Nigerian crude prices surged above $70 per barrel this week, slightly outperforming major global oil contracts amid fresh geopolitical tensions and shifting supply dynamics.
According to data reported by Reuters on Tuesday, Nigerian oil blends — including Bonny Light, Brass River, and Qua Iboe — settled at $72.3 per barrel. This price, however, remains about $2.7 below the Federal Government’s benchmark for crude.
The rally in prices follows renewed attacks by Houthi rebels on shipping lanes in the Red Sea, which have reignited fears over supply disruptions. One particularly deadly incident involved drones and speedboats striking the Greek-operated, Liberian-flagged bulk carrier Eternity C off the coast of Yemen, resulting in the deaths of four crew members.
While the market saw a spike in prices on Tuesday, oil dipped slightly during Wednesday’s trading session. Brent crude futures for September delivery fell to $69.91 per barrel, while West Texas Intermediate (WTI) futures dropped by 0.4% to $68 per barrel.
The slight pullback was driven largely by an unexpected increase in US crude inventories. According to the American Petroleum Institute (API), US stockpiles rose by 7.1 million barrels for the week ending July 4, far above analysts’ expectations of a 2.8 million-barrel draw. Meanwhile, gasoline inventories fell by 2.2 million barrels, and distillate stocks decreased by 800,000 barrels.
The market now awaits the official Energy Information Administration (EIA) data, expected to confirm whether the trend points to potential oversupply concerns in the US — an outcome that could further weigh on global prices.
Dangote Refinery Advances Plans to End Crude Imports
In a parallel development that could transform Nigeria’s oil landscape, the Dangote Refinery aims to transition fully to using Nigerian crude by December 2025.
Vice President of Dangote Industries Ltd., Devakumar Edwin, told Bloomberg that the 650,000-barrel-per-day refinery has already sourced about half of its crude domestically in June. With long-term foreign supply contracts set to expire soon, the company expects to rely entirely on local crude before the year ends.
“We expect some of the long-term contracts will expire. Personally, and as a company, we expect that before the end of the year, we can transition 100% to local crude,” Edwin stated.
According to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), local producers are required to supply crude to domestic refineries under the Domestic Crude Supply Obligations (DCSO) directive.
Bloomberg data shows that in June, Dangote Refinery sourced 53% of its crude from Nigerian producers and 47% from the US. The refinery, currently processing about 550,000 barrels per day, plans to take five cargoes from the Nigerian National Petroleum Company Limited (NNPC) in both July and August, each nearly one million barrels.
The $20 billion refinery — the largest in Africa — was designed to reduce Nigeria’s longstanding dependence on imported refined petroleum products. Previously, Nigeria exported crude to Europe and then imported refined products at high costs, a cycle that drained foreign reserves and burdened consumers.
Local Producers Expand Output
In support of the shift to domestic supply, Petralon Energy has announced plans to increase its crude output by an additional 2,500 barrels per day (bpd) through new drilling at its Dawes Island field. The field is managed under Petroleum Prospecting License (PPL) 259 by its subsidiary, Petralon 54 Ltd.
Petrol Prices Cut at Dangote Depot
Meanwhile, Dangote Refinery has slashed its petrol depot price to N820 per litre, down from N840 per litre, in a bid to improve affordability and increase distribution across the country. According to a statement from the Group’s spokesperson, the price change takes immediate effect, and more marketers are being engaged to boost nationwide supply.
Why This Matters
The developments reflect a broader strategy to strengthen Nigeria’s energy independence, improve the balance of payments, and ensure price stability for consumers. With local producers expanding output and Dangote refining more domestic crude, Nigeria stands to significantly reduce its reliance on foreign fuel imports, support local industry, and retain more value from its natural resources.
