By John Ikani
American crude oil, specifically WTI Midland, has overtaken West African oil, including Nigeria’s, as the primary flexible supplier for markets across the Atlantic Basin and Asia, according to energy consultancy Renaissance Energy Advisors.
Since the US lifted its ban on crude oil exports in 2015, WTI Midland shipments have skyrocketed by as much as 3.5 million barrels daily, the consultancy estimates. Europe absorbed about 47% of these exports last year, while Asia took in 43%.
“As US crude exports have grown, WTI Midland – a light sweet crude – has emerged as the world’s largest freely-traded grade by output and volume,” the London-based firm said in a report.
Historically, West Africa, including Nigeria, held the crucial position of a swing supplier between Europe and Asia, offering flexible oil supplies that could be sent to either region based on demand.
However, the surge in American crude has shifted this role to WTI Midland. This shift is intensified by Africa’s underperforming oil production.
Adding to the changes, Nigeria’s new Dangote mega-refinery is now processing more domestic crude, while also importing WTI Midland, according to the consultancy. This has further reduced the amount of Nigerian crude available for export.
The European Union’s ban on Russian oil has also helped WTI Midland replace Urals as the main oil type for northwest European refineries.
Moreover, including WTI Midland in the grades that set the price of Dated Brent, a major oil benchmark, has boosted the US Gulf Coast’s importance in global oil pricing.
Renaissance Energy Advisors anticipates US crude exports to keep rising, reaching nearly 6 million barrels daily by 2030. This growth will likely reshape global oil markets and alter the traditional roles of suppliers like Nigeria.
