Nigeria’s crude oil exports to Asia face fresh pressure after South Korea sealed a $100 billion agreement to purchase US energy over the next four years, a deal signed during President Lee Jae-myung’s state visit to Washington.
The move deepens competition for Nigeria in one of its most important overseas markets and strengthens Seoul’s position as the largest Asian buyer of US crude.
South Korea currently imports between 460,000 and 470,000 barrels of US crude per day, worth around $12–14 billion annually, according to Oilprice.com.
That already accounts for nearly half of the pledged volume under the new deal, indicating Seoul’s dependence on American supplies will only grow.
For Nigeria, where South Korea, India, and Indonesia are key customers, this raises concerns about maintaining long-term market share.
Nigerian light sweet crude grades such as Qua Iboe and Bonny Light have long been favored by South Korean refiners, but US cargoes are increasingly displacing African barrels due to lower prices and shorter shipping distances.
The shift is reinforced by South Korea’s broader energy strategy. Imports of US liquefied natural gas, which peaked at 8.9 million tonnes in 2021, have since fallen as utilities pivot toward nearer suppliers like Qatar and Australia.
Coal shipments from the US also declined sharply in recent years, though they are slowly recovering.
These adjustments highlight Seoul’s priority of balancing energy security with cost efficiency, a calculation that often disadvantages distant exporters such as Nigeria, where freight costs are higher.
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Analysts warn the consequences could be severe. “South Korea’s deal with the US is a red flag for Nigeria. Our traditional buyers in Asia are diversifying to cheaper and more consistent supply sources, while our own production has been hampered by pipeline vandalism, theft, and underinvestment,” an energy analyst in Lagos said.
Nigeria, the continent’s largest oil producer, has struggled to meet its OPEC quota due to chronic production shortfalls.
Output has recovered to roughly 1.5 million barrels per day, but insecurity in the Niger Delta and poor infrastructure continue to weigh heavily on supply.
The South Korea–US pact comes as global crude flows are undergoing significant realignment.
Iran has lifted production to 3.24 million barrels per day, Russia is courting American oil majors despite sanctions, and Libya is targeting output of 2 million barrels per day by 2028 with renewed US investment, according to Business Insider.
In this shifting environment, experts warn Nigeria risks being sidelined unless it urgently modernizes its energy sector.
Investments in refinery capacity, infrastructure upgrades, and more reliable supply chains are seen as critical to preserving the relevance of African crude in Asia.
Without such reforms, the $100 billion South Korea–US energy deal could accelerate Nigeria’s decline in one of its most lucrative markets.
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Image Credit: Nigerian Tribune
