Europe’s Dec exports to Nigeria rise

Europe’s base oils exports to Nigeria rose to a three-month high in December as surplus supply and lower prices boosted buying interest.

Additional surplus supplies from Europe moved to Nigeria in early January.

Base oils exports of more than 12,000t to Nigeria in December rose from less than 3,700t the previous month, EU data showed. Almost all the supplies originated from Italy.

The availability of surplus shipments at year-end provided a respite for Nigerian buyers that had faced a swathe of challenges over the past year to secure sufficient supplies.

Many of those challenges remained, including the country’s depreciating currency and tight foreign currency reserves.

The country was set to face an additional challenge this year with securing base oils supplies of Russian origin.

The steady demand from Nigeria also provided European refiners with a convenient outlet to clear their surplus volumes.

Weak demand in Europe had complicated refiners’ ability to clear supplies within the region during the final months of last year.

European base oils prices fell sharply in response to the persistent surplus.

European prices remained weak in the early weeks of this year as blenders held off replenishing stocks.

Prices were likely to reflect more the impact of the removal of surplus shipments to markets like Nigeria when regional demand revives.

The prospect of firmer prices and tighter supply in Europe over the coming months would further complicate Nigerian buyers’ ability to cover their lubricant feedstock requirements.

Such a scenario would follow a similar pattern to last year.

European base oils exports of little more than 49,000t in first-half 2022 were the lowest for that six-month period in six years.

Exports recovered to more than 59,000t in the second half of the year. Even that volume was lower than usual.

Total exports of less than 110,000t to Nigeria in 2022 fell in response to their lowest since 2016.