EIA reports that the US has become a net crude exporter to Nigeria for first time.

In February and March the United States became an exporter of crude to Nigeria, due to a slowdown in demand for crude on the U.S. East Coast, which was caused by refinery maintenance. The Dangote refinery also increased Nigeria's need for inputs. This is according to a Tuesday note from the U.S. Energy Information Administration.

Why it's important

It is the first instance that the U.S. exported more crude to Nigeria than they imported. Nigeria was ranked ninth in the United States' crude oil imports last year.

CONTEXT Nigeria’s Dangote Oil Refinery, the largest in Africa and located just outside of Lagos, began processing crude oil in January 2024 following years of delays. According to the EIA, this year will see the refinery reach its full capacity of 650,000 barrels per day.

By the Numbers

In February, gross U.S. crude oil exports to Nigeria reached 111,000 b/d and in March 169,000 b/d. Imports dropped from 133,000 b/d to 54,000 and 72,000 respectively in February and in March.

According to the EIA, the decline in imports was largely caused by maintenance at the Phillips 66 Bayway New Jersey refinery. Imports rose later in the year, as the Bayway refinery resumed its normal operations in April and Dangote performed some unplanned maintenance.

KEY QUOTES

According to Eli Tesfaye senior market strategist at RJO Futures, this trend is more of a snapshot than a permanent realignment.

The new refinery in Nigeria, and certain issues with securing domestic supply played a part in those unique flows early this year. It is hard to predict if this volume will continue in the future, as the refinery will be looking to secure its domestic supplies and may also look at other crude grades. Giovanni Staunovo an analyst with UBS agreed. Reporting by Kavya Baliaraman

(source: Reuters)