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  • Oil & Gas - News
  • Updated: April 03, 2024

Nigerian crude oil prices surge amid global supply concerns

Nigerian crude oil prices surge amid global supply concerns

Nigerian crude oil prices surged above the government's budget benchmark amid global supply concerns sparked by Ukrainian attacks on Russian refineries and escalating tensions in the Middle East.

At trading close, Nigeria's Brass River and Qua Iboe crudes fetched approximately $92 per barrel, surpassing the $89 per barrel for Brent Crude. Bonny Light traded at $91.37 per barrel.

The surge translates to an additional $13.71 per barrel in revenue for Nigeria compared to the budget assumption of $77.96 per barrel and 1.78 million barrels per day.

Despite intensified efforts against oil theft, Nigeria must meet its production target of 1.78 million barrels per day to fulfil budgetary obligations.

Worries mount over the supply of feedstock for upcoming refineries, as concerns over global oil supplies heighten. 

Ukrainian attacks on Russian refineries exacerbated supply worries, while Iran's threats of retaliation against Israel risk further disruptions in the Middle East, a vital oil-producing region.

Mexico's Pemex announced plans to halt up to 436,000 barrels per day of crude exports this month, preparing to process domestic oil at a new refinery.

In the U.S., crude inventories dropped by 2.3 million barrels last week, signalling a potential decline in oil stockpiles, the largest consumer globally.

Despite Nigerian oil commanding a premium, competition from American suppliers intensifies, with rising U.S. production challenging OPEC's dominance.

Indian refiners' reluctance to accept cargoes from sanctioned Russian tankers indicates a shift toward U.S. crude, impacting Nigerian exports to significant markets like India.

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