South Sudan starts to lose oil buyers as conflict continues

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Buyers of South Sudanese crude oil have been looking for alternative sources following the conflict that broke out last month affecting oil production in especially South Kordofan and Unity State.

South Sudan which had been producing 250,000 b/d is now losing buyers from India, China and Japan who have now sought new markets to replace the Nile Blend crude from Sudan and South Sudan with supplies remaining unreliable.

Production from Sudan despite being reliable is far below demand with an estimated 50,000-60,000 b/d. As a result only two cargoes of the Nile Blend crude will be offered in February all of which is from Sudan.

Already on customer the Indian MRPL refinery has already sourced 1 million barrel cargo from Argentina a first for the South East Asian plant considering that its parent company OGNC has equity in Sudan and south Sudan.

Chinese and Taiwanese refiners Chinaoil and Unipec have also sourced 100% crude oil from Angola as the West African crude (Cabinda) closely resembles the Nile Blend though it is unlikely that Cabinda could replace Nile Blend with Chad’s Doba a better option

A Japanese refinery is said to have sourced 950,000 barrels of Doba in mid January.

This is as the likes of Chinaoil, Unipec, European trader Vitol and Indian and Japanese refiners prefer the heavier Dar blend.

Since December the Dar Blend crude production has dropped by over 70 percent from 190,000-200,000 b/d up to 50,000 b/d with just  an estimated 4 million barrels expected to be sold in February.

Another alternative for the Dar crude could be Indonesia’s Duri. The Cabinda will however remain a favourite to replace the Nile Blend if the conflict continues.

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Author: Samuel Kamau Mbote

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