Africa’s largest economy South Africa has revealed plans to partner Nigeria (Africa’s 2nd largest economy) as it looks for alternative sources for crude, its deputy president said on Wednesday, suggesting Pretoria is to cut crude imports from Iran amid looming U.S. sanctions.
Prior to this development, Africa’s biggest economy imports a quarter of its crude from Iran, but has been pressured by Western powers to cut trade ties with Tehran as part of sanctions designed to frustrate Tehran’s suspected pursuit of nuclear weapons.
Deputy President Kgalema Motlanthe, while speaking to reporters during a briefing with the Vice President of Nigeria Namadi Sambo in Cape Town, gave a hint that South Africa is shopping around for alternative suppliers.
Motlanthe said; “We would guarantee going forward, to our Nigerian brothers, demand for their liquid fuels because we don’t want to source our fuel in areas that are likely to be unstable,”
“We are quite confident that Nigeria will become one of South Africa’s trusted suppliers of liquid fuel”, he added.
South Africa is being cautious with the alternative supplier as any disruption to crude imports could hit fuel supplies, which has suffered shortages in the last year because of strikes and refinery problems.
According to customs data, South Africa took 615,834 tonnes of Nigerian crude in March, more than four times the same month last year and more than the 505,908 tonnes it bought from Iran.
However, some South African refineries are designed to treat Iranian-type crude only. Thus, analysts say refiners will be hard-pressed to replace those supplies with other products.
Last week, a South African energy ministry official disclosed that the country was still holding daily talks with the United States, European Union and Iran about reducing its purchases and was “confident” a deal can be struck to avert sanctions, Reuters reported.
Some refiners in South Africa including BP, Chevron, Sasol and Engen said earlier this year that they have either stopped or were not sourcing any Iranian crude. However, trade data from March showed that imports of Iranian crude had gone up from the previous month.
