Global Oil Oversupply Leaves Nigerian Crude Unsold as Dangote Refinery Turns to Imports

Nigerian crude oil sellers are facing mounting pressure in the global market as oversupply continues to dampen demand, leaving millions of barrels without buyers despite complaints of local shortages by the Dangote Petroleum Refinery. Traders say the mismatch highlights deeper structural issues in both global oil trade and Nigeria’s domestic supply framework.

According to a report by Reuters, West African crude producers are struggling to place December and January-loading cargoes due to stiff competition from cheaper and more readily available alternatives. About 20 million barrels of Nigerian crude for the two-month period reportedly remained unsold as of Thursday, an unusually high volume for this stage of the trading cycle.

Analysts say the situation reflects a broader global oil surplus, which has weighed heavily on prices. Brent crude slipped below $60 per barrel this week, its lowest level since May. Victoria Grabenwoger of analytics firm Kpler noted that the backlog of Nigerian and Angolan cargoes signals a supply overhang expected to persist into the first quarter of the year, driven by shifting buying patterns and seasonal softness.

Meanwhile, Nigeria’s largest refinery continues to rely on imported crude. The 650,000-barrel-per-day Dangote plant has sourced oil from the United States, Ghana and other African producers, even as unsold Nigerian crude piles up offshore. According to Kpler, reduced purchases by the refinery—partly due to planned maintenance in January—have left Nigeria with more oil to market internationally at a time of weakening demand.

At a recent media briefing, the President of the Dangote Group, Aliko Dangote, said local supply remains insufficient despite policies meant to prioritise domestic refiners. He explained that imports remain critical to keeping the facility running, underscoring ongoing friction between the refinery, oil producers and regulators such as the Nigerian Upstream Petroleum Regulatory Commission. While government interventions like the naira-for-crude deal have helped stabilise fuel supply and prices, industry players say deeper reforms are still needed to align Nigeria’s crude production with both local and global market realities.

source: Punch