West African crude oil trade for April-loading cargoes has slowed, despite shortages caused by the Iran war, as sellers reserve barrels for their own refineries unless particularly high bids emerge, four crude traders told Reuters.
The unusual development is another sign of how the U.S.-Israeli war against Iran, which has effectively shut tanker traffic through the Strait of Hormuz and forced Middle East producers Saudi Arabia, Kuwait and Iraq to cut output, is affecting flows and trading in the global physical market.
Around 20 West African crude cargoes on the April loading schedule are available to buy, two traders said this week, even though the war has drastically tightened the global oil market and the schedules for May cargoes have already emerged.
“They might sell if the price is right, but they don’t need to,” one of the traders said, adding that the owners of as many as 15 of the cargoes can refine them if no strong bid emerges.
As in other markets, prices for West African cargoes have soared as refiners snap up available replacement barrels for disrupted Middle East supply.
For example, Nigerian Bonny Light crude was valued at a $7.50-per-barrel premium to the dated Brent benchmark this week, according to LSEG data, the highest since Russia’s invasion of Ukraine in 2022.
NOT A TYPICAL OVERHANG OF CARGOES
It is typical for there to be some unsold West African barrels, known as an “overhang,” of the current month’s cargoes soon after the coming month’s loading schedule is issued, but this is normally a sign of sluggish demand.
The owners of these April cargoes, while waiting to see if a strong bid emerges from a refiner, could also be cautious to sell in case the market tightens further, another of the four traders said.
West African oil cargoes can be resold on the international market more than once, having typically first been allocated to an international oil company or trading firm.
A surge in freight costs has also discouraged deals, traders say. Asia is a key market for West African crudes, but freight rates for some key routes have hit multi-year highs, according to Riverlake data.
West Africa’s top export markets in 2025 were China and India, according to data from Kpler, accounting for nearly 40% of exports.
REUTERS
