The hard-hit suezmax tanker market may get some relief as Nigeria’s government opens new dialogue with guerrilla forces which have wreaked havoc with the nation’s oil export potential.

Nigeria, once the largest oil producer in Africa, has seen its production fall sharply due to ongoing militant attacks in the country’s coastal delta region, which is the home of much of its oil production and export infrastructure.

Nigeria’s crude production in July was 1.52 million barrels per day, which is over 300,000 barrels per day lower than last year’s levels. The decline was largely due to ongoing sabotage of pipelines by terrorist groups.
 

The decline in Nigerian oil output has had a knock-on effect for suezmax markets. The Baltic Exchange’s assessment for rates of the TD20 route from West Africa to Europe have sunk from $43,000 per day at the beginning of the year to just over $7,000 per day.

Earlier in August, Shell declared force majeure on exports of Bonny Light crude. Two other export streams are also said to still be shut-in due to pipeline sabotage.

During a weekend summit in Tokyo, Nigeria’s president Muhammadu Buhari said his government will renew its focus on dealing with militants responsible for the ongoing sabotage.

Buhari said that he will be open to negotiations with the militants, known as the Niger Delta Avengers. Otherwise, Nigeria’s government will step up its military campaign as occurred with the Islamist militant group known as Boko Harum in northern Nigeria.

"We are talking to some of their leaders. We will deal with them as we dealt with Boko Haram if they refuse to talk to us,” Buhari said in an official statement from his office.

For their part, the Niger Delta Avenger have signalled more willingness to engage in talks. In an open letter on their website released Monday, the group says its “halted hostilities” in the Niger delta region, and that it expects “a genuine and positive attitude to restructuring and self-determination” in the region. But it has also warned that renewed attacks in the region will be met with more sabotage.