Nigeria union warns of oil shutdown
A union representing 20,000 oil and gas workers in Nigeria has threatened to shut down all production starting on Sunday as part of a crippling nationwide strike over spiralling fuel prices.
The strike began on Monday after the Nigerian government reversed a popular subsidy programme that had kept gas prices low for Nigerian consumers.
Anger over the government's decision has led to demonstrations across Africa's most populous nation, and related violence has left at least 10 people dead.
A statement by the Petroleum and Natural Gas Senior Staff Association of Nigeria said that if the government does not restore the subsidies, the union will be "forced to go ahead and apply the bitter option of ordering the systematic shutting down of oil and gas production".
Benchmark oil prices rose by 1.03 to 101.90 dollars per barrel in electronic trading on the New York Mercantile Exchange. Prices rose on concerns of global supplies.
Nigeria is the fifth-largest oil exporter to the United States, and losing those supplies would force American refineries to replace 630,000 barrels of crude per day.
The impact of the Nigerian government's subsidy removal has been dramatic: Gas prices in Nigeria more than doubled overnight, causing transport and food costs to rise as well for a nation where most live on less than two dollars (£1.30) a day.
Yet oil, extracted mostly offshore by foreign firms or by automated onshore systems, keeps flowing to other countries. Now unions are threatening to try to disrupt those operations. Even if production is slowed, though, oil in inventories could continue to supply foreign markets for a time.
"A complete shutdown, if carried out, is likely to have a rather large detrimental effect on Nigerian output, even though exports could continue from their inventories in the short term," financial institution Barclays Capital recently said.
Nigeria produces about 2.4 million barrels a day from the swamps of its southern delta to massive offshore oil fields. Oil accounts for up to 80% of revenues in Nigeria, a nation of more than 160 million people.