Nigeria’s ongoing crude oil supply challenges have come under fresh scrutiny following Dangote Petroleum Refinery’s decision to import its first-ever crude cargoes from the United Arab Emirates (UAE). The move highlights the growing difficulties refiners face in securing sufficient crude supplies locally, despite Nigeria being Africa’s largest oil producer. Industry observers say the development reflects a widening gap between domestic crude production and the needs of the country’s largest refinery.
The importation comes just days after reports revealed that the 700,000-barrel-per-day refinery is receiving only five crude cargoes monthly, far below the 13 cargoes expected under the naira-for-crude arrangement. The shortfall, estimated at about 62 percent, has forced the refinery to increasingly source crude from international markets to keep operations running smoothly. According to S&P Global Commodity Insights, the refinery has now secured two cargoes of UAE Murban crude, marking its first use of Middle Eastern feedstock since commencing operations.
Analysts note that improved export flows from the Gulf region, following easing tensions between the United States and Iran, have made Middle Eastern crude more accessible to global buyers. For Dangote Refinery, the latest purchase represents more than just a supply solution—it is part of a broader effort to guarantee uninterrupted production amid recurring disruptions affecting Nigeria’s oil sector. Despite an agreement with the Nigerian National Petroleum Company (NNPC) Limited to supply between 13 and 15 cargoes monthly, deliveries have remained inconsistent due to production challenges and operational setbacks at key export terminals.
The refinery’s long-term strategy also involves diversifying its crude sources as it prepares for a major expansion. Plans are underway to increase refining capacity from approximately 700,000 barrels per day to 1.4 million barrels per day by 2028, a level that could allow the facility to process nearly 80 percent of Nigeria’s current crude output. Chief Executive Officer David Bird previously stated that the refinery intends to increase its use of heavier crude grades and could process up to 30 percent Middle Eastern crude across its refining units after expansion.
While some may view the UAE imports as a departure from Nigerian crude, industry experts insist the decision is primarily a risk-management strategy. Data from S&P Global Commodity Insights show that Nigerian crude still accounted for about 70 percent of the refinery’s imports in 2025, with the United States contributing around 24 percent. However, concerns remain over the domestic supply system. The African Energy Council recently argued that the refinery’s supply challenges stem less from resource availability and more from structural issues within the industry. As debates continue over the implementation of the Petroleum Industry Act (PIA) and crude allocation policies, the refinery’s reliance on foreign supplies has become a powerful symbol of the challenges facing Nigeria’s oil sector.
source: The sun
