Nigerian oil exports are still facing the repercussions of France’s two-month-old strikes against the regulation to raise the retirement age, without response from the French government.
France’s strikes coincide with the seasonal maintenance season for refineries in most European countries, which contributed to increasing pressure on Nigeria’s oil exports, according to Bloomberg.
Nigerian oil exports are struggling to find new buyers for cargoes, due to ongoing French refinery strikes since February (2023), according to the specialized energy platform.
French ports are filled with oil tankers coming from Nigeria, Libya, Italy and America, waiting for the signal to unload and load since February and March, but to no avail, with refineries continuing to participate in the wave of successive unrest in the country.
14 million barrels stuck
The volume of oil accumulated in French ports reached nearly 14 million barrels as of March 28, 2023, forcing most tankers to divert to other regions in search of alternative purchase offers, according to Bloomberg.
France’s strikes led to a shortage of oil derivatives in 17% of gas stations nationwide, and closed 10 out of 200 warehouses, according to the specialized energy platform.
The French government was forced to withdraw from strategic fuel reserves to cover the deficit in stations and others, with the blockage of dialogue with trade unions organizing related strikes since February 2023.
11 strikes to no avail
The labor unions organized more than 11 partial strikes, including the sectors of industry, transportation, communications, schools, refineries and liquefied gas stations, as well as workers in the cleaning sector, but the government is still insisting on implementing its decision without retreat.
The French government defends its decision as an inevitable reform that cannot be delayed, otherwise the pension and insurance system in France will be bankrupt within a few years.
On the other hand, the trade unions object to the government unilaterally taking this fateful decision related to millions of employees without referring to Parliament, by arguing with a controversial constitutional article.
Strikes are still continuing in French refineries and others until April 3, 2023, with Emmanuel Macron’s government insisting on defiance and refusing to respond to street pressure.
Four refineries (out of 6) are participating in the French strikes, which led to a decrease in daily refining capacity by more than one million barrels per day, according to the specialized energy platform.
Nigerian oil is affected
Nigerian oil exports have been greatly affected by these strikes, which coincide with the periodic maintenance seasons for refineries in Europe, according to the specialized energy platform.
Nigerian oil is struggling to find buyers with more than 20 cargoes available for loading in April 2023, after managing to clear some cargoes last week.
50-25 shipments of Nigerian oil exports were released 10 days ago, each containing one million barrels of oil, but at lower prices than expected due to oversupply caused by the French strikes.
Despite the oversupply and the slowdown in crude oil sales, Nigeria is still working to increase its production to compensate for the huge losses it incurred due to the phenomenon of crude oil theft during the past year.
Oil theft
Fighting oil theft and boosting production in the Niger Delta region tops the agenda of Nigeria’s new President Bola Ahmed Tinubu, elected last month to succeed President Muhammadu Buhari, both of whom are from the ruling party.
The Nigerian authorities are currently working to revive Pony Light crude production in some major areas that have stopped production for several months due to oil theft and technical problems.
A major export pipeline in the oil-rich Niger Delta region exploded on March 2, 2023, during an attempt to rob it, killing 12 people and causing an estimated loss of 180,000 barrels of crude oil per day, according to the specialized energy platform.
Nigeria, the largest oil producer in the continent, lost nearly 500,000 barrels per day during 2022, due to the phenomenon of organized theft, which led to a decline in its production to its lowest level in 32 years.
Most of the theft cases were concentrated in the oil-rich Niger Delta region, which lost the country’s export revenues exceeding $2 billion.
Either sell or store
The Nigerian authorities have tightened security aspects in the Niger Delta region since July 2022, which led to a remarkable gradual recovery in Nigerian oil production, until the bombing incident in March 2023, and then the unrest in France, which confused the country’s accounts again.
Nigerian oil exports are receiving fewer offers than they would expect from Europe and are forced to accept them due to oversupply caused by the French refinery strikes, giving sellers limited options to dispose of their oil shipments, according to FGE Consulting.
Oil sellers have two options, one to sell back at a discount, or to keep the oil in floating storage units until the French strikes end, both of which have a cost, according to Steve Sawyer, director of the refining advisory unit.
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