Benin Blocks Niger's First Crude Oil Shipment to China Amid Border Dispute

Benin has blocked Niger's first crude oil shipment to China, preventing three vessels from docking at the port of Seme Kpodji, amid an ongoing border dispute between the two West African neighbors. The move is seen as a violation of bilateral trade agreements and jeopardizes Niger's plans to begin exporting crude oil to China under a $400 million commodity-backed loan deal with the China National Petroleum Corporation (CNPC).

Why this matters: This blockade has significant implications for the global energy market, as Niger's oil exports could potentially disrupt the balance of supply and demand. Moreover, the dispute highlights the fragility of regional relationships and the potential for economic sanctions to be used as a tool of political leverage.

Relations between Benin and Niger have been strained since Nigerien soldiers deposed President Mohamed Bazoum in a coup last July. Niger's new leadership terminated a military cooperation agreement with Benin in September, accusing it of supporting a cross-border invasion planned by the Economic Community of West African States (ECOWAS) to reverse the coup. Benin had previously enforced ECOWAS sanctions, including border closures against Niger, but lifted the restrictions in December.

However, Beninese President Patrice Talon has now demanded that Niger fully reopen its land border if it wants to export fuel through Benin's ports. Niger's Prime Minister Ali Mahamane Lamine Zeine has accused Benin of violating bilateral trade agreements, stating that the blockade is "a serious violation" of Benin's commitment. Zeine claims that the border crossing has remained closed for "security reasons," citing the presence of French military bases in Benin that allegedly train terrorist groups to attack Niger.

The blockade prevents Nigerien crude from reaching the international market and affects Niger's ability to repay the $400 million loan from China. Under the deal, Niger borrowed the funds at a 7% interest rate and intends to repay the debt by shipping oil to Asia for 12 months. The crude is supposed to be transported through a 1,900km pipeline connecting Niger to the Port of Seme in Benin, but the pipeline is currently not operational due to the trade dispute.

Benin insists that it will only lift the blockade once Niger reopens its border to goods from Benin. President Talon stated, "Benin is not an enemy country and if tomorrow the Nigerien authorities decide to collaborate with Benin in a formal manner, the boats will be loaded." The border closure has affected Benin's economy, and the Seme port will not be opened to Niger oil exports unless the junta in Niamey ends the border blockade.

Niger has asked China to intervene in the dispute, hoping for a solution. The oil pipeline, almost 2,000 kilometers long, was constructed to export Nigerien crude oil to the international market through the Chinese company CNPC. The current impasse threatens Niger's economic plans and its ability to meet its loan obligations to China. As the situation continues to unfold, the international community will be closely watching to see if a resolution can be reached between the two West African nations.

Key Takeaways

• Benin blocks Niger's first crude oil shipment to China amid border dispute.
• Blockade jeopardizes Niger's $400 million loan deal with China National Petroleum Corporation.
• Dispute highlights fragility of regional relationships and economic sanctions as political leverage.
• Benin demands Niger reopen land border to export fuel through Benin's ports.
• Niger asks China to intervene, threatening its economic plans and loan obligations.