Business
Firms Clash Over Nigerian Crude Oil
Oil major BP has clashed with rival, Vitol in the Nigerian crude market, buying up cargoes and taking a big derivative position that may have raised costs for European refiners, according to Reuters.
New trading opportunities arose from August, when broker Sunrise started the first derivative for Nigeria’s four largest crude oil grades – Bonny Light, Forcados, Qua Iboe and Bonga – mirroring derivatives trading in the North Sea.
The derivatives, known as contracts for differences (CFDs), allow traders to bet on whether premiums of the four Nigerian grades versus the Brent benchmark will rise or fall.
The CFDs, also known as swaps, can be used to hedge against price fluctuations during the voyage of a physical cargo to a consumer, which can take weeks. But CFDs can also be used to take a speculative position.
According to five traders familiar with the developments, who asked not to be named because they are not allowed to speak to the media, BP quietly built a long position of up to 10 million barrels in the African CFDs contracts in August, betting the premium of the grades to Brent will rise in September.
Against BP in the paper market were six trading desks, including trading giant Vitol, which took the opposite side of the bet and went short CFDs, betting that African grades’ premiums to Brent would fall, according to trading sources.
The paper deals were done on a back-to-back basis with only BP, Vitol and five other companies aware of the developments.
BP said it does not comment on trading positions. “However, BP welcomes the introduction of the new West African swap to provide greater transparency and aid price discovery in the West African crude market,” it said on Friday.
The trades took place in what has long been a regulatory gray area. London’s Financial Conduct Authority, which does not regulate London trading in the West African crude market, but does oversee the UK Brent crude benchmark, declined to comment.
BP does not produce oil in Nigeria and has not been a large trader of Nigerian oil in recent years, although it has bought some cargoes for its refining system.
After quietly building its paper position in August, BP launched a flurry of bids on the Platts system in September for physical cargoes of Nigerian oil.
BP bid for a total of 22 Nigerian cargoes loading between Sept 3-12, a previously unseen volume in the West African crude market, where a whole month can sometimes go without a single public bid or offer in the Platts window.
BP’s bidding activity ushered premiums of the African grades against the Brent benchmark to as high as $1.70 per barrel compared to a premium of $1.20 a barrel in August, when BP was building its CFDs position.
A difference of 50 cents per barrel would in theory bring a profit of $5 million on a 10-million-barrel CFD position.
The rise in premiums in the physical market made BP a big winner on its long position on the CFDs trade, while Vitol was a loser, according to traders.
The Central Bank of Nigeria (CBN) yesterday said 33 banks have met new minimum capital requirements under its recapitalisation programme, raising a combined N4.65 trillion to strengthen the financial system.
The apex bank disclosed this in a statement marking the end of the exercise, which commenced in March 2024 and drew participation from domestic and foreign investors.
The statement was jointly signed by the Director of Banking Supervision, Olubukola Akinwunmi, and the Acting Director of Corporate Communications, Hakama Sidi-Ali.
The statement said “Over the 24-month period, Nigerian banks raised a total of N4.65tn in new capital, strengthening the resilience of the financial system and enhancing its capacity to support the economy.”
The regulator said local investors accounted for 72.55 per cent of the funds, while international investors contributed 27.45 per cent, reflecting continued confidence in the sector.
Commenting on the outcome, the CBN Governor, Olayemi Cardoso, said in the statement, “The recapitalisation programme has strengthened the capital base of Nigerian banks, reinforcing the resilience of the financial system and ensuring it is well-positioned to support economic growth and withstand domestic and external shocks.”
It added that while 33 banks have complied with the new thresholds, a few others are still undergoing regulatory and legal processes.
The statement noted, “The CBN confirms that 33 banks have met the revised minimum capital requirements established under the programme.
“A limited number of institutions remain subject to ongoing regulatory and judicial processes, which are being addressed through established supervisory and legal frameworks.
“All banks remain fully operational, ensuring continued access to banking services for customers.”
The apex bank stressed that the exercise was executed without disrupting banking operations, ensuring uninterrupted access to services nationwide.
It further stated that key prudential indicators have improved, particularly capital adequacy ratios, which remain above global Basel benchmarks.
The minimum ratios were set at 10 per cent for regional and national banks and 15 per cent for banks with international licences.
The bank also said the recapitalisation coincided with a gradual exit from regulatory forbearance, a move it said improved asset quality, strengthened balance sheet transparency, and enhanced overall stability.
To preserve these gains, the CBN said it has reinforced its risk-based supervision framework, mandating periodic stress tests and adequate capital buffers for banks.
It added that supervisory and prudential guidelines would be reviewed regularly to strengthen governance, risk management, and resilience across the sector.
“The successful completion of the programme establishes a stronger and more resilient banking system, better positioned to support lending, mobilise savings, and withstand domestic and global shocks,” the statement said.
The Tide learnt that foreign capital inflows into Nigeria’s banking sector rose by 93.25 per cent year-on-year to $13.53bn in 2025, up from $7.00bn recorded in 2024, amid the ongoing recapitalisation drive by the Central Bank of Nigeria.
Data from the National Bureau of Statistics capital importation report showed that the banking sector remained the dominant destination for foreign capital, accounting for $13.53bn of the total $23.22bn recorded in 2025, representing 58.26 per cent of total inflows, up from 56.81 per cent in 2024.
The surge reflects heightened investor interest in Nigerian banks as they raised fresh capital to meet new regulatory thresholds introduced by the apex bank, with industry-wide recapitalisation activities driving large-scale inflows across all quarters of the year.
However, the Centre for the Promotion of Private Enterprise (CPPE) recently raised concerns over weak credit flows to small businesses despite recent banking sector reforms.
The CPPE, led by a renowned economist, Dr Muda Yusuf, acknowledged that the ongoing bank recapitalisation exercise by the CBN has strengthened the financial system, but warned that the benefits have yet to translate into meaningful support for the real economy.
The facility will be disbursed through participating Microfinance Institutions (MFIs), which will in turn extend the loans to their customers, particularly SMEs, as they directly interface with businesses at the grassroots level.
The Executive Director of COMCIN, Mr. Micheal Ogbaa who represented the Chairman, Dr. Iredele Oyedele (FCA, FCCA), said the initiative is designed to strengthen micro-lending institutions and expand access to finance for grassroots entrepreneurs, particularly women and youths in the informal sector.
Ogbaa explained that COMCIN does not lend directly to individuals but works through its network of microfinance and cooperative institutions, which in turn provide loans to end users.
“We came together to advocate for the microfinance ecosystem. Commercial banks often exclude people at the grassroots, but our members are positioned to reach them. This facility will empower them to do more,” he said.
He noted that the loan scheme offers low interest rates and flexible repayment plans, making it more accessible to small business owners.
According to him, about 90 percent of beneficiaries are expected to be women, who play a key role in sustaining families and driving economic activities at the local level.
“Our focus is on traders, service providers, and players in the informal sector. These are the real movers of the economy. By supporting them, we are strengthening families and contributing to national development,” he added.
Ogbaa disclosed that eligible SMEs with proven integrity and business track records could access up to N5 million each through participating micro-lending institutions. The rollout has commenced in Lagos and will extend to Abuja, Enugu, and other regions, including the South-West, South-East, and North-East.
He said 12 micro-lending institutions have already benefited from the scheme, while 85 applications are currently being processed under the pilot phase.
“Our target is to reach at least 100,000 SMEs nationwide. We are building a platform that connects funding partners with credible micro-lending institutions, creating a reliable channel for financial inclusion,” Ogbaa said.
He added that COMCIN is also working to attract larger funding pools from development finance institutions and private investors, noting that successful implementation of the pilot phase would boost confidence and unlock more capital for SMEs.
“We have seen encouraging testimonies from early beneficiaries. As we demonstrate transparency and efficiency, more institutions will be willing to channel funds through us,” he said.
