In a striking twist in global oil trade dynamics, Indian refiners are increasing their purchases of Nigerian crude even as Africa’s largest refinery, Nigeria’s $20bn Dangote Petroleum Refinery, sources the bulk of its feedstock from the United States.
Industry sources told Reuters that the Indian Oil Corporation (IOC) recently secured one million barrels of Nigeria’s Agbami crude for September delivery through global trader Trafigura. This is part of a broader strategy by Indian refiners to diversify away from Russian supplies following diplomatic pressure from the United States.
Alongside IOC, Bharat Petroleum Corporation Limited (BPCL) also purchased non-Russian crude for September and October deliveries, including two million barrels from Nigeria. In total, Indian refiners reportedly procured over two million barrels of Nigerian oil for the two months, marking a significant uptick in demand for the West African grade.
Ironically, while Nigerian crude is flowing to India, Dangote Petroleum Refinery in Lagos is increasingly dependent on U.S. imports. Data from commodities analytics firm Kpler shows that in July, the refinery’s intake hit a record 590,000 barrels per day (bpd) — with U.S. grades accounting for 60% (370,000 bpd) and Nigerian grades only 40% (220,000 bpd).
Kpler noted this was the first time U.S. crude overtook Nigerian supply in the refinery’s operations, citing more competitive U.S. pricing, availability of West Texas Intermediate (WTI), and persistent domestic crude supply challenges despite a naira-for-crude agreement with the Federal Government.
The refinery’s Nigerian feedstock largely comprised Amenam, Bonny Light, and Escravos grades. But reduced domestic supply, coupled with logistical hurdles, has forced Dangote to adopt a more flexible sourcing strategy driven by commercial considerations.
Dangote’s crude inventories rose to 6.73 million barrels in July, up by 2.5 million barrels from June, indicating that part of the imported volume is being stored for future use. The refinery is currently operating at 85% of its nameplate capacity, with expansion plans to 700,000 bpd.
On the export front, Dangote has already shipped about 1 million tonnes of petrol (PMS) in 50 days to destinations including Oman and Ivory Coast, alongside jet fuel exports to West Africa and Northwest Europe.
However, analysts caution that achieving sustained full-capacity operations before Q4 2026 may be unrealistic due to likely maintenance needs and mechanical challenges, including ongoing issues at the refinery’s 204,000 bpd Residue Fluid Catalytic Cracking (RFCC) unit.
Meanwhile, Nigeria’s upstream sector is showing signs of resurgence. July’s crude and condensate production averaged 1.75 million bpd, the highest three-month average in over five years, supported by improved onshore stability and fewer pipeline disruptions. Local producers such as Seplat and Renaissance Africa Energy are pushing output growth through new drilling campaigns and asset acquisitions.
Analysts say the contrasting flows — Nigerian crude heading to Asia while Nigeria’s biggest refinery runs mostly on U.S. oil — highlight the evolving complexity of global crude markets, where price, logistics, and geopolitics increasingly shape trade patterns over national supply ambitions.
