In impact of the renewed bombing of oil installations by militants in the Niger Delta has started affecting international trade as India, US and Indonesia have started turning away from the Nigerian oil market.
According to Daily Trust, the reduced oil output and uncertainty about delivery has started making buyers reluctant, thereby limiting the prices Nigeria can get for its oil .
Force majuere, a legal that allows companies to cancel or delay deliveries due to unforeseen circumstances has been implemented in four of Nigeria’s oil grades – including the largest stream, Qua Iboe.
Last month, India’s HPCL was forced to cancel a vessel it chartered to carry two million barrels of crude oil due to the Qua Iboe force majeure.
Reuters also reported that India’s state-run Indian Oil Corp. Ltd, a major buyer of Nigerian grades over the past year, had stated in its recent tenders that it would not take grades under force majeure with Qua Iboe going off the list in its latest tender.
Olivier Jakob, the managing director of PetroMatrix in Switzerland told Reuters: “Not everybody wants to be caught up in that, so they will avoid it. The refineries will walk away from it”.
Another frequent buyer, Indonesia’s Pertamina, also chose not to buy Nigerian grades in its recent tenders, choosing to go for Congolese Coco, Angolan Girassol and Saharan Blend from Algeria instead.
According to traders, Pertamina shifted its preferences since the bombing of oil installations escalated although Daniel Purba, the senior vice president of ISC Pertamina, told Reuters by text message that Pertamina was “monitoring” Nigeria, but “currently it’s still not affecting crude purchases.”