Crude oil from Angola, Chad and Cameroon is rising in value over Nigerian grades, as refineries in Europe shape up to meet new International Maritime Organisation rules for ships to cut the sulphur content in their fuel from 3.5 to 0.5 per cent.
Despite Nigeria’s Bonny light being a sweet oil brand, research firm, ClipperData, says 75 per cent of the type of petroleum that will be consumed by seagoing vessels from January 1, 2020, will come from neighbouring states outside the hydrocarbon-dependent Nigerian economy.
Angolan blend Dalia, Chadian variant Doba and Cameroonian gradient Lokele were described by Reutersas the “Holy Grail,” in the new low sulphur fuel future.
Angolan state oil company, Sonangol, is already selling its blends at prices higher than the benchmark Brent crude price.
Traders informed the news agency that Dalia went from a 60 cent discount to a $2.50 premium from the beginning of 2018 till the beginning of this month.
Sonangol was offering Dalia at $3.00 above Brent and similar grade Girassol at $3.20, according to the traders, who sell Angolan crude.
The Chadian blend, Doba, has risen to 75 cents above dated Brent this month from 60 cents below at the beginning of 2018 as well.
“Outages from Iran and Venezuela after United States sanctions, ramped up Chinese demand and the IMO rules around the corner – all these factors have been quite supportive for medium to heavy sweet grades,” the seller told Reuters.
Experts say the high prices are coming on the back of outages in Iran and Venezuela and the new IMO rule.
Based on Nigeria’s export programme for October, its two main brands Bonny Light and Qua Iboe, are expected to sell at $2.50 above Brent price.