Offer prices for West African grades remained high but have not ramped up significantly despite tightened U.S. sanctions on Iranian oil, which will leave top buyers India and China looking for replacement barrels.
Shell confirmed that force majeure remains in place on exports of Bonny Light after the Nembe Creek Trunkline was closed because of a leak on Monday — its second outage in a week and third this year.
Nigeria is well placed to benefit from the looming exit of Iranian crude from global markets, though major buyer India will probably need to replace only 100,000 barrels per day (bpd).
Qua Iboe was still being offered at a relatively high price of dated Brent plus $2.50 for June, driven up by the Asian need to replace Iranian crude and last week’s unexpected drop in U.S. crude oil and gasoline stockpiles.
The shortage is expected to boost lighter West African grades ahead of the summer driving season.
A VLCC chartered by Marathon was carrying Nigerian Bonga to the United States. European buyers also were heard to be showing strong interest in Nigerian oil, given the relatively high gasoline cracks and an unusually low North Sea export programme because of maintenance.