NIGERIAN petroleum officials are desperately searching for crude oil buyers after China decided to cut back on its purchases of Bonny Sweet Crude and purchase heavier and cheaper oils which it can refine at lower costs.  

Low in sulphur, Sweet Crude, which Nigeria produces used to be highly sought after because it is environmentally friendly, making it more expensive. However, China has a lot of complex and sophisticated refineries that can produce middle distillates by distilling heavy crude oil, making the refiners much better margins. 

Taking advantage of falling oil prices, China is buying less from Nigeria and going for the cheaper heavier crude oils, leaving the country with the need to find new buyers. China is the world's second largest consumer of crude oil and now that the US is no longer purchasing Nigerian oil as it has moved to shale production, the Nigerian National Petroleum Corporation (NNPC) has a huge vacuum to fill. 

According to data from the US Energy Information Administration (EIA), China likes crude oil that is heavy and sweet, as it fits the appetite of its refineries that produce a lot of fuel oil to keep its industrial and manufacturing economy running. Consequently, China currently ignores Nigerian crude, as its demand for light sweet crude oil is very limited. 

In 2014, about 45% of Nigerian crude exports went to Europe, according to the EIA and this is likely to increase. However, the NNPC has as dilemma as a lot of European economies are struggling and Nigeria needs to find demand in countries that are growing, particularly in Asia. 

Until about seven years ago, the US, which remains the largest oil consumer in the world, used to buy more than 1m barrels f light sweet Nigerian crude oil a day, accounting for almost 50% of exports. In 2014, however, only 3% of Nigerian exports went to the US, according to the same data published by the EIA. 

US shale oil is said to be extremely similar in quality to light sweet Nigerian crude oil and as more and more shale basins are discovered, the US needs less oil from Nigeria. Last year, there were six weeks in a row starting from early July during which the US did not import a single barrel of Nigerian crude oil. 

This shale revolution has had a profound impact on the makeup of the US import market, which has, by extension, greatly altered the direction of crude flows both within Europe and to Asia. At the moment, India is the largest buyer of Nigerian crude but demand is slightly on the wane as its demand for Latin American crudes is growing sharply.
India is also the largest buyer of Venezuelan crudes and with refineries getting more and more complex in the sub-continent, Indian demand for light sweet crudes is expected to tail off. The world’s largest refinery complex situated in Jamnagar in the western state of Gujarat in India, operated by Reliance, runs primarily on heavy crudes, dominated largely by oils from the Middle East and Latin America.