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Niger Delta Crisis Affecting Crude Oil Prices and Supplies to US, China, Japan and Europe


With the current hostage crisis in the Niger Delta and renewed threats by militants to attack more Nigerian oil facilities, crude oil prices have risen for a second time in a week. Analysts say there’s concern over disruption of Nigerian oil supplies, as well as lower oil production in Iran.

Julian Lee is the senior energy analyst at the Center for Global Energy Studies. From London, he told English to Africa reporter Joe De Capua that problems in the Niger Delta are significant for the oil industry: “Nigeria may not be the only oil producer in the world, but it is one of a relatively small number of producers who have, I suppose, the dual blessing or the dual curse of being located on the shores of the Atlantic Ocean and also producing very high quality crude oil that is good for making the low sulfur transport fuels that are driving demands in the Atlantic markets.”

Besides the United States, Nigerian oil markets include China, Japan and Europe.

With the ongoing tensions and violence in the Delta, does Lee believe that Nigeria is under pressure from buyers or OPEC to resolve the problems? “I don’t think the Nigerian government needs any outside pressure to persuade it of the importance of getting control of the Niger Delta. I think the federal government is very aware of just how crucial oil is to their economy and how critical the Niger Delta is to Nigeria’s oil production. They don’t need outsiders reminding them of that importance. They are very well aware of the need to sort this out.”

Lee adds that even if all of Nigeria’s oil production were moved offshore, the facilities would still have to be supplied from Niger Delta ports, so the dependence would always be there to some extent.

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