{"id":1829686,"date":"2026-03-16T14:00:30","date_gmt":"2026-03-16T11:00:30","guid":{"rendered":"https:\/\/analyse.optim.biz\/?p=1829686"},"modified":"2026-03-16T14:00:30","modified_gmt":"2026-03-16T11:00:30","slug":"why-nigerias-largest-refinery-is-importing-us-oil","status":"publish","type":"post","link":"https:\/\/analyse.optim.biz\/?p=1829686","title":{"rendered":"Why Nigeria’s largest refinery is importing US oil"},"content":{"rendered":"

[analyse_image type=”featured” src=”https:\/\/static.dw.com\/image\/76354450_6.jpg”]<\/p>\n

\n
\n
\n
https:\/\/p.dw.com\/p\/5ASx1<\/span><\/div>\n<\/section>\n
The Niger Delta is one of Africa’s oil production centersImage: Pius Utomi Ekpei\/AFP<\/small><\/figcaption><\/figure>\n
\n

The Strait of Hormuz off the coast of Iran<\/a> is of central importance for the trade of oil and liquefied natural gas<\/a>. To date, approximately one fifth of all oil transport around the globe has\u00a0been routed through this bottleneck.<\/p>\n

That’s why the strait’s closure has fueled\u00a0supply fears among buyers\u00a0and raised\u00a0questions about alternative sources of supply\u00a0\u2015\u00a0including oil sourced from Africa.<\/p>\n

Can Africa’s oil-producing countries increase their production<\/a> in the short term and thus help stabilize global market prices? Dependence on crude oil in particular is so great that the price increases since the start of the US-Israeli attacks on Iran<\/a> have raised worries not only among\u00a0companies relying on the energy sector, but have also sounded alarm bells within governments and among consumers worldwide.<\/p>\n

“[Africa’s oil and gas sector]\u00a0can help, but not quickly enough and not on the scale that would be required,” Robert Kappel, the former president of the Hamburg-based GIGA Institute (German Institute for Global and Area Studies), told DW.<\/p>\n

What role does Africa’s energy supply play in the short term?<\/h2>\n

Africa’s\u00a0contribution to alleviate the stresses of\u00a0the current supply and price crisis for oil and gas can only be limited, says Stefan Liebing, managing director of the investment company Conjuncta, which\u00a0focuses on the African continent.<\/p>\n

“Africa’s role lies more in the medium term, especially in the supply of natural gas,” Liebing told DW.\u00a0<\/p>\n

He added\u00a0that since 2022,\u00a0European buyers have already\u00a0been competing for African gas, as they no longer wish\u00a0to purchase reserves\u00a0from Russia.\u00a0<\/p>\n

Nigeria: no short-term solution<\/h2>\n

Africa’s largest oil producer, Nigeria<\/a>,\u00a0“definitely has the potential” for higher production output volumes, says Nigerian analyst Ayodele Oni.<\/p>\n

“The biggest obstacle is the lack of significant spare capacity,”\u00a0Oni told DW, stressing the fact\u00a0that the West African nation\u00a0currently does not have the full technical and operational capacity to respond to the sudden\u00a0supply disruptions.<\/p>\n

In the International Energy Agency’s (IEA) oil market monthly report for March 2026, Nigeria’s production was listed at 1.42 million barrels per day \u2014 with additional available capacity at zero.<\/p>\n

“The current production level already reflects the maximum volume the country can maintain in the short term,” Oni explains. “There is no buffer that could be quickly activated in response to market shocks.”<\/p>\n

\"A
The privately owned Dangote Refinery in Nigeria is running at capacityImage: Sodiq Adelakun\/REUTERS<\/small><\/figcaption><\/figure>\n

To produce more, significant investments would be necessary \u2014\u00a0at best, there would be a chance to make arrangements for the medium term.<\/p>\n

What does Nigeria’s\u00a0oil industry need to increase its output?<\/h2>\n

According to Oni, there also are issues that\u00a0hinder rapid production growth, which would need to be addressed first, such as inadequate infrastructure, an outdated pipeline network, underfunding, and security problems in the Niger Delta<\/a>, the center of Nigeria’s oil economy. Add to that the lengthy\u00a0development periods that major upstream projects take, especially deepwater developments, and it becomes clear that increasing production would be no easy feat.<\/p>\n

“For such projects [deepwater developments], several years often pass between investment approval and the first oil production. That means even rising global prices that create incentives for investment would not immediately bring new volumes to market,”\u00a0Oni emphasizes.<\/p>\n

Although Nigeria has not introduced any new measures in response to the current global supply crisis, initiatives to increase oil and gas production are now being pushed forward.<\/p>\n

As one example, Oni cites the government-backed “One Million Barrels” project, which focuses on reactivating shut-in wells, accelerating interventions\u00a0and removing regulatory delays that had previously slowed field operations.<\/p>\n

Tax reforms are also intended to attract investment and support production growth as part of that package.<\/p>\n

\n

Why Nigeria’s largest refinery is importing US oil<\/h2>\n

Despite improvements in security, less oil theft\u00a0and better monitoring processes, Nigeria’s oil production is still nowhere near the level that the government of President Bola Tinubu had set as a target when\u00a0taking office, says\u00a0Clementine Wallop, senior analyst for Sub-Saharan Africa at the consulting firm Horizon Engage.\u00a0<\/p>\n

“In this crisis situation, Nigeria will continue with all these initiatives. But no magic button can simply be pressed to allow the country to benefit from higher prices\u00a0and ease the supply crisis on the market,” Wallop highlights.<\/p>\n

Nigeria: selling crude to import refined fuels<\/h2>\n

Another problem \u2014\u00a0albeit primarily\u00a0for the domestic market rather than for the global economy \u2014\u00a0\u00a0is the dilapidated state of the country’s state-run refineries to process oil.<\/p>\n

According to analyst Oni, Nigeria had been largely dependent on importing\u00a0refined fuels while\u00a0exporting\u00a0crude oil in the past, mainly to use the proceeds of the export sales to buy gasoline and diesel for the domestic market.<\/p>\n

Since 2024, this situation has somewhat improved: In Lagos, 650,000 barrels are processed daily in Africa’s largest private refinery, built by multi-billionaire Aliko Dangote.<\/p>\n

The Dangote refinery now supplies the domestic market with around 60 million liters of fuel per day, in the absence of sufficient state infrastructures able to meet public demand.<\/p>\n

\n

Can Nigeria and Angola shield Africa from oil hikes?<\/h2>\n

How much oil could Angola bring to market?<\/h2>\n

Sub-Saharan Africa’s second-largest oil producer is Angola<\/a>. The country in southwestern Africa left the international oil cartel OPEC in 2023 in order to decide more flexibly on how much oil it chooses to bring\u00a0to world markets and when.<\/p>\n

Luanda is investing heavily in\u00a0increasing\u00a0oil production volumes while also expanding the development of natural gas reserves for the LNG market, giving it somewhat of a competitive edge.<\/p>\n

Angolan energy expert Flavio Inocencio told DW: “Angola has become attractive again for Western investors because of the war in Ukraine and the crisis in the Middle East.”<\/p>\n

Angola’s<\/a> government has so far\u00a0remained cautious in its response to the latest developments: News agency Bloomberg quoted Economy Minister Jose\u00a0de Lima Massano on March 6 as saying that price increases always bring “positive news” for oil-producing countries.<\/p>\n

At the same time, however, he warned that imports of other goods needed in his country would also become more expensive due to higher transport costs affecting everyone.<\/p>\n

Analyst Inocencio has a more sober view.\u00a0He believes that\u00a0even if African oil producers such as Nigeria and Angola could supply more crude oil<\/a> in the short term, they would not be able to compensate for the volumes lost due to the conflict\u00a0in the Middle East.<\/p>\n

“Africa produces only ten percent of global output,”\u00a0Inocencio said.\u00a0“That is not enough to replace the roughly 20 million barrels of oil that are shipped through the Strait of Hormuz<\/a> every day.”<\/p>\n

\n

Iran war threatens East Africa’s economy<\/h2>\n

Jamiu Abiodun, Ololade Adewuyi and Sandra Quiala contributed to this article. It\u00a0was originally published in German.<\/em><\/p>\n<\/div>\n<\/div>\n<\/article>\n

\n

The Strait of Hormuz off the coast of Iran<\/a> is of central importance for the trade of oil and liquefied natural gas<\/a>. To date, approximately one fifth of all oil transport around the globe has\u00a0been routed through this bottleneck.<\/p>\n

That’s why the strait’s closure has fueled\u00a0supply fears among buyers\u00a0and raised\u00a0questions about alternative sources of supply\u00a0\u2015\u00a0including oil sourced from Africa.<\/p>\n

Can Africa’s oil-producing countries increase their production<\/a> in the short term and thus help stabilize global market prices? Dependence on crude oil in particular is so great that the price increases since the start of the US-Israeli attacks on Iran<\/a> have raised worries not only among\u00a0companies relying on the energy sector, but have also sounded alarm bells within governments and among consumers worldwide.<\/p>\n

“[Africa’s oil and gas sector]\u00a0can help, but not quickly enough and not on the scale that would be required,” Robert Kappel, the former president of the Hamburg-based GIGA Institute (German Institute for Global and Area Studies), told DW.<\/p>\n

What role does Africa’s energy supply play in the short term?<\/h2>\n

Africa’s\u00a0contribution to alleviate the stresses of\u00a0the current supply and price crisis for oil and gas can only be limited, says Stefan Liebing, managing director of the investment company Conjuncta, which\u00a0focuses on the African continent.<\/p>\n

“Africa’s role lies more in the medium term, especially in the supply of natural gas,” Liebing told DW.\u00a0<\/p>\n

He added\u00a0that since 2022,\u00a0European buyers have already\u00a0been competing for African gas, as they no longer wish\u00a0to purchase reserves\u00a0from Russia.\u00a0<\/p>\n

Nigeria: no short-term solution<\/h2>\n

Africa’s largest oil producer, Nigeria<\/a>,\u00a0“definitely has the potential” for higher production output volumes, says Nigerian analyst Ayodele Oni.<\/p>\n

“The biggest obstacle is the lack of significant spare capacity,”\u00a0Oni told DW, stressing the fact\u00a0that the West African nation\u00a0currently does not have the full technical and operational capacity to respond to the sudden\u00a0supply disruptions.<\/p>\n

In the International Energy Agency’s (IEA) oil market monthly report for March 2026, Nigeria’s production was listed at 1.42 million barrels per day \u2014 with additional available capacity at zero.<\/p>\n

“The current production level already reflects the maximum volume the country can maintain in the short term,” Oni explains. “There is no buffer that could be quickly activated in response to market shocks.”<\/p>\n

\"A
The privately owned Dangote Refinery in Nigeria is running at capacityImage: Sodiq Adelakun\/REUTERS<\/small><\/figcaption><\/figure>\n

To produce more, significant investments would be necessary \u2014\u00a0at best, there would be a chance to make arrangements for the medium term.<\/p>\n

What does Nigeria’s\u00a0oil industry need to increase its output?<\/h2>\n

According to Oni, there also are issues that\u00a0hinder rapid production growth, which would need to be addressed first, such as inadequate infrastructure, an outdated pipeline network, underfunding, and security problems in the Niger Delta<\/a>, the center of Nigeria’s oil economy. Add to that the lengthy\u00a0development periods that major upstream projects take, especially deepwater developments, and it becomes clear that increasing production would be no easy feat.<\/p>\n

“For such projects [deepwater developments], several years often pass between investment approval and the first oil production. That means even rising global prices that create incentives for investment would not immediately bring new volumes to market,”\u00a0Oni emphasizes.<\/p>\n

Although Nigeria has not introduced any new measures in response to the current global supply crisis, initiatives to increase oil and gas production are now being pushed forward.<\/p>\n

As one example, Oni cites the government-backed “One Million Barrels” project, which focuses on reactivating shut-in wells, accelerating interventions\u00a0and removing regulatory delays that had previously slowed field operations.<\/p>\n

Tax reforms are also intended to attract investment and support production growth as part of that package.<\/p>\n

\n

Why Nigeria’s largest refinery is importing US oil<\/h2>\n

Despite improvements in security, less oil theft\u00a0and better monitoring processes, Nigeria’s oil production is still nowhere near the level that the government of President Bola Tinubu had set as a target when\u00a0taking office, says\u00a0Clementine Wallop, senior analyst for Sub-Saharan Africa at the consulting firm Horizon Engage.\u00a0<\/p>\n

“In this crisis situation, Nigeria will continue with all these initiatives. But no magic button can simply be pressed to allow the country to benefit from higher prices\u00a0and ease the supply crisis on the market,” Wallop highlights.<\/p>\n

Nigeria: selling crude to import refined fuels<\/h2>\n

Another problem \u2014\u00a0albeit primarily\u00a0for the domestic market rather than for the global economy \u2014\u00a0\u00a0is the dilapidated state of the country’s state-run refineries to process oil.<\/p>\n

According to analyst Oni, Nigeria had been largely dependent on importing\u00a0refined fuels while\u00a0exporting\u00a0crude oil in the past, mainly to use the proceeds of the export sales to buy gasoline and diesel for the domestic market.<\/p>\n

Since 2024, this situation has somewhat improved: In Lagos, 650,000 barrels are processed daily in Africa’s largest private refinery, built by multi-billionaire Aliko Dangote.<\/p>\n

The Dangote refinery now supplies the domestic market with around 60 million liters of fuel per day, in the absence of sufficient state infrastructures able to meet public demand.<\/p>\n

\n

Can Nigeria and Angola shield Africa from oil hikes?<\/h2>\n

How much oil could Angola bring to market?<\/h2>\n

Sub-Saharan Africa’s second-largest oil producer is Angola<\/a>. The country in southwestern Africa left the international oil cartel OPEC in 2023 in order to decide more flexibly on how much oil it chooses to bring\u00a0to world markets and when.<\/p>\n

Luanda is investing heavily in\u00a0increasing\u00a0oil production volumes while also expanding the development of natural gas reserves for the LNG market, giving it somewhat of a competitive edge.<\/p>\n

Angolan energy expert Flavio Inocencio told DW: “Angola has become attractive again for Western investors because of the war in Ukraine and the crisis in the Middle East.”<\/p>\n

Angola’s<\/a> government has so far\u00a0remained cautious in its response to the latest developments: News agency Bloomberg quoted Economy Minister Jose\u00a0de Lima Massano on March 6 as saying that price increases always bring “positive news” for oil-producing countries.<\/p>\n

At the same time, however, he warned that imports of other goods needed in his country would also become more expensive due to higher transport costs affecting everyone.<\/p>\n

Analyst Inocencio has a more sober view.\u00a0He believes that\u00a0even if African oil producers such as Nigeria and Angola could supply more crude oil<\/a> in the short term, they would not be able to compensate for the volumes lost due to the conflict\u00a0in the Middle East.<\/p>\n

“Africa produces only ten percent of global output,”\u00a0Inocencio said.\u00a0“That is not enough to replace the roughly 20 million barrels of oil that are shipped through the Strait of Hormuz<\/a> every day.”<\/p>\n

\n

Iran war threatens East Africa’s economy<\/h2>\n

Jamiu Abiodun, Ololade Adewuyi and Sandra Quiala contributed to this article. It\u00a0was originally published in German.<\/em><\/p>\n<\/div>\n

The Strait of Hormuz off the coast of Iran<\/a> is of central importance for the trade of oil and liquefied natural gas<\/a>. To date, approximately one fifth of all oil transport around the globe has\u00a0been routed through this bottleneck.<\/p>\n

That’s why the strait’s closure has fueled\u00a0supply fears among buyers\u00a0and raised\u00a0questions about alternative sources of supply\u00a0\u2015\u00a0including oil sourced from Africa.<\/p>\n

Can Africa’s oil-producing countries increase their production<\/a> in the short term and thus help stabilize global market prices? Dependence on crude oil in particular is so great that the price increases since the start of the US-Israeli attacks on Iran<\/a> have raised worries not only among\u00a0companies relying on the energy sector, but have also sounded alarm bells within governments and among consumers worldwide.<\/p>\n

“[Africa’s oil and gas sector]\u00a0can help, but not quickly enough and not on the scale that would be required,” Robert Kappel, the former president of the Hamburg-based GIGA Institute (German Institute for Global and Area Studies), told DW.<\/p>\n

Africa’s\u00a0contribution to alleviate the stresses of\u00a0the current supply and price crisis for oil and gas can only be limited, says Stefan Liebing, managing director of the investment company Conjuncta, which\u00a0focuses on the African continent.<\/p>\n

“Africa’s role lies more in the medium term, especially in the supply of natural gas,” Liebing told DW.\u00a0<\/p>\n

He added\u00a0that since 2022,\u00a0European buyers have already\u00a0been competing for African gas, as they no longer wish\u00a0to purchase reserves\u00a0from Russia.\u00a0<\/p>\n

Africa’s largest oil producer, Nigeria<\/a>,\u00a0“definitely has the potential” for higher production output volumes, says Nigerian analyst Ayodele Oni.<\/p>\n

“The biggest obstacle is the lack of significant spare capacity,”\u00a0Oni told DW, stressing the fact\u00a0that the West African nation\u00a0currently does not have the full technical and operational capacity to respond to the sudden\u00a0supply disruptions.<\/p>\n

In the International Energy Agency’s (IEA) oil market monthly report for March 2026, Nigeria’s production was listed at 1.42 million barrels per day \u2014 with additional available capacity at zero.<\/p>\n

“The current production level already reflects the maximum volume the country can maintain in the short term,” Oni explains. “There is no buffer that could be quickly activated in response to market shocks.”<\/p>\n

To produce more, significant investments would be necessary \u2014\u00a0at best, there would be a chance to make arrangements for the medium term.<\/p>\n

According to Oni, there also are issues that\u00a0hinder rapid production growth, which would need to be addressed first, such as inadequate infrastructure, an outdated pipeline network, underfunding, and security problems in the Niger Delta<\/a>, the center of Nigeria’s oil economy. Add to that the lengthy\u00a0development periods that major upstream projects take, especially deepwater developments, and it becomes clear that increasing production would be no easy feat.<\/p>\n

“For such projects [deepwater developments], several years often pass between investment approval and the first oil production. That means even rising global prices that create incentives for investment would not immediately bring new volumes to market,”\u00a0Oni emphasizes.<\/p>\n

Although Nigeria has not introduced any new measures in response to the current global supply crisis, initiatives to increase oil and gas production are now being pushed forward.<\/p>\n

As one example, Oni cites the government-backed “One Million Barrels” project, which focuses on reactivating shut-in wells, accelerating interventions\u00a0and removing regulatory delays that had previously slowed field operations.<\/p>\n

Tax reforms are also intended to attract investment and support production growth as part of that package.<\/p>\n

To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video<\/a><\/p>\n

Despite improvements in security, less oil theft\u00a0and better monitoring processes, Nigeria’s oil production is still nowhere near the level that the government of President Bola Tinubu had set as a target when\u00a0taking office, says\u00a0Clementine Wallop, senior analyst for Sub-Saharan Africa at the consulting firm Horizon Engage.\u00a0<\/p>\n

“In this crisis situation, Nigeria will continue with all these initiatives. But no magic button can simply be pressed to allow the country to benefit from higher prices\u00a0and ease the supply crisis on the market,” Wallop highlights.<\/p>\n

Another problem \u2014\u00a0albeit primarily\u00a0for the domestic market rather than for the global economy \u2014\u00a0\u00a0is the dilapidated state of the country’s state-run refineries to process oil.<\/p>\n

According to analyst Oni, Nigeria had been largely dependent on importing\u00a0refined fuels while\u00a0exporting\u00a0crude oil in the past, mainly to use the proceeds of the export sales to buy gasoline and diesel for the domestic market.<\/p>\n

Since 2024, this situation has somewhat improved: In Lagos, 650,000 barrels are processed daily in Africa’s largest private refinery, built by multi-billionaire Aliko Dangote.<\/p>\n

The Dangote refinery now supplies the domestic market with around 60 million liters of fuel per day, in the absence of sufficient state infrastructures able to meet public demand.<\/p>\n

To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video<\/a><\/p>\n

Sub-Saharan Africa’s second-largest oil producer is Angola<\/a>. The country in southwestern Africa left the international oil cartel OPEC in 2023 in order to decide more flexibly on how much oil it chooses to bring\u00a0to world markets and when.<\/p>\n

Luanda is investing heavily in\u00a0increasing\u00a0oil production volumes while also expanding the development of natural gas reserves for the LNG market, giving it somewhat of a competitive edge.<\/p>\n

Angolan energy expert Flavio Inocencio told DW: “Angola has become attractive again for Western investors because of the war in Ukraine and the crisis in the Middle East.”<\/p>\n

Angola’s<\/a> government has so far\u00a0remained cautious in its response to the latest developments: News agency Bloomberg quoted Economy Minister Jose\u00a0de Lima Massano on March 6 as saying that price increases always bring “positive news” for oil-producing countries.<\/p>\n

At the same time, however, he warned that imports of other goods needed in his country would also become more expensive due to higher transport costs affecting everyone.<\/p>\n

Analyst Inocencio has a more sober view.\u00a0He believes that\u00a0even if African oil producers such as Nigeria and Angola could supply more crude oil<\/a> in the short term, they would not be able to compensate for the volumes lost due to the conflict\u00a0in the Middle East.<\/p>\n

“Africa produces only ten percent of global output,”\u00a0Inocencio said.\u00a0“That is not enough to replace the roughly 20 million barrels of oil that are shipped through the Strait of Hormuz<\/a> every day.”<\/p>\n

To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video<\/a><\/p>\n

Jamiu Abiodun, Ololade Adewuyi and Sandra Quiala contributed to this article. It\u00a0was originally published in German.<\/em><\/p>\n

[analyse_source url=”https:\/\/www.dw.com\/en\/africa-what-oil-producers-can-do-to-counter-price-shocks\/a-76376251″]<\/p>\n","protected":false},"excerpt":{"rendered":"

[analyse_image type=”featured” src=”https:\/\/static.dw.com\/image\/76354450_6.jpg”] https:\/\/p.dw.com\/p\/5ASx1 The Niger Delta is one of Africa’s oil production centersImage: Pius Utomi Ekpei\/AFP The Strait of Hormuz off the coast of Iran is of central importance for the trade of oil and liquefied natural gas. To date, approximately one fifth of all oil transport around the globe has\u00a0been routed through this […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[226,74],"class_list":["post-1829686","post","type-post","status-publish","format-standard","hentry","category-politics","tag-crawlmanager","tag-dw-com"],"_links":{"self":[{"href":"https:\/\/analyse.optim.biz\/index.php?rest_route=\/wp\/v2\/posts\/1829686","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/analyse.optim.biz\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/analyse.optim.biz\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/analyse.optim.biz\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/analyse.optim.biz\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1829686"}],"version-history":[{"count":0,"href":"https:\/\/analyse.optim.biz\/index.php?rest_route=\/wp\/v2\/posts\/1829686\/revisions"}],"wp:attachment":[{"href":"https:\/\/analyse.optim.biz\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1829686"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/analyse.optim.biz\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1829686"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/analyse.optim.biz\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1829686"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}