By Stuart Wilkinson, OEF.
This is the first of a series entitled “West Africa: Important for China. But still so for the US?” that are subtitled “The importance for the US and China of sub-Saharan West African petroleum producers from 1999 to 2019”. They will look at the importance to the United States and China of the petroleum producing countries of sub-Saharan West Africa from 1999 to 2019.
Towards the beginning of the time period in question there was great euphoria within political circles in the United States with regard to the possible results of the strategy at that time of privileging the light and sweet crudes that came from Nigeria and Angola. The situation changed, however, with the growth in importance of US production of shale oil and gas from around 2012 onwards. This development brought about the reduction in American petroleum imports of Nigerian and Angolan crudes destined to be refined domestically.
For the United States, West African oil had come to play an important role within the criteria of the security of supply of oil, specifically considering the terror attack on the Twin Towers of the World Trade Center in 2001, additionally oil from the west coast of Africa did not run the same transit risks as oil supplied from the Middle East.
In contrast, the case of China differed from that of the United States: given the fact that China could not produce sufficient petroleum for its needs, it had significantly increased its investments in West Africa with the objective securing sustainable access to the resources of the region.
Both the United States and China were dependent on petroleum imports. They needed secure and trustworthy suppliers with long-term in situ reserves, and each saw West Africa as a source of oil that would have growing importance.
To illustrate this, there are some very revealing figures that can be observed from the period 1999 to 2010:
- During this period, oil reserves in West Africa rose 52.6%, production rose 50%, and exports increased 67.6%.
- US imports from the region rose 33.7%, and China’s imports from West Africa shot up 917%.
In China’s case this increase was a response to the requirements for energy that had been imposed by a rhythm of growth that averaged 9.5% per annum.
However, by 2014 important changes could be observed in the world oil market as a result of the “shale revolution” in the United States. Specifically, US imports of Nigerian and Angolan crudes were falling.
The American euphoria about West African oil had gone up in smoke… now US interest would be oriented towards its own territory, and shale. And China? West Africa continued to play an important role in long-term strategy: obtaining secure sources of oil supply for its economic growth.