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West African crude oil differentials remained subdued on Wednesday as weak buying interest from Asia and increased competition from U.S., Latin American and Middle Eastern crude grades continued to weigh on the regional market.
West African crude oil markets remained subdued on Wednesday, with limited trading activity reflecting weaker demand from Asian refiners and intensified competition from alternative crude supplies in global markets.
Market participants said buying activity remained relatively slow, particularly from Asia, traditionally the largest destination for West African crude exports.
A trader familiar with the market told Reuters that overall demand continues to be muted, contributing to softer pricing across several regional crude grades.
Competition from Rival Producers
West African exporters are facing increasing competition from crude supplies originating in the United States, Latin America and the Middle East, where refiners have found attractive alternatives in recent weeks.
According to traders, many Asian refiners have shifted part of their purchasing towards U.S. West Texas Intermediate (WTI) crude, reducing demand for traditional West African cargoes.
The increased availability of competitively priced crude from multiple producing regions has made it more challenging for West African exporters to secure premium pricing.
Limited Buying Activity
Despite the generally quiet market, traders reported that one regional buyer had purchased cargoes of several benchmark grades, including:
- Nigeria’s Escravos crude;
- Nigeria’s Qua Iboe crude; and
- Angola’s Plutonio crude.
However, additional details regarding the transactions could not be independently confirmed.
Export Trends
Shipping data from commodities analytics firm Kpler indicates that Nigerian crude exports have remained relatively resilient despite softer market conditions.
Between 1 and 15 July, Nigeria exported an average of approximately 1.28 million barrels per day (bpd), slightly above the 1.2 million bpd average recorded during June.
Angola, by contrast, experienced lower export volumes over the same period.
The country loaded approximately 900,000 bpd during the first half of July, compared with an average of 1.06 million bpd in June.
Roughly half of Angola’s July crude exports are expected to be shipped to China, which remains one of the country’s largest energy customers.
Market Outlook
Global crude markets continue to be influenced by shifting refinery demand, changing trade flows and geopolitical developments affecting energy supply.
While West African producers continue to benefit from relatively stable production, sustained competition from other exporting regions could keep price differentials under pressure unless demand from major importing markets strengthens in the coming months.
West Africa remains an important supplier of light sweet crude to global markets, particularly in Asia and Europe. Continued weakness in Asian demand, combined with growing competition from U.S., Middle Eastern and Latin American producers, could affect export revenues for major oil-producing countries such as Nigeria and Angola. The performance of West African crude exports remains a key indicator of regional energy market health and broader trends in global oil trade.
Source: Reuters
Reporting: Robert Harvey.
Editing: Diti Pujara.