The deal was signed during President Lee Jae-myung’s state visit to Washington and further cements Seoul’s role as the largest Asian buyer of US crude.
South Korea’s growing reliance on US barrels
South Korea currently imports around 460,000 to 470,000 barrels per day of US crude, worth about $12–14 billion annually, according to Oilprice.com. This already represents nearly half of the pledged volume under the $100 billion agreement, signaling that Seoul’s dependence on American supplies will only intensify.
For Nigeria, which counts South Korea alongside India and Indonesia as key Asian customers, the move raises concerns about long-term market share. Nigerian light sweet crude grades like Qua Iboe and Bonny Light have historically been favored by South Korean refiners, but US cargoes are increasingly displacing African supplies due to pricing advantages and shorter shipping distances.
Changing energy mix
The pressure on Nigeria is compounded by South Korea’s evolving energy portfolio. Imports of US liquefied natural gas (LNG), which peaked at 8.9 million tonnes in 2021, have since declined as utilities shift toward closer suppliers such as Qatar and Australia. Coal imports from the US have also fallen sharply, though they are slowly recovering.
These shifts highlight Seoul’s strategy of balancing energy security with cost efficiency, a strategy that often disadvantages distant suppliers like Nigeria, where freight costs are higher.
Risks for Nigeria’s market share
Analysts warn that if the US consolidates its foothold in South Korea, Nigeria could lose one of its most stable Asian outlets.
“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, Africa’s top oil producer, has repeatedly struggled to meet its OPEC quota due to persistent output shortfalls. Official data shows production has recovered to around 1.5 million barrels per day, but insecurity in the Niger Delta and inadequate infrastructure remain major constraints.
Global realignment of crude flows
The US–South Korea pact comes at a time of wider global energy shifts. Iran has lifted production to 3.24 million barrels per day, Russia is wooing US oil majors despite sanctions, and Libya is targeting 2 million barrels per day by 2028 with renewed interest from American companies.
In this competitive landscape, Nigeria risks being sidelined unless it strengthens its energy sector. Experts argue that urgent investment in modern refineries, improved infrastructure, and reliable supply chains is needed to keep African crude relevant in Asia.
Otherwise, the $100 billion South Korea–US deal could accelerate Nigeria’s decline in its most lucrative overseas markets.
