After Trump’s Victory, Anxiety Mounts Over U.S. Crude Oil Import From Nigeria – Guardian

As the President-elect of the United States of America (U.S.A.) continues to celebrate his victory, there is anxiety on how his administration is going to manage the relationship between Nigeria and the U.S. in respect of crude oil export.

Already, experts are of the opinion that Donald Trump’s hostility toward trade with the Organisation of the Petroleum Exporting Countries (OPEC) and interest in the U.S. energy security should be a source of worry to Nigeria, which is a member of OPEC.

In his America First Energy Plan, Trump said the U.S. should “become, and stay, totally independent of any need to import energy from the OPEC cartel or any nation hostile to our interests.”

Although, Trump has not publicly declared war against OPEC since becoming President elect of the U.S, his campaign promises indicate he would likely adopt policies in favour of increasing fossil fuel (oil, gas and coal) output, which may reduce import from Nigeria.

Trump’s proposals or what he calls “energy revolution” including open onshore and offshore leasing on federal lands, eliminate moratorium on coal leasing, and open shale energy deposits.

He promised to free up the energy industry from red tape; eliminating renewable energy subsidies and vowing to ‘cancel’ the international Paris climate.

He has made sweeping promises to unleash what he argues as “Americas $50 trillion in untapped shale, oil, and natural gas reserves, plus hundreds of years in clean coal reserves.” Trump’s energy plan indicates that his ultimate aim appears to “become, and stay, totally independent of any need to import energy from the OPEC cartel or any nations hostile to our interests.”

According to the U.S. Bureau of African Affairs 2016 Fact Sheet on Nigeria, the United States is the largest foreign investor in Nigeria, with U.S. foreign direct investment concentrated largely in the petroleum/mining and wholesale trade sectors.

It disclosed that U.S. exports to Nigeria include wheat, vehicles, machinery, oil, and plastic. Nigeria is eligible for preferential trade benefits under the African Growth and Opportunity Act (AGOA).

The fact sheet disclosed that U.S. imports from Nigeria include cocoa, rubber, returns, antiques, and food waste. The United States and Nigeria have signed a bilateral trade and investment framework agreement.

Speaking on the possible implications of the U.S. new administration on crude oil import from Nigeria, Ecobank Group Head of Energy Research, Dolapo Oni said that Donald Trump’s win signals that America is tilting more towards a protectionist trade policy and an isolationist foreign policy.

He noted that while these may however be the general interest, it is anticipated that the long standing relationships America has with several other countries and allies, as well as trade and security agreements will ensure that they cannot immediately switch to this protectionist/isolationist status that Donald Trump has projected, it will still play a key role in their decisions/policies.

With regards to oil, Oni said America is likely to view the sector as one where they can create jobs and looks to boost oil production.

“Higher U.S. oil output could mean lower imports from Nigeria again. U.S. imports of oil from Nigeria has gradually risen this year to an average of 250,000 bpd, but we could see it go back down towards the lower five digits. I think Nigeria’s relationship with the U.S. is going to have to change as well. We need to see how to get more U.S. involvement in our gas sector,” he added.

Speaking on the issue, Head, Programmes and Membership, Institute of Directors’ Centre for Corporate Governance, Nerus Ekezie said, it may affect the quantity of U.S. crude oil import from Nigeria.

This, he added, is because of the newly elected president’s strong view on the U.S, immigration and aid policy.

Ekezie stated: “It may affect the trade relationship between Nigeria and the U.S. in respect to immigration and aids for Africa and Nigeria. The issue of aids to Africa has been a source of concern to the new president and this may lead to reduction in the quantity of America aid to Nigeria and other African countries.

“There may not going to be free flow of trade between the two countries going by the immigration exercise he may likely put in place.

“He may likely be strict in the movement of people in and around America. If movement is hampered in one-way or the other, it will definitely affect the relationship between Nigeria and America.

“If the trade relationship between Nigeria and America is hampered, it will have negative effects on Nigeria’s economy because bilateral relationship grows when both countries embrace good trade relationship,” he added.