2015, India became the country's biggest oil customer, purchasing as much as 745,000 barrels per day.

 

India has subsequently gradually become one of Nigeria's most important trading partners, with bilateral commerce between the two countries rising to $10bn, with the total Indian investment in Nigeria's economy valued at $16.6bn. Other major buyers of Nigerian oil include Brazil, who is the second biggest customer, replacing traditional trading partners like the US and UK.

 

However, earlier this year, President Buhari visited the US where he held bilateral talks with President Barack Obama, during which the matter was discussed. According to Dr Kachikwu, this should soon result in the US resuming its purchases of Nigerian oil, adding that Washington had indicated its interest in buying very limited quantities for now.

 

Dr Kachikwu, who was in Kaduna to inspect the status of repair works on the refinery there, noted that irrespective of the renewed interest from the US, Nigeria was still diversifying its crude oil trading destinations deeper into Asia and other parts of the world. When the US stopped buying Nigerian oil, China became the country's major buyer for a while until India took over.

 

“The US actually being back into the sales of crude market obviously will impact on prices but what you find is that the volume of exports that the US intends to do is really minimal because there is a lot of local internal consumption and strategically they are still reaching out to buy a couple of Saudi barrels. In fact they are opening up to buy a couple of Nigerian barrels,” Dr Kachikwu added.

According to the minister, it would be technically wrong to say that the US had in the past stopped buying the Nigerian crude since three of the major oil producing companies in the country are US-based and have up to a 40% share of Nigeria’s output. He added that these companies buy Nigerian crude and supply it to their own refineries.