/

Oil Price Crashes, As Vladimir Putin Seeks Nigerian Buyers For Russian Oil

1 min read

Nigeria has become one of the major destinations for Russian oil products, as European Union embargo on Vladimir Putin’s country disrupt Moscow’s supply chains. And in an effort to prevent the restriction from affecting its oil earnings deeply, Russia is looking for buyers in Africa.

Oil products like gasoline and naphtha are finding their way into Africa’s largest economy from Russia, more than better, despite the cost of shipping the products into the African continent, researchers at Refinitiv have disclosed in a data first reported by Reuters on Thursday.

The choice of increasing its volume to Nigeria, Morocco Senegal, Sudan, Ivory Coast and Togo is to ensure Russia maintains its market share in the global oil industry. Replacing weak demand from EU with African market has also led to the latter importing cheaper oil products, as Putin tries to avoid waste.

READ ALSO  African Development Bank approves $150 million Regional Trade Finance Unfunded Risk Participation Agreement facility for Eastern and Southern African Trade & Development Bank (TDB)

In recent months, it was gathered that over 200,000 tonnes of gasoline and naphtha have been shipped from Russia to African market, with Senegal and Togo accounting for the highest shipments of diesel, as volumes hit one million tonnes year-to-date, against the 0.8 million tonnes reported the corresponding period in 2021.

“Africa and the Middle East seem to be main options for Russian oil product suppliers, so we expect more shipments there in the second half of the year as EU embargo gets closer” Reuters quoted a trader involved in Russian oil product trading.

With Russia’s gaze on Nigeria and African market, United States and EU will see competition for their market share in the continent intensify, considering Putin is offloading oil products at a cheaper rate compared to the export price prior to the western sanctions and EU full scale embargo on Russia’s oil in European market, which is set to take off by end of this year.

READ ALSO  CBN's MPR Hike Will Worsen Economic Challenges, Lead To Jobs Losses - Peter Obi

The competition will also extend to the Middle East and Asian, where buyers are increasing demand for Russian oil products to take advantage of the cut in price and store cheaper commodities amid rise in global oil price.

As at the time of filing this report, oil price is down -1.08%, trading at $110.5 per barrel, however, year-to-date, the commodity has appreciated by 42 06%, as the war between Russian and Ukraine affect global market, and EU ban on Putin’s oil causes disruption in supply chain and threatens reduction in global output.

READ ALSO  Why CBN's 22.75% MPR Hike Can't Tame Inflation - CCPE
+ posts