American crude grade WTI Midland has supplanted West African oil, including Nigeria’s, as the primary swing supplier for markets spanning the Atlantic Basin to Asia, according to consultancy Renaissance Energy Advisors.
Thank you for reading this post, don't forget to subscribe!Exports of WTI Midland have surged by as much as 3.5 million barrels per day since the US lifted a ban on crude exports in 2015, estimates from the consultancy show. Last year, about 47% of these exports went to Europe, while 43% were directed to Asia.
“As US crude exports have grown, WTI Midland – a light sweet crude – has emerged as the world’s largest freely-traded grade by output and volume,” the London-based consultancy stated in a note to clients seen by Bloomberg News.
Previously, West Africa, including Nigeria, played a crucial role as the swing supplier between Europe and Asia, providing spot barrels that could be traded east or west depending on regional demand. However, the soaring supplies of American crude have shifted this role to WTI Midland. This trend has been exacerbated by Africa’s underperforming upstream sector.
Additionally, the startup of Nigeria’s Dangote mega-refinery has resulted in more local processing of Nigerian crude, with the refinery also importing WTI Midland, according to the consultancy. This development has further reduced the availability of Nigerian crude for export.
The European Union’s embargo on Russian crude has also contributed to WTI Midland effectively replacing Urals as the baseload grade for northwest Europe’s refiners. Furthermore, WTI Midland’s inclusion in the grades that determine the price of Dated Brent, a significant oil benchmark, has elevated the US Gulf Coast’s position as a key center for oil pricing.
Renaissance Energy Advisors expect US crude exports to continue growing, reaching almost 6 million barrels per day by 2030. This expansion is likely to further influence global crude markets and impact the traditional roles of suppliers like Nigeria.
