₦airaland Forum

When the terrorist group Boko Haram kidnapped more than 250 Nigerian schoolgirls last spring, many news reports noted that Nigeria had long been one of the biggest suppliers of oil to the United States, suggesting that economic relationship gave Washington a strong incentive to help track down the kidnappers.

That was wrong.

advertisement

In April, the same month the girls were snatched from an elementary school in Chibok, only 4.5 million barrels of Nigerian oil arrived at U.S. ports, down from a record high of 40 million barrels seven years earlier.

And by July, the spigot was shut off completely. Over the next six weeks, not a single drop of Nigerian light, sweet crude arrived in the U.S. - all of it replaced at Gulf Coast refineries by fracked oil from fields like the Bakken formation in North Dakota and Eagle Ford in Texas.


The American Energy BoomMEET THE PRESS



The big fat zero was a milestone not only on the United States' journey toward energy independence, but a signpost pointing to a new world. With it, Nigeria became the first formerly flush oil producer to essentially lose its entire share of the U.S. market, leaving it scrambling for new customers, less able to fund its internal war on terror and less important to the U.S.

"Nigeria is facing a sea change in relations with the United States, a sea change in its geopolitical position in the world," says Peter Pham, director of the Africa Program at the Atlantic Council, searching for words to capture the magnitude of the moment.

"This energy shift is akin to the collapse of the Soviet Union in its foreign policy implications."

advertisement

Experts are just beginning to sort through the implications of the U.S. switching from being the biggest single consumer of petroleum to a producer and - eventually perhaps - a competitor. They see Nigeria, which generates 70 percent of its budget from oil sales, as a test case that may hold important clues about how other oil-rich nations like Iran, Iraq, Saudi Arabia and Russia will react as their oil-driven economies come under additional pressure.

"The collapse of the price of oil brought on by the rise in American production is fundamentally changing the world," said John Campbell, former U.S. ambassador to Nigeria and now director of the Ralph Bunche Center at the Council on Foreign Relations. "This energy shift is akin to the collapse of the Soviet Union in its foreign policy implications."

Daniel Yergin, an energy researcher with IHS Cera and author of "The Quest," a history of oil and geopolitics, said that, in the near term at least, the road will remain rocky for the government of Nigerian President Goodluck Jonathan.

"Nigeria as a country has three big issues: The loss of its biggest market in the U.S.; secondly, the price decline has really hit them; and the third thing is, of course, they're suffering this insurgency in the north," he said.


World Looking to U.S. for EnergyMEET THE PRESS



John Kilduff, a veteran oil trader with Again Capital, agrees that Africa's most populous nation faces "a rough decade" as it struggles to find new customers for the oil formerly exported to the U.S. In the interim, he said, he expects "economic upheavals and social unrest."

advertisement

The financial impact already is getting serious.

Nigeria's Finance Minister Ngozi Okonjo-Iweala announced last week that a 6 percent drop in oil revenue would force the government to cut non-essential spending, raise more revenue and spend half of its $4.1 billion sovereign wealth fund - down from $11.5 billion at the start of 2013 -- to cover budgetary shortfalls. There also have been calls for the government to print more of its national currency, the naira, to cushion the impact of the recent oil price declines, though Okonjo-Iweala has so far rejected them.

The government in Abuja is simultaneously struggling to address the violent Islamic insurrection in the north, where Boko Haram continues to terrorize the citizenry with bombings, butchery and mass abductions. The government recently announced it has authorized taking out a billion dollar loan from Western banks to finance the war against Boko Haram.

Will 'bunkering' of oil cease?

Campbell, the former U.S. ambassador to Nigeria, says that the country could descend into chaos if the price of oil falls beyond its current $78-a-barrel price, because its finances already have been pushed to the breaking point by oil "bunkering" - or theft by Nigerian officials - which he estimates represents around 10 percent of Nigerian production.

"That oil finances the patronage, clientage network," he said. "It is all illegal (but) it's the grease to the system, and as the value falls … the grease dries up and the system doesn't work."

And Carl Levan, a professor at American University and author of "Dictators and Democracy in African Development," says turmoil in Nigeria could quickly spread through west Africa, already beset by long-running civil wars, an Ebola epidemic and political crises.

advertisement

Many observers say the shift in oil production also will have broad ramifications outside of west Africa. It could lead the U.S. to focus on new priorities -- including Asia - and make it less likely to intervene when faraway national or regional conflicts don't threaten its economic wellbeing. That, in turn, could mean that small battles will become global ones, without a superpower willing to check them in their infancy, they say.

And the situation could get even worse for oil-reliant nations -- and regions. With U.S. production soaring at the same time its consumption is declining, the U.S. may become a competitor in the longer term, with an ability to undercut producers like Nigeria.

Oil Tanker Train ANDREW BURTON / GETTY IMAGES
Oil containers sit at a train depot on July 26, 2013 outside Williston, North Dakota. North Dakota has been experiencing an oil boom recently, bringing tens of thousands of jobs to the region, lowering state unemployment and bringing a surplus to the state budget. Train yards are one of the primary ways oil is exported from the state.
Although it isn't discussed much in political debates, U.S. officials are well aware of the possible ramifications.

"A dramatic expansion of U.S. production could … push global spare capacity to exceed 8 million barrels per day, at which point OPEC could lose price control and crude oil prices would drop, possibly sharply," the National Intelligence Council, the U.S. intelligence community's internal think tank, said in its "Global Trends 2030" report in December 2012. "Such a drop would take a heavy toll on many energy producers who are increasingly dependent on relatively high energy prices to balance their budgets."

The day of reckoning may not be as far off as 2030. As Citigroup noted in Energy 2020, its own analysis of the oil trade, issued early this month, "Eight years ago, in August 2006, the U.S. imported, net, a little over 13.4 million barrels a day of crude and products; recently the net import number has fallen to 4.7 million barrels a day."

advertisement

As a result of the shift, U.S. relations with oil exporters will grow far more complicated as the haves become economic have-nots. It's already happening with Nigeria, says Pham.

[b]Earlier this month, a delegation from the Council on Foreign Relations visited the Nigerian Embassy in Washington where they were lectured by Ambassador Ade Adefuye on the lack of U.S. support for his government's operations against Boko Haram. Adefuye told the visitors that Washington at first refused to share intelligence with the Nigerian government and also withheld "lethal equipment that would have brought down the terrorists within a short time on the basis of allegations that Nigeria's defense forces have been violating human rights of Boko Haram suspects when captured or arrested."

The comments were posted on the front page of the embassy's website, which Pham said wouldn't have happened without approval from the Nigerian goverment. And the angry rejoinder itself wouldn't have happened at all in the past, when relations between the countries were considered too important to risk ruffling feathers in Washington.

Pham suggested that the lack of oil trade also could lead the U.S. to step back or even away from Nigeria.[/b]

Six years ago, he noted the U.S. played a key role in negotiations between the Nigerian government and a group of insurgents known as the Movement for the Emancipation of the Niger Delta (MEND), who felt they had been left out of the economic boom fueled by oil production in the delta. When they rose up, a third of the nation's oil production was cut off.

"The U.S. coaxed Nigeria into peace talks with amnesty payments, training, etc., (and) successive U.S. ambassadors were involved," noted Pham. "Would they be involved again? Although U.S. companies, like Chevron would be affected, the U.S. oil supply would not. Would it be easier for a U.S. administration to not make it a priority?"

The answer to that question may be revealed soon. The Nigerian government's agreement with MEND expires next year and must be renewed. It is not clear if the U.S. intends to get involved in those negotiations.

advertisement

"The pirates in the Gulf of Guinea are aggressive, but if piracy is not affecting our supply, there is a danger that our response won't be as robust."

Pham also recalled that several years ago the U.S. Navy's Sixth Fleet helped coordinate a response to pirate attacks on Nigerian oil tankers, but has not been as forceful in recent months, despite an increase in the attacks.

"The pirates in the Gulf of Guinea are aggressive, but if piracy is not affecting our supply, there is a danger that our response won't be as robust, particularly when there are so many other demands on a U.S. Navy that has fewer ships," he said.

If the U.S. adopts a lower profile in Africa as a result of its diminished hunger for the continent's oil, Nigeria and other nations will look to China and, to a lesser extent, India to take up the slack.

Some experts believe that China may fill the void to some extent, both as a customer for African oil and as an investor and influencer.

Military analyst William M. Arkin is among them, saying the U.S. Africa Command believes that China is ready to step into a leading role in Africa, targeting its vast mineral resources. "China is exceeding U.S. investments in Africa and that, too, changes the geopolitics," he said.

But Levan, the American University professor and Africa expert, says it is "questionable" whether India and China can make up for Nigeria's lost U.S. sales, in part because refineries in both countries are set up to process cheaper heavy crude oil, not light, sweet crude oil. He also notes that India is more likely to get its oil from nearby Iraq and Iran, assuming the latter is freed from international sanctions, while China is looking to fracking to become energy independent.

advertisement

Kilduff, the oil trader, agrees that China will not be the savior for Nigeria or other diminishing oil economies.

Power Shift: An NBC News/CNBC Special Report

Energy Boom Dawning in America

How U.S. Oil, Gas Burst Could Shake Up Global Order

Disputes Over Environmental Impact of Fracking Obscure Its Future

Video: Drilling Down and Out in Texas

"Every OPEC member facing this crisis has a nice PowerPoint presentation showing how Chinese exports will replace U.S. purchases," he said sarcastically.

advertisement

In reality, declining growth in China and the rest of East Asia is going to mean the market is going will shrink worldwide just as more and more oil goes on line, Kilduff said. That could result in a further drop in prices, maybe as low as $50 a barrel, at which point he says Nigeria might be forced to curtail production or store crude, he said.

Experts and oil traders say that Nigeria is the first of several smaller OPEC countries to see their connection with the U.S. change as their crude exports drop. Already, Angola has seen nearly all its U.S. market share vanish, and Venezuela is likewise looking for alternative markets for its heavy crude, Citigroup's "Energy 2020" report states.



"Smaller oil exporter countries like Iraq and Kuwait may be able to hold on to their market share, but only by accepting lower prices," it said. "… Going forward, Colombia, Brazil, Russia, Angola, Ecuador, Iraq, and Kuwait could also see their market share dwindle."

nbcnews.com/

Its indeed sad Nigeria will have to learn the hard way and thank God other nations would have to learn from our misfortune

... We once had the chance to deversify the economy but the cueless leaders we had since independence choose to stick to oil and could not see what the future hold.

If care is not taken the price of light crude would be sold for as low as US45 dollar. Imagine China planing to take over from US and would decide the amount they would buy, instead of us giving our price. This is the highest point of elasticity of price were the taxs are bron by the producers

Imagine Gowon we fought the civil war 1967 was telling us that during the war he ask US to help Nigeria with ammunotion to defect the earterner and in the present 2014 (44year past) Nigeria is still asking US for ammunotion. Can't we do things our self??

I want to thank every Nigerian for being there for 54year, the is the right time to go our seperate ways, and i would really really miss the westerners and northerners. Its indeed emotional.

Which mumu tank. Oil only about 12% of our gdp. Its politicians economy that will 'tank' although them go still hammer

Now that our oil wealth is fast vanishing, can the North now secede

There is no doubt that incoming president has a load of work to do in area of tackling economic crises that is lurking.

Will the government able to arrest inflation from clocking 20% before the expiration of his tenure.

Will the government be able to curtail the insurgence that will eventually spread south?

Can any meaningful infrastructure be achieved in the next dispensation?

How will the government cope with budget deficit?

What about impending massive layoff that the civil service will experience?

How will the 36 states adjust to this sudden shock but brute reality?

Will this bring an end to corruption?

Whatever the question is, Nigeria will no longer remain the same again either for better or for worse, and the only alternative is to vote responsibly come 2015, despite the fact that we have very few leaders who can make a change, but to me the task ahead is beyond the grasp of this present government

Hydraulic fracturing is not the way out, it's environmental hazard , the environmental impact is more damaging than it's usefulness.

And some Nigerians were going green

We are our own problem.

All these bullsh1t from another main stream media outfit.

Nigeria will bounce back.

Their Ebola didn't work.

Their bokos are being contained.


Their economic war will also flop. We will find a solution.

China and India are enough. Phuck America. Phuck Obama.

In 6 mts time the US stock markets are expected to crash. Saudi oil pumping will not save them from their imminent collapse.

Rather than mind their own business and find a way of averting their imminent stock market crash they are now posting gibberish about our economy.

http://www.moneynews.com/MKTNews/Finance-Market-Stocks-Aftershock/2013/03/13/id/494569/

Scientist Predicts 60% Market Collapse
Monday, 01 Dec 2014 04:21 AM


  Get Link |   Email Article |   Comment  |    Contact  |   Print   |  A   A  



inShare
17
Chris Martenson is a world-renowned expert on identifying dangerous, yet hidden, exponential growth patterns in global economies, energy demand, and food consumption...

And he is predicting a 60% stock market collapse will strike in the next three months.

Martenson’s opinion isn’t to be taken lightly, as his research is highly regarded by the United Nations, UK Parliament, and Fortune 500 companies.




Martenson’s research suggests that the stock market has patterns, as seen in the above chart.

This proven pattern suggests the market goes through three common “tops.”

The first “top” was in 1999, followed by a 60% market decline. The second “top” was in 2007, again followed by a 60% market plunge. And a third top has now formed, and a 60% stock market drop is inevitable - and it could strike at any moment.

Unfortunately, Martenson is not the only economist predicting a massive, historic meltdown.

In fact, his figures are conservative compared to other experts in his field.

In a recent interview, Robert Wiedemer — an economist best known for correctly predicting the collapse of the U.S. housing market of 2006 and the stock market collapse of 2008 — provides disturbing evidence for 50 percent unemployment, a 90 percent stock market crash, and 100 percent annual inflation . . . starting this year.

When the host of the interview expressed disbelief in Wiedemer’s claims, he calmly displayed five indisputable charts to back up his predictions (click here to see those exact charts).

Wiedemer says the blame lies squarely on those whose job it was to avoid the exact situation we find ourselves in, including current Fed Chairman Ben Bernanke and former Chairman Alan Greenspan, tasked with preventing financial meltdowns and keeping the nation’s economy strong through monetary and credit policies.

At one point in the interview, Wiedemer even calls out Bernanke, saying that his “money from heaven will be the path to hell.”

But it’s not just the grim predictions that are causing the sensation in Wiedemer’s video interview. Rather, it’s his comprehensive blueprint for economic survival that’s really commanding global attention.

The interview offers realistic, step-by-step solutions that the average hard-working American can easily follow.


“[The interview] was originally filmed for a private audience,” stated Aaron DeHoog, the financial publisher who is unapologetic for the release of controversial footage that has gained international attention (a donor to President Obama actually tried to ban it from their far reaching empire).

“People were sitting up and taking notice, and they begged us to make the interview public so they could easily share it.”

Since that day, over 50 million concerned citizens have tuned in to prepare for “the unthinkable.”

Asked if he is concerned if Wiedemer’s predictions don’t come true, DeHoog replied, “Absolutely not. The best-case scenario is that Wiedemer is wrong.

“Unfortunately, he has been dead-on thus far. No, our real concern is this, and it’s the more likely scenario — what if just half of Wiedemer’s predictions come true? Bottom line, it is imperative that Americans be prepared, and that is why we will continue to air this powerful interview.”

My fellow nigerians,it's high time we split off.
Those shouting na our oil can have the oil to themselves.

Those ikwerre bastards most continue to claim they are not igbo.

If these three bolded questions is solved, the rest will be achievable. Insurgence creates serious complexity for balanced working system. It is also difficult to fight insurgence without running into deficit. But a smart president with the right cabinet can with much less cost.

Ttalk:
There is no doubt that incoming president has a load of work to do in area of tackling economic crises that is lurking.

Will the government able to arrest inflation from clocking 20% before the expiration of his tenure.

Will the government be able to curtail the insurgence that will eventually spread south?

Can any meaningful infrastructure be achieved in the next dispensation?

How will the government cope with budget deficit?

What about impending massive layoff that the civil service will experience?

How will the 36 states adjust to this sudden shock but brute reality?

Will this bring an end to corruption?

Whatever the question is, Nigeria will no longer remain the same again either for better or for worse, and the only alternative is to vote responsibly come 2015, despite the fact that we have very few leaders who can make a change, but to me the task ahead is beyond the grasp of this present government

waternogetemeny:
Those ikwerre bastards most continue to claim they are no igbo.

Won't u shut up... Dats how ppl like u go around causing trouble for others

phantonce:
My fellow nigerians,it's high time we split off.
Those shouting na our oil can have the oil to themselves.

U think because one country reduced there export of our oil dat the economy wud just crash...lol... oil is too valuable don't worry, America wud be back.

lygn19:
U think because one country reduced there export of our oil dat the economy wud just crash...lol... oil is too valuable don't worry, America wud be back.

America is never coming back.
Shale oil is the future gold mine and america is tapping into that.
Unless we have shale oil,America is nt coming back.

Our only bet is china and maybe india.

Frankly, I do not see it happening. America is made up of intelligent economic scientist. Do you think they didn't foresee the current events? There independence if foreign oil is here to stay. We are in it for real this time. What happens to hungry people? Hungry people get angry and take appropriate measures to survive. Nigeria is about to experience a major change

lygn19:
U think because one country reduced there export of our oil dat the economy wud just crash...lol... oil is too valuable don't worry, America wud be back.

From what I hear, it appears China is also considering cracking so it can also become independent. Also, countries like Russia and other oil producing countries are looking upto china. We all know what happens to price when there is surplus. Coupled with the power to price the commodity lower due to competition. I personally do not see price of our precious commodity getting higher

phantonce:
America is never coming back.
Shale oil is the future gold mine and america is tapping into that.
Unless we have shale oil,America is nt coming back.

Our only bet is china and maybe india.

phantonce:
America is never coming back.
Shale oil is the future gold mine and america is tapping into that.
Unless we have shale oil,America is nt coming back.

Our only bet is china and maybe india.

If the price of conventional oil at the international market falls below 50-60 dollars per barrel, it becomes uneconomical to continue to extract shale oil. Same thing happened in the 80s which led to its abandonment. So never say never!!!

Bottomline is that we need to diversify our economy

Though the future is bleak, Nigeria with the right leadership can survive it because of our natural and human endowment, sadly this alone does not translate to economic boom, there should be immediate and aggressive diversification into agriculture in the short-run that at least will reduce the tension and the effect of the chaos.

While doing that the service sector should be strengthened to accommodate the teaming educated elite. Developmental infrastructures such as 80% electricity supply should be achieved within the next four years to sustain small enterprises. With the right policy, infrastructural loan can be paid in the next 20year while other sectors would have replaced oil that will only be retain for local consumption

I expect oil price to be as low as $50 irrespective of growth in the Chinese market or India. Remember China is looking at Russia and will still renegotiate the last deal they had, the Chinese are opportunist and do not believe in an orderly business manner so their business approach is erratic.
There is one gold mine Nigeria has but its the hard way and two approaches to it;
To decentralize power to regional government in an autonomous political system such that VAT and proceeds from resources exports can be shared 50-50.
This model is hard but will eventually pay off in the long term.
The other hard way will also be two in one; focus on recovering over $200billion from corrupt leaders dead or alive and business elites that have milked the country dry from Local government officials to past presidents and their cronies but such wealth is better distributed across regional lines as well.
United States has found solution to ways of being more influential in the global sphere and bringing Arabs and Russia to their kneels. Russia especially is meant to fill the pinch alot as waves of oil prices will keep nose diving till OPEC cut their outputs and the greedy Arabs who feel they can speed up their diversifications quickly so as to be free from their oil chains.This has made them rather insensitive to the plight of Africans who are in need of these monies.
FDI in Nigeria will also be affected as investors confidence in oil sector will drop and let me just chip in this secret, the value of the Niger Delta will decrease and foreign support in case of civil war will be minimal because the burden the region will pose will be enormous and intra tribal conflict can bring prolonged war.
Now where is the next stop for investors in Nigeria? Its simple, consumer products and so investors will look at areas of real growth unlike the energy sector which Madam Okonjo Ngozi has been harping on which has not translated to growth in other critical sectors.
Oil price will also fall and domestic market will become important as a means of growing the economy as government turn to tax and levies as means of income.
Overall, this is good for Nigeria but may be not all parts because security may become serious issues in determining where FDI will go even local investors and you can look at few places like Lagos and environ and maybe Abuja if Boko Haram is addressed.
What is the bottom line, the federal government has to free itself of attaching too much to itself, pursue political restructuring and achieve stability.

ThundrCork:
From what I hear, it appears China is also considering cracking so it can also become independent. Also, countries like Russia and other oil producing countries are looking upto china. We all know what happens to price when there is surplus. Coupled with the power to price the commodity lower due to competition. I personally do not see price of our precious commodity getting higher

There was once a country called Nigeria.

We need crude prices at $10.

At the OP has the demand for Nigerian crude declined, because the Americans stopped buying it? Or Nigeria and other oil producers are still selling their products just for less money,as speculators and currency traders tank the futures market.

I'm pretty sure the clueless one is clueless about this and the solutions to these issues.Or he'll just tell us 'the US will know...'
He needs to be pushed out,as 'na our oyel' becomes irrelevant. In favor of one who can restructure the economy for the situation.

laimo:
I'm pretty sure the clueless one is clueless about this.

Your mother is in desperate need of a brain transplant if she doesn't opt to swallow henceforth

LeOstrich:
Your mother is in desperate need of a brain transplant if she doesn't opt to swallow henceforth

^^^This all you can do.We're talking about the cluelessness of your master in tackling an economic distress that affects ordinary Nigerians,you still come up insulting.God'll really help him to win in 2015.

laimo:
^^^This all you can do.We're talking about the cluelessness of your master in tackling an economic distress that affects ordinary Nigerians,you still come up insulting.God'll really help him to win in 2015.

Shut dat d1k gurgling mouth of yours.

Is the wealth located in your ritual voodoo enclave?

Keep depending like ab0ki parasites.

Ediot

laimo:
I'm pretty sure the clueless one is clueless about this and the solutions to these issues.Or he'll just tell us 'the US will know...'
He needs to be pushed out,as 'na our oyel' becomes irrelevant. In favor of one who can restructure the economy for the situation.

Is the economy not restructured already? Please, what percentage of the economy is crude oil driven?