Nigeria oil struggles to find buyers as global surplus builds prices

Nigeria crude oil sellers are struggling to find buyers for up to 26 December- and January-loading cargoes due to stiff competition from plentiful and cheaper alternative supplies, traders and analysts told Reuters.

Approximately 20 million barrels of Nigerian oil for December and January loading remained unsold by Thursday, according to two traders, while Angola’s December-January programmes still had as many as five to six cargoes available.

The amount of unsold Nigerian and Angolan crude, analysts say, is a symptom of a wider oil market surplus. It drove selling on the international futures market that pushed Brent crude below $60 per barrel to the lowest since May this week.

Nigeria has also been left to market more oil because of reduced imports by Africa’s largest oil refinery, the 650,000 barrels-per-day Dangote plant, which will in January undergo maintenance, Kpler’s Grabenwoger said.

These cargoes have slowed the start of the trading cycle for February cargoes even though Angola’s loading schedule and term nominations have already been released.

Such a large amount of unsold oil is unusual, especially for the current month, given the West African trade cycle is typically closer to two months ahead. Estimates for both countries’ overhang were as high as 40 million barrels earlier this week.

“The overhang of cargoes partly reflects the broader global crude supply surplus emerging in Q1,” said Victoria Grabenwoger of analytics firm Kpler. “Current market softness appears to be partly seasonal and partly due to shifting buying patterns in response to freight costs and Oil prices steadied on Thursday as investors assessed the likelihood of further U.S. sanctions against Russia and the supply risks posed by a blockade of Venezuelan oil tankers.

Meanwhile Brent crude was up 31 cents, or 0.5%, to $59.99 per barrel while U.S. West Texas Intermediate crude was up 40 cents, or 0.7%, at $56.34 per barrel.

The United States’ intentions to impose more sanctions against Russia and its threatened blockade of tankers under sanctions and carrying Venezuelan oil pushed prices higher, PVM analyst John Evans said.

On Wednesday, Bloomberg reported that the U.S. is preparing another round of sanctions on Russia’s energy sector in the event Moscow does not agree to a peace deal with Ukraine, citing people familiar with the matter.

A White House official told Reuters President Donald Trump had not made any decisions on Russian sanctions. Further measures targeting Russian oil could pose a greater supply risk to the market than Trump’s announcement on Tuesday that the U.S. would blockade tankers under sanctions entering and leaving Venezuela, ING analysts said in a note.

Meanwhile, Britain imposed sanctions on 24 individuals and entities as part of its Russia sanctions regime, including on Russian oil companies Tatneft and Russneft, a government notice showed on Thursday.
The Venezuela blockade could affect 600,000 barrels per day of

Venezuelan oil exports, mostly to China, but 160,000 bpd of exports to the U.S. would likely continue, ING said. Chevron vessels were continuing to depart for the U.S. under a previous authorisation from the U.S. government.
It was not clear how a U.S. blockade would be enforced.

The U.S. Coast Guard last week took the unprecedented step of seizing a Venezuelan oil tanker and sources said the U.S. was preparing for more such interdictions. Venezuelan crude makes up around 1% of global supplies.

Analysts at the Bank of America anticipate the lower price of oil will reduce the amount of supply. If WTI prices average $57 a barrel in 2026, in line with their projection, U.S. shale oil production could contract by 70,000 barrels per day.