Connect with us


Nigerian, others’ crude may add to glut in Asia soon



Asian refiners are stepping up purchases of cheap Nigerian and other West African crude for September delivery after prices hit multi-year lows, threatening to increase a supply glut that is blunting the appetite for Asia-Pacific crude.

Weak Asian demand and high shipping costs have kept buyers away from West African cargoes in recent months, but a large backlog of oil has now pushed down prices, tempting Asian buyers back into the market, traders said.

It was learnt that move will put further pressure on crude exporters Malaysia, Indonesia, Vietnam and Russia, which have already seen price differentials for their grades fall as refiners facing poor profits from processing crude into oil products such as gasoline and diesel reduce buying.

“West African producers are scrambling to place their crude,” said a trader with a regular Asian buyer of oil from the region.

“The crude should start to move to Asia soon. When that happens, we’ll see downward pressure on the Asia-Pacific grades,” the trader said.

An overhang of West African crude has grown as a shale boom has curbed exports to the United States, along with weak European refining margins and soft Asia demand.

Asian buyers also switched to Latin America and other regions as a global glut in crude supply caused a slide in differentials for grades from multiple regions. West African crude oil exports to Asia are expected to hit a one-year low this month.

However, West African crude differentials have fallen against Brent, the European benchmark, while Brent has also come off in recent weeks, making West African crude more attractive for Asian refiners relative to the Middle East.

Brent’s premium to Dubai swaps this week fell to its lowest in nearly four years.
Asian buyers are turning back to West African oil, and cargoes are selling at a faster rate for September than for the previous two months.

The purchases comes as Asian producers get ready next week to start marketing barrels due to load in October. But by then, traders said tankers carrying cheap crude from producers such as Nigeria and Angola will start arriving in Asia after their 30 to 40 days journey.

“Demand is still not great, but it came to a point where they feel it’s ok to move,” a West African crude oil trader said.

In a rare move, Taiwan’s Formosa Petrochemical last week bought a cargo of Angolan Girassol crude, which will be delivered on October 1-20, suggesting to some that prices may have bottomed.

“The deal gives sellers more steel and buyers a sense that they may not be able to rely on getting a further 50 cent discount for cargoes,” a trader said. Still, some traders say that despite improving economics, high freight rates are limiting the flow to Asia.

Day rates on the largest crude tankers carrying crude from West Africa to Asia could fall further, after coming off a spike last month.

“The market has slipped, and there is scope for rates to fall further,” a source with a large ship owner said.

However, the longer term outlook for light sweet Nigerian oil moving to China may be limited by refinery upgrades in the world’s second largest consumer of oil.
More modern refineries are able to take heavier, higher sulphur oil that is cheaper, taking away another source of demand for Nigerian crude, whose differentials have already fallen to their lowest in five years, with competition from US crude hammering demand.

“There’s a new world order now. I think differentials could fall to flat, or even negative,” a trader said, referring to Nigeria’s benchmark Qua Iboe crude, which is currently at around 80 cents above dated Brent, it’s lowest since 2009.

—-International Trade Monitor


Continue Reading
Advertisement Simply Easy Learning

Leave a Reply

Your email address will not be published. Required fields are marked *

14 − eleven =


WAIVER CESSATION: Igbokwe urges NIMASA to evolve stronger collaboration with Ships owners



…Stresses the need for timely disbursement of N44.6billion CVFF***

Highly revered Nigerian Maritime Lawyer, and Senior Advocate of Nigeria (SAN), Mike Igbokwe has urged the Nigeria Maritime Administration and safety Agency (NIMASA) to partner with ship owners and relevant association in the industry to evolving a more vibrant merchant shipping and cabotage trade regime.

Igbokwe gave the counsel during his paper presentation at the just concluded two-day stakeholders’ meeting on Cabotage waiver restrictions, organized by NIMASA.

“NIMASA and shipowners should develop merchant shipping including cabotage trade. A good start is to partner with the relevant associations in this field, such as the Nigeria Indigenous Shipowners Association (NISA), Shipowners Association of Nigeria (SOAN), Oil Trade Group & Maritime Trade Group of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA).

“A cursory look at their vision, mission and objectives, show that they are willing to improve the maritime sector, not just for their members but for stakeholders in the maritime economy and the country”.

Adding that it is of utmost importance for NIMASA to have a through briefing and regular consultation with ships owners, in other to have insight on the challenges facing the ship owners.

“It is of utmost importance for NIMASA to have a thorough briefing and regular consultations with shipowners, to receive insight on the challenges they face, and how the Agency can assist in solving them and encouraging them to invest and participate in the maritime sector, for its development. 

“NIMASA should see them as partners in progress because, if they do not invest in buying ships and registering them in Nigeria, there would be no Nigerian-owned ships in its Register and NIMASA would be unable to discharge its main objective.

The Maritime lawyer also urged NIMASA  to disburse the Cabotage Vessel Financing Fund (CVFF)that currently stands at about N44.6 billion.

“Lest it be forgotten, what is on the lips of almost every shipowner, is the need to disburse the Cabotage Vessel Financing Fund (the CVFF’), which was established by the Coastal and Inland Shipping Act, 2003. It was established to promote the development of indigenous ship acquisition capacity, by providing financial assistance to Nigerian citizens and shipping companies wholly owned by Nigerian operating in the domestic coastal shipping, to purchase and maintain vessels and build shipping capacity. 

“Research shows that this fund has grown to about N44.6billion; and that due to its non-disbursement, financial institutions have repossessed some vessels, resulting in a 43% reduction of the number of operational indigenous shipping companies in Nigeria, in the past few years. 

“Without beating around the bush, to promote indigenous maritime development, prompt action must be taken by NIMASA to commence the disbursement of this Fund to qualified shipowners pursuant to the extant Cabotage Vessel Financing Fund (“CVFF”) Regulations.

Mike Igbokwe (SAN)

“Indeed, as part of its statutory functions, NIMASA is to enforce and administer the provisions of the Cabotage Act 2003 and develop and implement policies and programmes which will facilitate the growth of local capacity in ownership, manning and construction of ships and other maritime infrastructure. Disbursing the CVFF is one of the ways NIMASA can fulfill this mandate.

“To assist in this task, there must be collaboration between NIMASA, financial institutions, the Minister of Transportation, as contained in the CVFF Regulations that are yet to be implemented”, the legal guru highlighted further. 

He urged the agency to create the right environment for its stakeholders to build on and engender the needed capacities to fill the gaps; and ensure that steps are being taken to solve the challenges being faced by stakeholders.

“Lastly, which is the main reason why we are all here, cessation of ministerial waivers on some cabotage requirements, which I believe is worth applause in favour of NIMASA. 

“This is because it appears that the readiness to obtain/grant waivers had made some of the vessels and their owners engaged in cabotage trade, to become complacent and indifferent in quickly ensuring that they updated their capacities, so as not to require the waivers. 

“The cessation of waivers is a way of forcing the relevant stakeholders of the maritime sector, to find workable solutions within, for maritime development and fill the gaps in the local capacities in 100% Nigerian crewing, ship ownership, and ship building, that had necessitated the existence of the waivers since about 15 years ago, when the Cabotage Act came into being. 

“However, NIMASA must ensure that the right environment is provided for its stakeholders to build and possess the needed capacities to fill the gaps; and ensure that steps are being taken to solve the challenges being faced by stakeholders. Or better still, that they are solved within the next 5 years of its intention to stop granting waivers”, he further explained. 

Continue Reading


Breaking News: The Funeral Rites of Matriarch C. Ogbeifun is Live



The Burial Ceremony of Engr. Greg Ogbeifun’s mother is live. Watch on the website: and on Youtube: Maritimefirst Newspaper.

Continue Reading


Wind Farm Vessel Collision Leaves 15 Injured



…As Valles Steamship Orders 112,000 dwt Tanker from South Korea***

A wind farm supply vessel and a cargo ship collided in the Baltic Sea on Tuesday leaving 15 injured.

The Cyprus-flagged 80-meter general cargo ship Raba collided with Denmark-flagged 31-meter wind farm supply vessel World Bora near Rügen Island, about three nautical miles off the coast of Hamburg. 

Many of those injured were service engineers on the wind farm vessel, and 10 were seriously hurt. 

They were headed to Iberdrola’s 350MW Wikinger wind farm. Nine of the people on board the World Bora were employees of Siemens Gamesa, two were employees of Iberdrola and four were crew.

The cause of the incident is not yet known, and no pollution has been reported.

After the collision, the two ships were able to proceed to Rügen under their own power, and the injured were then taken to hospital. 

Lifeboat crews from the German Maritime Search and Rescue Service tended to them prior to their transport to hospital via ambulance and helicopter.

“Iberdrola wishes to thank the rescue services for their diligence and professionalism,” the company said in a statement.

In the meantime, the Hong Kong-based shipowner Valles Steamship has ordered a new 112,000 dwt crude oil tanker from South Korea’s Sumitomo Heavy Industries Marine & Engineering.

Sumitomo is to deliver the Aframax to Valles Steamship by the end of 2020, according to data provided by Asiasis.

The newbuild Aframax will join seven other Aframaxes in Valles Steamship’s fleet. Other ships operated by the company include Panamax bulkers and medium and long range product tankers.

The company’s most-recently delivered unit is the 114,426 dwt Aframax tanker Seagalaxy. The naming and delivery of the tanker took place in February 2019, at Namura Shipbuilding’s yard in Japan.

Maritime Executive with additional report from World Maritime News

Continue Reading
ADEBAYO SARUMI: Doyen of Maritime Industry Marks 80th Anniversary, Saturday 

Editor’s Pick