Nigeria as a nation has its place on the global stage when it comes to global oil matters. ‘If she sneezes, the global oil market would catch the flu’. Thus, she can’t be undermined in the business of global crude oil issue, notwithstanding her numerous challenges.
Nigeria is a major player in the global oil market being Africa’s leading producer as well as a significant exporter within the upstream and downstream sectors. She is the leading nation within sub-Saharan Africa with a vast oil reserve; with an estimated 37.5billion barrels.
Nigeria is equally the second-largest oil and gas producer in Africa with large oil fields onshore and offshore, connected to various processing stations and export terminals.
Nigerian crude oil as of today does hold a significant global relevance due to its high quality, particularly the Bonny Light grade, and its total contributions to the global energy market is undoubtedly an all-time high. Come to think of it, her crude oil does play a much important role in the global energy market primarily because Nigeria is a significant exporter of crude oil; with a daily average crude oil production put at 1.55million barrels per day (mbpd).
It is unarguable to say that Nigeria is a major player in the global oil stage, with a significant portion of its crude oil exports going to the international market with Europe and Asia being her primary destinations.
In terms of value, Nigeria stands as the world’s ninth biggest exporter of crude oil in the world (statista, 2022) with her total export value to Europe and Asia put approximately at 1,388.260 barrels as at December 2022. In 2024 European Union imports of crude oil from Nigeria are valued at US$17.3billion.
Exports of crude oil in 2023 are valued at $43.5billion; and as at December 2023, Nigeria exported a staggering 1,476.170 barrels of crude oil per day. So in 2023, Nigeria produced an average of 1.5million barrels of crude oil per day.
As at January 2024, Nigeria’s daily oil production increased to 1.64million barrels per day. This was due to the pragmatic efforts taken by the government of the day to push up the country’s daily barrels production.
The country’ technical potential for crude oil production is currently put at 2.24million barrels per day (mbpd) but the reality on ground of the daily crude oil production is actually put at 1.75million barrels. This is about 21.9% less of the country’s potential. That is a clear indication of the huge potentials the country boasts of in the crude oil market even at the global level.
The country’s oil production and exports contributes immensely to the global energy security by ensuring a steady supply of crude oil to major consumers,
WHY IS CRUDE OIL IMPORTANT TO THE WORLD ECONOMY?
Crude oil is a major source of energy helping to power vehicles, heating homes and generating electricity. The availability and price of crude oil on the global market obviously impact significantly on major economic activities across Europe, the West and Canada, as well as Far East Asia.
Crude oil is a key raw material for various industries, including plastics, synthetic materials, chemicals and pharmaceuticals. Any form of fluctuations in oil prices can directly affect the profitability of these industries as well as the strength in being active in the labour market supply chain.
THE NIGERIAN CRUDE
Nigerian crude oil is highly sought after due to its light and characteristics. This means that, it has low sulphur content and it is easier and less costly to refine. This ensures profitability. It makes it a preferred choice for refineries that need to meet environmental standards, and equally produce high value refined products like gasoline (petrol), diesel and jet fuel efficiently.
Nigerian crude, especially the Bonny light grade, is characterised by low sulphur content. This is a major advantage because, sulphur is a by-product of oil refining, and can cause pollution. Lower sulphur content makes refining process cleaner and more environmental friendly.
The low sulphur content and the other favourable characteristics of Nigerian crude, makes it easier and more efficient to refine. This means refineries can produce higher quality refined products at a much lower cost.
The relatively low refining cost associated with Nigerian crude contributes to higher profits for refiners, making it a competitive option in the global market.
The Nigerian crude oil equally yields a good proportion of valuable refined products, such as gasoline (petrol), diesel and jet fuel which are in high demand globally.
Thus, with the combination of high quality crude, ease of refining and a sound environmental benefit, this brand of crude opens one up for business fortunes with sure returns on investments even when global oil prices are fluctuating.