Why We Stopped Buying Nigeria's Oil, By White House

OFFICIALS of the United States government have for the first time in months presented an explanation on the sudden termination of oil imports from Nigeria since July, an action which spurred concerns whether there were any possible political connotation especially because of the current strain in Nigeria-US diplomatic relations.

Answering a question on the issue from The Guardian, during the week, White House Director of the US National Economic Council, Mr. Jeff Zients, said the cessation of oil imports from Nigeria had to do with the significant rise in US oil production.
Zients, US Labor Secretary, Thomas Perez, and White House Policy Council Director, Cecelia Munoz, were addressing a few US journalists on Thursday afternoon on the state of the American economy when The Guardian raised the question wondering why the US brought oil imports from Nigeria to a complete zero, while still importing oil from Saudi Arabia and other major oil producing countries.


According to the White House Economic Council Director, "across the last several years, US oil production has ramped up significantly by more than 50 percent to now over eight and a half million barrels per day."
He explained that such a high turn up in local US oil production "has now dramatically reduced our dependency on imports," Zients noted, adding that "in fact, we now produce more here than we import."

The White House official stated that the development is consistent with President Barack Obama's energy strategy, which has changed "quite a bit over the last few years as we are much less dependent on oil imports."
That strategy has not only left Nigeria in the lurch, but has generally also driven down the international market price of oil to a ridiculous $60 range by the close of trading on Friday. Oil price, which soared around $100 in September, is now $56.52 for the WTI Crude and $61.38 for the Brent Crude oil.

But Zients and the other US officials at the press briefing did not address the issue of the ongoing importation from other oil producing nations, including OPEC members like Saudi Arabia and Kuwait and non-OPEC suppliers like Canada. In fact, as at last month, it was reported that, while US completely halted oil imports from Nigeria, it increased its importation from those three countries.

The reduction of US oil importation from Nigeria to zero is the very first time since 1973 that the US did not import oil from Nigeria. US Shale oil production is responsible for the infusion of "light, sweet crude," said to be similar to Nigeria's Bonny Light oil, and US refineries are said to have preferred buying the locally produced oil, which is cheaper than Nigeria's light crude.

Before Zients explanation on Thursday, there have been muted concerns whether the decision to completely end oil importation from Nigeria has any political connotation. For instance, a German top bank, Deutsche Bank had commented last month that "as if the recent drop in oil prices was not enough bad news for Nigeria's economy, recent data show the US completely stopped importing crude oil from Nigeria. This marks a dramatic reversal for Africa's largest economy, which in 2010 was still among America's top 5 oil suppliers and exported at its peak 1.3m barrels per day to the United States."

The German bank analysis further questioned why Nigeria was singled out, an aspect of the question posed by The Guardian to which the US government officials did not address. According to Deutsche Bank, the decline in US imports from Nigeria, "proceeded much faster than for the US' other major suppliers.' It is the rather drastic and complete zero oil imports from Nigeria that suggested a possible political connotation, which was however left unexplained by Zients.

Observers say it is not unlikely that oil imports termination with Nigeria and the refusal of the US government to sell weapons to Nigeria to fight Boko Haram might both be political signals from President Barack Obama to the Nigerian presidency as it can be seen as demonstration of a lack of commitment by the US government to a supposed strategic partner --Nigeria -- in Africa.

The Obama administration's outright refusal to approve the sale of specific military equipment to Nigeria, in a clear-cut public renunciation of the Nigerian military and security apparatus which requested the okay from the US Defense department is also a potential dampener to US claims of a thriving diplomatic relationship with Nigeria. First, it was the US Ambassador in Nigeria who confirmed that the country would not okay the weapons sales to Nigeria, and then the State Department in response to Nigeria's Ambassador's complaints on the issue.

This particular refusal is sending clear indications that there are strong oppositional voices against President Jonathan in the White House, the State Department and Pentagon, causing further strain between Nigeria and the American governments, according to knowledgeable US sources.

Last month, Nigeria's US Ambassador had to openly criticise the US government for not approving the sales of Cobra fighter jets to Nigeria to help fight the Boko Haram insurgency at a meeting he had with the influential US Council for Foreign Relations in his office. Adefuye, US sources say was expending his far-reaching influence with top US government officials in an apparent last-ditch effort to change the tone of the Obama administration towards the Jonathan presidency.
In fact, authoritative US sources said the denouncement of the military sale and the abandonment of the highly valued Nigerian crude oil by US oil future traders recently are happening at a time when the offices of National Security Adviser and Finance Minister of Nigeria are spending millions of dollars to retain US lobbyists in Washington DC to help plead the case of the Jonathan presidency without much success.

Explaining the desperation from the Nigerian government over the need for such lobbyists, a source from the Foreign Affairs Ministry in Abuja also said while the federal government through the office of the NSA and Finance Ministry were paying millions for lobbyists, the salaries of Nigerian diplomats were still backlogged, including in the US.