Nigeria faces new pressure as South Korea locks $100bn US energy deal

Nigeria’s crude oil exports to Asia may face increased competition following South Korea’s $100 billion commitment to purchase US energy over the next four years, a deal sealed during President Lee Jae-myung’s state visit to Washington.

South Korea is already the largest Asian buyer of US crude, with imports currently at 460,000–470,000 barrels per day—a pace that translates to about $12–14 billion annually. At this level, Seoul has already secured half of its pledged volume, suggesting that its reliance on US-origin barrels will deepen over the coming years according to Oilprice.com.

For Nigeria, which counts South Korea as one of its key Asian crude buyers alongside India and Indonesia, this trend raises concerns about market share. Nigerian grades, especially light sweet crude such as Qua Iboe and Bonny Light, have historically found steady demand in South Korea due to their low sulfur content and suitability for its refineries. However, as US cargoes flood the Asian market, Nigerian exports risk being squeezed out or discounted further.

The situation is compounded by South Korea’s shifting energy mix. Imports of US liquefied natural gas (LNG), which peaked at 8.9 million tonnes in 2021, have been sliding as Korean utilities favor closer suppliers like Qatar and Australia. Coal shipments from the US also fell sharply from a 2018 high of 3.7 million tonnes to 1.4 million tonnes last year, though they have been gradually recovering.

These changes highlight Seoul’s strategy of balancing energy security with competitive pricing and shorter-haul imports—a strategy that could work against African suppliers like Nigeria, where freight costs are higher compared to US cargoes.

Analysts warn that Nigeria may struggle to defend its Asian market share if the US consolidates its foothold in South Korea. With Brent crude futures currently trading around $68 per barrel, competition for buyers is already intense.

“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 told Nigerian Tribune.

Nigeria, Africa’s top oil producer, has faced persistent output shortfalls in recent years, often falling below its OPEC quota. Although official figures suggest production has recovered to around 1.5 million barrels per day, insecurity in the Niger Delta and inadequate infrastructure remain critical bottlenecks.

The South Korea–US pact comes amid wider global energy realignments. Iran has boosted production back to 3.24 million b/d, Russia is courting the return of US oil majors despite sanctions, and Libya is preparing to host US companies as it targets 2 million b/d by 2028. Against this backdrop, Nigeria risks being sidelined if it fails to strengthen its competitiveness.

Industry experts argue that Nigeria must urgently invest in modern refineries, reduce export bottlenecks, and improve reliability of supply if it wants to maintain relevance in the Asian market. Otherwise, the $100 billion US–Korea energy pact may tilt the balance of crude flows in a way that further marginalizes Nigerian oil.

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