State refineries in India are increasing their purchases of Nigerian crude, while the $20 billion Dangote Petroleum Refinery in Lagos is sourcing more and more from the US.
Over two million barrels of Nigerian grades, including Agbami, were recently secured by Indian Oil Corporation and Bharat Petroleum for delivery in September and October after Russian oil imports were halted due to pressure from the United States.
On the other hand, because of high prices for West Texas Intermediate and local feedstock shortages, Dangote’s July intake reached a record 590,000 barrels per day, with 60% coming from US crude, surpassing Nigerian supply for the first time. Nigerian supply, which included Escravos, Bonny Light, and Amenam, dropped to 220,000 bpd in August.
Even with a naira-for-crude agreement with the government, Dangote still has problems with domestic sourcing. Due to increased onshore production and fewer pipeline interruptions, Nigeria’s total crude output remained stable in July at 1.75 million barrels per day, the highest three-month average in more than five years.
As part of a logistics program that started on August 15, Dangote has started rolling out 4,000 trucks powered by compressed natural gas, valued at ₦720 billion, in an effort to reduce costs and enhance supply.
In addition to lowering distribution costs, reducing emissions, and improving fuel availability nationwide, the fleet is expected to generate 15,000 jobs and save over ₦1.7 trillion annually.
With a 46% gasoline yield, the refinery is currently running at 85% of its 650,000 bpd capacity and intends to increase to 700,000 bpd. However, experts warn that because of continuous maintenance issues, full-capacity operations might not be viable before late 2026.
Rapid changes in trade flows and infrastructure are occurring in Nigeria’s oil sector as a result of Dangote utilizing US supply, India purchasing more Nigerian crude, and the arrival of a sizable CNG fleet.
