Quick Summary:
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Nigerian crude hits $72.3 per barrel, boosted by Houthi attacks disrupting Red Sea shipping.
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U.S. crude stockpiles unexpectedly surge by 7.1 million barrels, causing midweek price dip.
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Dangote Refinery to switch fully to local crude by December 2025, ending reliance on imports.
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Petralon Energy increases output, while Dangote slashes petrol depot price to ₦820/litre.
Nigerian crude prices rose above $70 per barrel this week, climbing to $72.3 and outperforming global oil benchmarks. This spike comes as Houthi rebel attacks on shipping routes in the Red Sea disrupt global oil supply chains.
Houthi Attacks Spark Market Tensions
Global oil contracts hit a two-week high following renewed Houthi attacks. A Greek-operated bulk carrier, Eternity C, was attacked off Yemen’s coast, resulting in the death of four crew members, according to Reuters.
The fear of escalating disruptions pushed up prices for Nigerian oil blends, including Bonny Light, Brass River, and Qua Iboe.
Midweek Pullback as US Inventory Grows
However, the bullish momentum was tempered on Wednesday. Oil prices dipped slightly due to an unexpected increase in U.S. crude inventories. Brent futures for September fell to $69.91 per barrel, while WTI declined by 0.4% to $68.
The American Petroleum Institute (API) reported a surge of 7.1 million barrels in U.S. crude stockpiles—far higher than the expected draw of 2.8 million barrels. Gasoline inventories dropped by 2.2 million barrels, and distillate stocks fell by 800,000 barrels.
Investors now await the Energy Information Administration (EIA) report to confirm the trend, which could mark the largest weekly build since January.
Dangote Refinery to Go Fully Local by December
In a significant development, the Dangote Refinery plans to completely halt crude oil imports by December 2025. The refinery is transitioning to 100% Nigerian crude, aiming to boost the country’s balance of payment and reduce dependency on foreign oil.
Devakumar Edwin, Vice President of Dangote Industries, stated that long-term foreign contracts are nearing expiration and the refinery will increasingly rely on local producers.
“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 percent to local crude,” Edwin said.
Local Crude Supply Already Surging
In June, 53% of the refinery’s crude was sourced locally, with the rest coming from the U.S. The Nigerian Upstream Petroleum Regulatory Commission mandates domestic producers to prioritize local refineries like Dangote under the Domestic Crude Supply Obligations (DCSO) directive.
Bloomberg reported that Dangote is set to receive five cargoes—nearly one million barrels each—from the Nigerian National Petroleum Corporation in July and August.
Petralon Energy Expands Production
Petralon Energy is also increasing its Nigerian crude output by 2,500 barrels per day through additional drilling at the Dawes Island field, operated under Petroleum Prospecting License PPL 259.
Petrol Prices Reduced at Dangote Depot
In another consumer-focused move, the Dangote refinery cut petrol prices at the depot to ₦820 per litre, down from ₦840. The adjustment takes effect immediately, with more marketers being onboarded for wider distribution.