In an unexpected twist in global oil trade, Indian state refiners are snapping up Nigerian crude while Nigeria’s $20 billion Dangote Petroleum Refinery increasingly relies on imports from the United States. Industry operators have described the situation as an “oil trade irony,” highlighting the complex realities of supply, pricing, and availability in the energy sector.
Sources told Reuters that Indian Oil Corporation recently purchased one million barrels of Nigeria’s Agbami crude for September delivery, part of a wider spree that saw Indian refiners secure millions of barrels from non-Russian sources. The buying spree follows pressure from Washington for India to scale back on Russian imports, prompting Indian refiners like Bharat Petroleum and BPCL to diversify their crude supply with African and Middle Eastern grades.
Meanwhile, data from commodities analytics firm Kpler revealed that in July, US crude accounted for about 60 per cent of Dangote’s 590,000 barrels per day intake—its highest monthly volume on record—while Nigerian grades made up the remaining 40 per cent. This marks the first time US barrels have overtaken Nigerian supply at the refinery, a shift attributed to competitive US pricing and domestic sourcing challenges despite a naira-for-crude deal with the Federal Government.
Dangote Group has acknowledged the struggle to secure adequate domestic crude under Nigeria’s Domestic Crude Supply Obligations, leading the refinery to adopt a more flexible sourcing strategy. While the facility produces primarily gasoline for domestic use, it has also exported refined products, including jet fuel to West Africa and Europe. The refinery is currently operating at 85 per cent capacity, with plans to expand output to 700,000 barrels per day.
Analysts caution that reaching full capacity may take until late 2026 due to maintenance and operational issues, including technical setbacks at key processing units. Still, the refinery’s expansion and export capabilities have positioned Nigeria as a net exporter of refined products for the first time, even as the country’s own crude increasingly fuels foreign economies.
