Nigerian crude oil prices surged past $72 per barrel on Tuesday, spurred by renewed geopolitical tensions following deadly Houthi attacks in the Red Sea. These attacks, which killed four crew members aboard the bulk carrier Eternity C, raised global concerns about supply disruptions. As a result, Nigerian oil blends such as Bonny Light and Qua Iboe traded higher than major global oil benchmarks.
Despite the initial spike, global crude prices pulled back slightly on Wednesday. Brent futures dipped to $69.91, and WTI to $68, as U.S. crude inventories unexpectedly rose by 7.1 million barrels, according to the American Petroleum Institute. Traders are also treading cautiously ahead of new U.S. tariff announcements by President Trump, contributing to market volatility.
The $20 billion Dangote refinery announced plans to fully switch to Nigerian crude by the end of 2025, ceasing all crude oil imports. In June, over half of its supply came from local producers, and officials expect that figure to reach 100% as foreign contracts expire. This shift is expected to strengthen Nigeria’s balance of payments and reduce dependence on foreign sources.
Under Nigeria’s Domestic Crude Supply Obligations (DCSO), local producers are required to supply refineries like Dangote’s. In June, the refinery sourced 53% of its crude locally and aims to increase this with upcoming deliveries from the Nigerian National Oil Corporation. Additionally, Petralon Energy is ramping up production by 2,500 barrels per day at the Dawes Island field to meet rising domestic demand.
In a move to improve accessibility and ease fuel costs, Dangote refinery reduced depot petrol prices from ₦840 to ₦820 per liter. The group has begun engaging more marketers to expand distribution of its products across Nigeria. The refinery, now processing around 550,000 barrels daily, aims to end the cycle of exporting crude and re-importing expensive refined products.
Source: Nairametrics