July 9, 2025
In what seems like a reaction to Houthi attack fallout, Nigerian crude prices surged above $70 per barrel, marginally higher than the major oil contracts traded on the global oil market.
According to reports monitored on nairametrics, major oil contracts reached a two-week high yesterday after fresh Houthi attacks on shipping in the Red Sea raised concerns over supply disruptions.
On Tuesday, Reuters had reported that four crew members aboard the Greek-operated, Liberian-flagged bulk carrier Eternity C were killed by drones and speedboats off Yemen’s coast.
At $72.3 a barrel on Tuesday, Nigerian oil blends, which included Bonny Light, Brass River, and Qua Iboe, settled for $2.7 below the Federal Government’s benchmark for Crude.
Oil prices dipped slightly during Wednesday’s session, mainly because of an uptick in US crude inventory levels. Oil traders also remained cautious ahead of upcoming tariff announcements from President Trump, which also contributed to the decline.
READ MORE; OPEC+ Output Plan Implementation Triggers Oil Prices Decline
While Brent oil futures for September delivery fell to $69.91 per barrel, West Texas Intermediate (WTI) crude futures dropped by 0.4% to $68 per barrel.
The American Petroleum Institute (API) revealed a surprising increase in US crude oil inventories for the week ending July 4, up 7.1 million barrels versus a forecasted draw of 2.8 million barrels, following a previous increase of only 680,000 barrels.
Gasoline inventories fell by 2.2 million barrels, and distillate stocks decreased by 800,000 barrels. Data indicates potential oversupply issues in the US market due to demand and supply challenges. Market participants await the EIA report due later today, which, if aligned with API’s trend, would mark the largest increase since January
Meanwhile, Dangote refinery has hinted of plans to cease crude oil importation entirely by December 2025, aiming to switch fully to Nigerian crude. This transition would eliminate the need for importing and boost the country’s balance of payment.
Dangote refinery recently slashed petrol prices at the depot to N820 per liter, down from N840 per liter. The Group Spokesperson announced that this new price would be effective immediately and that the refinery is now engaging more marketers to distribute the products.
READ MORE; Oil Prices Rise In Response To U.S Strikes On Iran Nuclear Sites
The refinery sourced about half of its crude domestically in June, and suppliers are expected to sell more as their foreign supply commitments end soon.
Vice President of Dangote Industries and head of the 650,000 barrel-per-day Lagos refinery, Devakumar Edwin, said the plant is set to stop receiving foreign crude and will procure feedstock locally.
He stated, “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.” Dangote claims the plant was previously reliant on US imports, even with the naira-for-crude agreement in place.
READ MORE; Oil Prices Increase Despite Fears Of Geopolitical Tensions
Nigeria’s 2024 report from the Nigerian Upstream Petroleum Regulatory Commission confirmed that domestic producers are obligated to supply crude to Dangote and other refineries under the Domestic Crude Supply Obligations directive.
Bloomberg data shows that in June, the refinery obtained 53% of its crude from local producers and 47% from the US. Edwin said the plant is currently processing about 550,000 barrels daily.
Dangote was planning to take five cargoes from the Nigerian National Oil Corporation for July and August, each nearly one million barrels, as reported by Bloomberg. The $20 billion investment in the refinery aims to stop exporting Nigerian crude to Europe, then importing the refined products at high costs.
