Nigerian crude is attracting increased interest from European traders and refiners as supply disruptions affecting Saudi Arabia create gaps in the region’s oil market.
Saudi Arabia has reportedly informed some European buyers that crude shipments scheduled for loading in late September could be delayed or cancelled. The development followed drone attacks that forced the closure of the country’s 7 million-barrel-per-day East-West pipelines on September 11.
The pipeline transports crude over roughly 1,200 kilometres from Saudi Arabia’s eastern oil fields to the Red Sea port of Yanbu and has served as a major alternative route for exports when shipments through the Strait of Hormuz face disruptions.
Saudi Arabia has blamed Iraqi militia groups for the attacks, while Yemen’s Houthi movement has claimed responsibility for related strikes on Saudi energy facilities. Saudi Aramco has not commented on the reported cancellation of the cargoes.
The supply uncertainty is pushing European buyers to explore alternative sources of crude, including barrels from West Africa.
“This is exactly the kind of dislocation that sends buyers hunting outside their usual supply book,” said one London-based crude trader who handles term contracts for a European refiner. “Nobody wants to be the plant that runs dry because they waited for Yanbu to reopen.”
Brent crude rose as much as 3.7 percent to above $105 per barrel, while physical crude cargoes in Europe traded at significantly higher levels, with dated Brent reaching around $122 and North Sea Forties climbing as high as $136.75, according to traders.
Market experts said the premium in European crude markets could make Nigerian grades increasingly attractive to buyers.
Bonny Light, Nigeria’s benchmark light sweet crude, traded above $115 per barrel over the weekend, following the broader rise in dated-Brent-linked crude prices.
“Nigerian grades carry a natural advantage right now because the barrels never touch the Red Sea or Hormuz to begin with,” said an energy analyst with a Lagos-based consultancy who tracks West African crude flows. “When Gulf routes get risky, the freight and insurance calculus shifts in favour of anything that loads in the Atlantic Basin.”
Nigeria’s advantage lies partly in both the quality of its crude and its location outside the areas currently affected by security concerns. European refiners are therefore examining supplies from alternative producers as they seek to maintain operations.
Poland’s Orlen, which obtains about 40 percent of its crude from Saudi Aramco, has reportedly begun seeking alternatives after being identified among buyers potentially affected by delayed or cancelled September shipments.
Traders said the company has sought offers for North Sea grades including Grane, Johan Sverdrup and Johan Castberg, as well as US WTI Midland and Kazakhstan’s CPC Blend.
Orlen declined to discuss specific commercial transactions but said it routinely adjusts its supply portfolio to maintain uninterrupted refinery operations.
“Adjusting and optimising purchase volumes is a standard, ongoing part of the Orlen Group’s operations, driven by both current production needs and changing market conditions,” an Orlen spokesperson told Reuters.
Nigeria’s major crude streams continue to provide substantial export volumes. Bonny terminal remains the largest single stream, with approximately 320,000 barrels loaded daily, followed by Forcados at about 317,000 barrels, Qua Iboe at roughly 171,000, Escravos at around 131,000 and Bonga at approximately 92,500 barrels per day.
Despite the improved pricing environment, the disruption has not yet translated into a significant increase in Nigeria’s crude production.
“Higher prices are welcome, but this isn’t a production story for Nigeria yet, it’s a pricing story,” the Lagos-based analyst said. “The barrels we have are getting a better bid. Whether that turns into meaningfully higher volumes depends on how long Saudi Arabia’s export routes stay compromised.”
