India Boosts Nigerian Crude Purchases as Dangote Refinery Turns to US Oil Imports
India’s state-owned refineries have increased their purchases of Nigerian crude oil, even as Nigeria’s $20 billion Dangote Petroleum Refinery leans heavily on US imports to meet its feedstock needs. Industry sources revealed that Indian Oil Corporation recently bought one million barrels of Nigeria’s Agbami crude for September delivery, part of a wider diversification strategy following reduced purchases of Russian oil under pressure from the United States. Bharat Petroleum Corporation Limited (BPCL) and other state refiners also secured additional volumes from non-Russian sources, including Angola, Abu Dhabi, the US, and Nigeria.
The shift in India’s sourcing comes as the Dangote refinery imported record volumes in July—590,000 barrels per day (bpd)—with US crude making up 60 percent of its intake, surpassing Nigerian grades for the first time. According to Kpler data, Nigerian supply accounted for 220,000 bpd, mainly Amenam, Bonny Light, and Escravos, while US West Texas Intermediate (WTI) gained preference due to competitive pricing and reduced demand from Asia. The refinery, currently operating at 85 percent capacity, plans to expand output to 700,000 bpd, although sourcing domestic crude remains a persistent challenge.
Analysts attribute the refinery’s reliance on US crude to several factors, including pricing advantages, operational flexibility, and domestic supply constraints despite a naira-for-crude agreement with the Nigerian government. Dangote’s crude inventories climbed to 6.73 million barrels in July, suggesting some imports are being stockpiled. At the same time, Nigeria’s indigenous oil firms are stepping up production as international majors scale down, pushing crude and condensate supply to 1.75 million bpd in July, the highest three-month average in over five years.
Operational issues also influence Dangote’s import patterns. The refinery has been importing around 22,000 tonnes of condensate naphtha monthly to support gasoline production amid ongoing challenges at its 204,000 bpd Residual Fluid Catalytic Cracker (RFCC) unit. The facility, which produces gasoline, jet fuel, and other refined products, has exported fuel to Oman, Ivory Coast, and Europe, while maintaining significant domestic supply. Aliko Dangote recently announced that the refinery had made Nigeria a net exporter of refined petroleum products, with about 1 million tonnes of petrol exported in just 50 days.
Looking ahead, Kpler forecasts Nigeria’s crude and condensate supply to average 1.65 million bpd for the rest of 2025, with potential gains in 2026 as local producers like Seplat and Renaissance Africa Energy expand operations. Infrastructure developments, such as the privately built Otakikpo terminal and new export facilities by Conoil, could further boost capacity. However, industry analysts caution that expecting Dangote to run at full capacity before late 2026 may be overly optimistic, citing potential mechanical issues and maintenance requirements as ongoing constraints.
Source: Punch