West African Oil Struggles to Find Buyers as Global Surplus Builds

By Naija Enquirer Staff

West African crude oil sellers are struggling to secure buyers for up to 26 December- and January-loading cargoes amid stiff competition from cheaper and more readily available alternative supplies, traders and analysts have said.

Analysts noted that the growing volume of unsold Nigerian and Angolan crude reflects a wider global oil market surplus, which has weighed heavily on prices. This surplus contributed to selling pressure in international futures markets, pushing Brent crude below $60 per barrel this week, its lowest level since May.

“The overhang of West African cargoes partly reflects the broader global crude supply surplus emerging in the first quarter,” said Victoria Grabenwoger, an analyst at energy analytics firm Kpler.

Unsold Cargoes Mount

According to traders, about 20 million barrels of Nigerian crude scheduled for December and January loading remained unsold as of Thursday. Angola’s December–January programme was also reported to have between five and six cargoes still available.

The unusually high number of unsold cargoes has slowed the start of trading for February loadings, despite Angola already releasing its loading schedules and term nominations.

Market estimates earlier in the week placed the combined unsold volumes for Nigeria and Angola as high as 40 million barrels.

Shifting Buying Patterns

OilX analyst Francisco Gutierrez attributed the situation to a mix of seasonal softness and shifting global buying patterns.

“Current market softness appears to be partly seasonal and partly due to shifting buying patterns in response to freight costs and alternative supply options,” he said, adding that Angolan January trade is running about 20 per cent behind its long-term average pace.

Analysts said China, the world’s largest commodities buyer, has increasingly turned to cheaper or closer alternative crude grades, further reducing demand for West African oil.

Competition from Other Regions

Supplies from the Middle East are displacing medium and heavy West African grades in Asia, supported by lower official selling prices for January and shorter shipping distances.

India’s crude imports from Russia have also remained strong despite tighter Western sanctions, pushing medium-heavy West African crudes out of the market. Meanwhile, lighter West African grades are facing competition from Argentina and Brazil, traders said.

Dangote Refinery Impact

Nigeria has also been forced to market more crude following reduced intake by Africa’s largest refinery, the 650,000 barrels-per-day Dangote Refinery, which is scheduled to undergo maintenance in January.

Analysts say unless global demand strengthens or supply tightens, West African crude producers may continue to face pricing pressure and slow sales in the coming months.