Economy
Asia takes record W.Africa oil as buyers shun Iran
Asia is set to import record volumes of oil from West Africa, mainly from Nigeria, this year as increasing supplies of high quality crude drive down its export prices and some buyers shun their traditional supplier, Iran.
Available data showed that in the first quarter of 2012 Asian countries imported 1.82 million barrels per day of crude from the West Africa region mainly from Nigeria this is against the 1.79 million barrels per day in the first quarter of 2011. In 2010 first quarter import of crude from the region was 1.71 million barrel per day as against the 1 million barrel per day in 2009 and 1.21 million barrel per day in 2008.
In the second quarter of this year crude export from West Africa to Asian declined to 1.76 million barrel per day but was higher than the 1.57 million per day in the second quarter of 2011 and lower than the 1.73 million barrel per day in 2010.
Two months into the third quarter of 2012, import of crude by Asian countries stand at 1.64 million barrel per day. According to a survey conducted by Reuters, in June China imported 1,013 barrels per day, in July 889 barrels per day, August 857 barrels per day and in September order has been placed for 823 barrel per day. India ranked the second largest Asian importers of crude from West Africa. In June 2012 it imported 380 barrels per day, 368 BPD in July, 644BPD in August and 475 BPD in September.
According to a Reuters survey of trade and shipping sources end-consumers in China, India, Indonesia and other Asian countries have bought around 1.74 million barrels per day (bpd) of West African mainly Nigeria crude for loading in the first nine months of this year, up around 8 per cent from the same period in 2011.
“This year is going to see another record,” said a senior crude oil trader at a large European refiner. Strong economic growth in China and other industrial economies across Asia is driving a rapid increase in demand for crude oil. Nigeria crude oil is typically “sweet”, containing low levels of corrosive sulphur compounds, and much of it is also relatively heavy, meeting Asian demand for heavy industrial fuel oil and distillates such as kerosene.
Africa’s two biggest oil producers, Nigeria and Angola, have been well placed to meet this extra consumption and exports from the West African region to Asia have risen by more than 50 per cent over the last five years. In the last year, this trend has been accelerated by a big jump in U.S. output of light, high quality crudes. This new domestic production has supplanted oil that used to be imported from Nigeria and also forced down global spot prices of some grades of West African crude oil.
At the same time, many oil refiners that used to take Iranian oil have been scared off by the U.S. and European Union campaign against the Islamic Republic and have instead taken attractively priced oil from Africa.
“The United States will import much less crude oil from Africa this year and Asia is taking many of those barrels,” said Carsten Fritsch, oil analyst at Commerzbank in Frankfurt. “Asian buyers are also replacing Iranian oil with West African barrels because, with all the political problems and the extra insurance costs associated with Iranian oil, it is much easier for them to look elsewhere.”
Asian buyers, who usually negotiate their spot and term import contracts at least a month before loading, have committed to take an average of around 1.64 million bpd of West African crude in the third quarter of this year, up from around 1.46 million bpd in the third quarter of 2011. August has been a particularly strong month for imports into Asia, traders say, with 60 cargoes carrying around 1.84 million bpd heading east. China, the world’s top energy consumer, has taken around 28 cargoes, while Indian refiners have bought 21 cargoes, traders say.
September looks like a slower month for imports into Asia, traders say, with price pressures taking their toll on volumes. West African crude oil is priced against North Sea Brent crude BFO- , which has been strong relative to Dubai crude DUB-, eroding some of the price advantages enjoyed by Nigerian, Angolan and other West African grades.
The front-month Brent/Dubai Exchange of Futures for Swaps (EFS)
DUB-EFS-1M, a market reflecting relative costs for Asian buyers, is near its highest for eight months. “The EFS has widened a lot and that has affected Asian imports for September loading,” said a trader with a large Asian oil company. But the flow of crude oil to Asia from West Africa is likely to pick up again going into the fourth quarter as Chinese refiners start to restock again, traders say, ensuring total volumes in 2012 exceed previous years.
The Arab Africa Trade Bridges (AATB) Program and the Federal Republic of Nigeria formalized a partnership with the signing of the AATB Membership Agreement, officially welcoming Nigeria as the Program’s newest member country. The signing ceremony took place in Abuja on the sidelines of the 5th AATB Board of Governors Meeting, hosted by the Federal Government of Nigeria.
The Membership Agreement was signed by Eng. Adeeb Y. Al Aama, the CEO of the International Islamic Trade Finance Corporation (ITFC) and AATB Program Secretary General, and H.E. Mr. Wale Edun, Minister of Finance and Coordinating Minister of the Economy, Federal Republic of Nigeria. The Agreement will provide a strategic and operational framework to support Nigeria’s efforts in trade competitiveness, promote export diversification, strengthen priority value chains, and advance capacity-building efforts in line with national development priorities. Areas of collaboration will include trade promotion, agribusiness modernization, SME development, businessmen missions, trade facilitation, logistics efficiency, and digital trade readiness.
The Honourable Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, called for deeper trade collaboration between African and Arab nations, stressing the importance of value-added Agribusiness and industrial partnerships for regional growth. Speaking in Abuja at the Agribusiness Matchmaking Forum ahead of the AATB Board of Governors Meeting, the Minister said the shifting global economy makes it essential for African and Arab nations to rely more on regional cooperation, investment and shared markets.
He highlighted projections showing Arab-Africa trade could grow by more than US$37 billion in the next three years and urged partners to prioritize value addition rather than raw commodity exports. He noted that Nigeria’s growing industrial base and upcoming National Single Window reforms will support efficiency, investment and private-sector expansion.
“This is a moment to turn opportunity into action”, he said. “By working together, we can build stronger value chains, create jobs and support prosperity across our regions”, Edun emphasized. “As African and Arab nations embark on this journey of deeper trade collaboration, the potential for growth and development is vast. With a shared vision and commitment to value-added partnerships, we can unlock new opportunities, drive economic growth, and create a brighter future for our people.”
Speaking during the event, Eng. Adeeb Y. Al Aama, Chief Executive Officer of ITFC and Secretary General of the AATB Program, stated: “We are pleased to welcome Nigeria to be part of the AATB Program. Nigeria stands as one of Africa’s most dynamic and resilient economies in Africa, with a rapidly expanding private sector and strong potential across agribusiness, energy, manufacturing, and digital industries. Through this Membership Agreement, we look forward to collaborating closely with Nigerian institutions to strengthen value chains, expand regional market access, enhance trade finance and investment opportunities, and support the country’s development priorities.”
The signing of this Agreement underscores AATB’s continued engagement with African countries and its evolving portfolio of programs supporting trade and investment. In recent years, AATB has worked on initiatives across agribusiness, textiles, logistics, digital trade, export readiness under the AfCFTA framework, and other regional initiatives such as the Common African Agro-Parks (CAAPs) Programme.
With Nigeria’s accession, the AATB Program extends it’s presence in the region and adds a key partner working toward advancing trade-led development and fostering inclusive economic growth.
Federal Executive Council (FEC) has approved the 2026–2028 Medium-Term Expenditure Framework (MTEF), a key fiscal document that outlines Nigeria’s revenue expectations, macroeconomic assumptions, and spending priorities for the next three years. The approval followed Wednesday’s FEC meeting presided over by President Bola Tinubu at the State House, Abuja. The Minister of Budget and Economic Planning, Senator Atiku Bagudu made this known after the meeting.
The Minister said the Federal Government is projecting a total revenue inflow of N34.33 trillion in 2026, including N4.98 trillion expected from government-owned enterprises. Bagudu said that the projected revenue is N6.55 trillion lower than earlier estimates, adding that federal allocations are expected to drop by about N9.4 trillion, representing a 16% decline compared to the 2025 budget.
He said that statutory transfers are expected to amount to about N3 trillion within the same fiscal year. On macroeconomic assumptions, FEC adopted an oil production benchmark of 2.6 million barrels per day (mbpd) for 2026, although a more conservative 1.8 mbpd will be used for budgeting purposes. An oil price benchmark of $64 per barrel and an exchange rate of N1,512 per dollar were also approved.
Bagudu said the exchange rate assumption reflects projections tied to economic and political developments ahead of the 2027 general elections. He said the exchange rate assumption took into account the fiscal outlook ahead of the 2027 general elections.
The minister said that all the parameters were based on macroeconomic analysis by the Budget Office and other relevant agencies. Bagudu said FEC also reviewed comments from cabinet members before approving the Medium-Term Fiscal Expenditure Ceiling (MFTEC), which sets expenditure limits. Earlier, the Senate approved the external borrowing plan of $21.5 billion presented by President Tinubu for consideration The loans, according to the Senate, were part of the MTEF and Fiscal Strategy Paper (FSP) for the 2025 budget.
The spot rate on Nigerian Treasury bills has been increased by 146 basis points by the Central Bank of Nigeria (CBN) following tight subscription levels at the main auction on Wednesday. The spot rate on Treasury bills with one-year maturity has now surpassed Nigeria’s 16.05% inflation by 145 basis points following a recent decision to keep the policy rate at 27%.
The Apex Bank came to the primary market with N700 billion Treasury bills offer size across standard tenors, including 91-day, 182-day and 364 day maturities. Details from the auction results showed that demand settled slightly above the total offers as investors began to seek higher returns on naira assets despite disinflation.
Total subscription came in at about N775 billion versus N700 billion offers floated at the main auction. The results showed rising appetite for duration as investors parked about 90% of their bids on Nigerian Treasury bills with 364 days maturity. The CBN opened N100 billion worth of 91 days bills for subscription, but the offer received underwhelming bids totalling N44.17 billion.
The CBN allotted N42.80 billion for the short-term instrument at the spot rate of 15.30%, the same as the previous auction. Total demand for 182 days Nigerian Treasury bills settled at N33.38 billion as against N150 billion that the authority pushed out for subscription. The CBN raised N30.36 billion from 182 days bills allotted to investors at the spot rate of 15.50%, the same as the previous auction.
Investors staked N697.29 billion on N450 billion in 364-day Treasury bills that was offered for subscription. The CBN raised N636.46 billion from the longest tenor at the spot rate of 17.50%, up from 16.04% at the previous auction.
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