The rise of electric vehicles (EVs) and the use of liquefied natural gas (LNG) in Asia are shrinking Nigeria’s earnings from crude oil exports to the region, its largest market, for the second year in a row.
This trend began two years ago when the Netherlands overtook India as Nigeria’s top buyer of crude oil, signalling a change in the global energy market.
According to the National Bureau of Statistics (NBS), Asia including countries like India, China, Indonesia, Singapore, and Thailand has been a key buyer of Nigerian crude over the past seven years. Between 2018 and 2022, Nigeria earned ₦56.7 trillion from crude oil exports, with Asia contributing ₦17.5 trillion (31% of total revenue).
Declining Demand from Asia
Recent data from LSEG Oil Research shows a 1.4% drop in crude oil imports into Asia last year, driven mainly by reduced demand from China. Chinese oil imports fell by an average of 210,000 barrels per day in 2024, representing a 1.9% decrease.
One major factor is the rapid adoption of EVs and hybrids in China. By mid-2024, over 50% of new vehicles sold in China were either electric or hybrid, thanks to government support. Additionally, many trucks in China have switched from diesel to LNG, further reducing oil demand.
India’s Growing Oil Demand
While China’s demand is slowing, India is emerging as a major driver of global oil demand. Projections for 2024 suggest that India’s oil consumption will grow by 3.2%, compared to China’s 1.7%. This increase is linked to India’s expanding oil refining capacity, though much of the additional refined output is intended for export rather than local use.
Global Impact
The shift in Asia’s energy preferences has significant implications for oil-producing countries like Nigeria. While India’s rising demand offers some hope, the decline in Chinese imports and the global shift towards cleaner energy sources pose long-term challenges for crude oil exporters.
