Nigerian crude variants are now seeking other buyers in Asia and Europe as India’s COVID-19 situation remains shrouded in uncertainty amid stringent regional lockdowns and weak domestic consumption.
S&P Global Platts reported that most Nigerian crudes were trading at close to 12-month lows. The country’s flagship grade, Bonny Light was last assessed at Dated Brent minus $0.8 per barrel, up from a recent low of minus $0.95 per barrel, but still close to the weakest it has been since May 2020.
Akpo condensate, normally a preferred grade for Indian refiners, was last assessed at Dated Brent -$2.10 per barrel, its lowest level since September 2020.
The Indian Oil Corporation last bought crude loading mid-to-late June in a tender that closed April 15, S&P Global Platts reported.
The refiner had since cut run rates across its refineries to an average of 88 per cent, company officials reportedly said on May 12.
The run rate across its nine refineries was 99 to 98 per cent in the first half of April.
“Three weeks without IOC weighs dramatically on Nigeria. It is the biggest Nigerian grades buyer,” a trader said to S&P Global Platts.
“IOC skipped the last decade of June loading window and now seem to have skipped July 1-10 also,” a second trader was quoted as saying.
India’s state-owned refiners typically issue tenders for a large proportion of their crude requirements, but with the latest wave of COVID-19 infections in the country still raging, no new tender had been issued since late April, S&P Global Platts disclosed.
Refiners such as Indian Oil Corporation, Hindustan Petroleum Corp Ltd and Bharat Petroleum Corp Ltd usually buy significant amounts of Middle Eastern and West African crudes through regular tenders.
The last such buy tender was awarded by HPCL on April 23 for crude loading from West Africa in early June, according to S&P Global Platts data.
Some of IOC’s recent purchases have included Nigeria’s Agbami, Akpo, Bonny Light and Forcados, as well as Gabon’s Oguendjo.
Meanwhile, the international crude oil benchmark, Brent, traded at $73.17 after gaining $0.48 as of 10:09pm Nigerian time on Monday.
The United States West Texas Intermediate traded at $71.21 after gaining $0.30.
Brent had been rising steadily as demand picked up in the US and Europe as lockdowns and flight restrictions eased.