Europe's Sept exports to Nigeria rise

Europe’s base oils exports to Nigeria surged in September to a six-month high as rising surplus supplies and lower prices boosted demand from the West African country.

The rebound in exports from Europe contrasted with a pause in shipments from the US to Nigeria for the first time in almost two years.

The contrasting trends reflected the growing surplus availability in Europe and the impact of those shipments on arbitrage opportunities for supplies from the US.

Signs of a pick-up in shipments from US to Nigeria this month suggested prices had been adjusted to levels that were now competitive compared with supplies from Europe.

Europe’s base oils exports of more than 18,000t to Nigeria in September rose from less than 8,000t the previous month, EU data showed.

The volume was the highest since March and second highest since the beginning of last year.

Europe’s exports to Nigeria had fallen sharply during the second quarter of the year especially because of unexpectedly tight supply.

Surging European base oils prices in response to the supply tightness compounded the slowdown.

A wave of shipments from the US filled the shortfall during that time.

Shipments from the US to Nigeria are typically more irregular because their prices are less competitive than supplies from Europe or Russia.

That more typical dynamic revived in the third quarter as European supply tightness switched to surplus as regional base oils production rose and lube demand fell.

Europe’s base oils exports to Nigeria rose to more than 36,500t in the three months to end-September.

The volume was up from less than 13,000t during the second quarter and closer to more typical quarterly volumes in recent years.

Nigeria provided a valuable outlet for producers as they sought to clear their surplus supplies and limit pressure on regional prices.

The September shipments included a large and rare cargo from Greece.

The rise in European shipments to Nigeria at competitive prices dampened interest in supplies from the US.

US exports to Nigeria of little more than 15,000t in the third quarter fell from more than 30,000t during the three months to end-June and more than 50,000t in the first quarter of the year.

Those large volumes contrasted with total exports of less than 17,000t in all of 2021.

The more limited arbitrage opportunities to Nigeria boosted the importance of the Latin American market for US producers to clear surplus volumes.

A swathe of arbitrage shipments from Asia-Pacific and Mideast Gulf moved to that region in recent months.