Europe’s Oct exports to Nigeria fall

Europe’s base oils exports to Nigeria fell to a four-month low in October, highlighting the growing volatility of the West African country's supply sources.

The slowdown coincided with a pause in shipments from the US to Nigeria for a second month in October. The drop in exports from both regions cut their total exports to Nigeria to a 14-month low.

The trend of more volatile flows from those markets to Nigeria is likely to repeat itself over the coming months.

Such a scenario boosted the attraction for buyers in the West African country to line up alternative supply options from markets like the Mideast Gulf.

Supply in the Mideast Gulf faced the prospect of rising as more shipments of Russian origin moved to that region.

Total base oils exports of around 6,000t from Europe to Nigeria in October fell from more than 18,000t the previous month, government data showed. The volume was the lowest since June.

Almost all the supplies originated from the UK.

The September volume had got a boost from a large and rare shipment from Greece to Nigeria. There were no such one-off arbitrage shipments in October.

Shipments earlier in the year had got support from a swathe of cargoes from the US.

Those shipments slowed sharply in the second half of the year as more competitive prices for European supplies made the arbitrage from the US harder to work.

Russia had previously been a key source of supplies for Nigeria, with regular shipments from the Baltic region.

Such shipments dwindled sharply since the second quarter of the year. They are unlikely to resume from that region any time soon.

Surplus Group I base oils supply from Europe is also likely to tighten from the first quarter of next year. A seasonal rise in demand typically coincides with plant maintenance work throughout the region.

The loss of Russian base oils supplies for the European market is set to tighten availability further.

The prospect of such a scenario boosted the incentive for Nigerian buyers to seek and lock in alternative supply sources.