West African crude oil prices came under renewed pressure on Monday as soaring tanker freight rates made the region’s barrels more expensive to move to international buyers.

Nigeria’s Qua Iboe crude was sold at a premium of $4.10 per barrel above dated Brent, after TotalEnergies accepted an offer on the Argus Open Market platform. The grade had previously been offered at around $6 above dated Brent, according to LSEG data.

The decline in the differential comes as shipping costs for large crude tankers have climbed to record levels this month. Increased attacks on commercial shipping have heightened risks along key maritime routes, pushing up the cost of transporting oil, including from West Africa.

African crude gains attention in Asia

The pressure on West African crude comes as Asian refiners adjust to changing global supply conditions.

Indian refiners are preparing for tighter supplies of Russian crude in October and November as exports are expected to decline while competition from Chinese buyers intensifies.

To replace some of the Russian barrels, Indian refiners have increasingly turned to alternative supplies, including UAE Murban, Iraqi Basrah and Angolan crude. Traders said these replacement barrels are coming at higher prices.

The shift could provide additional demand for African crude producers, particularly Angola, although elevated freight costs remain a challenge for exporters and buyers alike.

Nigerian fuel-import dispute

Meanwhile, Nigeria's downstream petroleum sector is facing a separate legal development.

A Nigerian court has ordered the country's downstream petroleum regulator to continue issuing fuel-import licences and related permits to three oil marketing companies, according to court documents seen on Monday.

The ruling comes amid continued changes in Nigeria's petroleum market as the country balances domestic refining ambitions with the need to maintain adequate fuel supplies.

For West African producers, the combination of volatile shipping costs, shifting refinery demand and changes in global crude flows is likely to remain an important factor in determining the competitiveness of regional oil exports.

Source: Reuters
Reporting: Seher Dareen
Editing: David Goodman