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Oil prices tumble, USA's loss India's gain

Oil prices tumble, USAs loss Indias gain
The United States of America has become the world’s number one supplier of oil, thanks to fracking, and does not need Nigeria anymore. No wonder when the Gulf of Guinea pirates predate on oil carrying Nigeria tankers, the US 6th fleet is looking the other way. When the Boko Haram Islamists kidnapped 250 women, America did not twitch a muscle. The deal is over. However, USA’s loss has become India’s gain. India is now buying 30 per cent of crude from Abuja and Lagos at less than $50 a barrel and with a 90 day credit.

India is getting what she wants because Nigeria, having been ditched by the USA, is frantically looking at the East as a backup. China and India account for the two most top slots for Nigerian crude. Nigeria is the 13th world’s largest producer of oil. While India dominates the Nigeria market for crude, China buys from Angola.  Nigeria matters immensely to India as it imports the most from India. Today Nigeria is India’s largest trading partner in Africa. The Indo-Nigeria trade in 2013 was a whopping $16.5 billion.

As oil majors in India go shopping for crude in Nigeria and oil prices tumble the price war is hotting up in Asia. China is watching and India stands to gain. The oil price tumble has put Indian inflation on hold and there is cheer in the market. Fuel is costing less. While all seems good there is however the dark side of Nigerian oil.

In the Niger hinterland where oil drigs go to work, the oil spills of Exxon Valdez in 2008 and 2009 left the Bodo fisherman in deep trouble. Sunk with oil, fish prices rose tenfold; breathing diseases put a robust fisherman community on lifeline. The official 10 per cent of pilferage and graft by the oil mafias did not help either. After a long legal battle, Shell has now agreed to pay $84 million to the 15,600 fishermen and also clean up Bodo Creek. Outrageous since they had wanted to pay only $6,000 when they were sued three years ago.

The author is Consulting Editor, Africa Rising Email: kalyanmukherjee123@yahoo.com

Kalyan Mukherjee

Kalyan Mukherjee

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