Asia’s four largest oil consumers — China, India, Japan and South Korea — have collectively bought around 43% more Nigerian crude this year compared with 2013, but have shown a declining appetite for barrels from the other African supplier Angola, according to a Platts analysis of import data.
With US imports of light, sweet West African crudes in a sharp decline thanks to its own burgeoning tight oil production, market participants have wondered which consumers are accommodating the backed-out barrels, especially as Nigerian output remains stable while Angolan is slightly lower.
US imports of Nigerian crude plummeted to an average 64,000 b/d in the first eight months of 2014, according to the latest data from the Energy Information Administration, compared with a full-year 2013 average of 239,000 b/d — a decline of over 73%.
The country imported no Nigerian barrels at all in July — for the first time on record — despite overall crude imports rising by 569,000 b/d in that month to 7.623 mil b/d, the EIA reported.
Angolan crudes landing on US shores slumped to an average of 119,000 b/d over January-August.
The average imports for all of 2013 were around 201,000 b/d, pointing to a relatively smaller decline of around 41%.
Nigerian crude production over the periods in focus has remained constant, with January-September 2014 averaging 1.95 mil b/d, according to Platts monthly surveys, same as 2013.
Angolan output slipped to about 1.67 mil b/d over January-September, from the full-year 2013 average of 1.76 mil b/d.
Meanwhile, the growing West African crude surplus has pressured the grades’ differentials.
Angola’s Nemba crude, for example, had swung to a discount of $1.91/b to Dated Brent on a year-to-date average basis as of November 14, compared with an average $0.10/b premium for all of 2013, based on Platts assessments.
Nigeria’s Qua Iboe, meanwhile, had seen its average premium over Dated Brent erode to $1.78/b from $2.70/b over the same period.
The recent drop in US imports of West African crudes presents an even bigger contrast with 2008, when the world’s largest oil consumer imported an average of around 1.42 mil b/d of Nigerian and Angolan crudes.
While the Asian giants are soaking up much more Nigerian crude this year, a closer look at their individual buying patterns reveals a fair amount of diversity: India dominates the Nigerian market, and has ramped up its intake of crudes from that supplier.
China is the biggest buyer of the acidic Angolan crudes, but its imports eased by 1% on year to around 813,500 b/d over January-September, according to Chinese customs data.
“China has not been taking more volumes this year because of the economic slowdown,” a trading source at Sonangol in Singapore told Platts in September. “But what we’ve tried to do is to market more to India as well as new areas like Thailand.”
“Asia will still be our base-load for demand. Next year we see some new production [in Angola] coming up from two or three projects and we expect to send more to Asia.” he added.
While Angolan production slipped by about 90,000 b/d over the first nine months of this year to an average of around 1.67 mil b/d, state-owned Sonangol projects it to climb to around 2 mil b/d in 2015.
Overall, China, India, South Korea and Japan collectively took 3% less Angolan crude in the first nine months of this year compared with the same period of 2013.
As a result, the respective ratio of crudes finding homes in the four countries has swung from 3.4 Angolan barrels to one Nigerian barrel in 2013 to approximately 2.3:1 so far this year.
India ratcheted up its imports of Nigerian grades over January-September 2014 by 39% from a year ago to an average of around 366,900 b/d, according to data from ship brokers compiled by Platts.