The return of Iran to an already oversupplied oil market drove down global benchmark for Brent crude on Monday to as low as $27.67 per barrel, putting Nigeria’s economy in further jeopardy.
Before recovering to $28.50, this was the lowest the price of oil has fallen since 2003.
According to the Central Bank of Nigeria, CBN, the price of the Nigerian crude oil, Bonny Light, fell to $28.93 per barrel as of Monday, compared to $29.47 from previous week.
The Executive Director, South African Petroleum Industry Association, Avhapfani Tshifularo said: “Iranian imports are likely to displace the Nigerian and Saudi Arabian crudes, since they seem to have filled the gap when South Africa stopped importing Iranian crude oil.”
Just like the situation in South Africa, same could be replicated when India resumes import of Iranian oil relegating Nigerian oil to the background and that could affect trade this year. Before now, traders have had issues selling our cargoes.
Over the weekend, the United States had cut Iran’s oil exports by about two million barrels per day since their pre-sanctions 2011 peak to a little more than one million bpd.
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