Nigeria’s oil export market struggles as unsold cargoes mount

BY MOTOLANI OSENI

Nigeria’s oil-dependent economy is facing renewed pressure as a large volume of its crude oil exports for April and May 2025 remains unsold, threatening government revenue projections and deepening concerns in the energy sector.

More than half of the country’s planned shipments, including popular grades like Bonny Light, Forcados, Qua Iboe, and Escravos, are reportedly yet to find buyers, with the total unsold volume estimated at over 80 million barrels.

This surplus, driven by weakening global demand and growing competition, is placing Nigeria’s exports under strain at a time when foreign exchange earnings from crude are critical. Compounding the challenge is Indonesia’s recent move to shift a significant portion of its oil imports to the United States.

READ ALSO: SEC urges Nigerians to report Ponzi schemes, warns of rising fraud risks

The Asian nation, which imported over 306,000 barrels of crude per day last year, has announced plans to buy $10 billion worth of U.S. crude and LPG to avoid impending export duties and reinforce its trade surplus with the U.S.

Nigeria, which exported more than $3.8 billion worth of crude oil and gas to Indonesia in 2023, risks losing a key market as Indonesia recalibrates its sourcing strategy. Analysts believe this could also affect Angola, another top supplier to Southeast Asia, amid growing global competition and price volatility.

Despite two consecutive sessions of gains, global oil prices remain on course for weekly declines due to oversupply concerns and fragile demand. Brent crude rose to $67 per barrel, but still faces a projected 1.4 per cent weekly drop. U.S. crude, which traded at $63.21 per barrel in the last session, is on track for a 2.3 per cent decline.

Market sentiment is being shaped by faint hopes of easing tensions between the U.S. and China, while pressure from a strong dollar and OPEC+ concerns over persistent weak demand continue to weigh on prices.

OPEC+ members are reportedly considering advancing planned output increases, while geopolitical shifts—including a possible resolution to the Russia-Ukraine war and progress on Iran’s nuclear negotiations—could further flood global markets with crude.

With international dynamics evolving rapidly, Nigeria’s oil sector faces a challenging path ahead, as unsold cargoes, changing trade flows, and softening prices combine to undercut one of its most vital economic lifelines.