The United States became a net exporter of crude oil to Nigeria in February and March, as crude demand on the US East Coast slowed due to refinery maintenance and the Dangote refinery drove up Nigeria’s demand for inputs, the US Energy Information Administration (EIA) has said in a note.
This follows Nigeria’s inability to meet its domestic crude oil supply obligation to local refiners, especially the Dangote refinery, a development that is threatening both its refining ambitions and economic stability.
While the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has introduced clear guidelines to support the Domestic Crude Supply Obligation (DCSO), including how much oil should go to local refineries, implementation has remained patchy.
Producers, particularly international oil companies, have often cited long-term export contracts as reasons for their inability or unwillingness to divert crude for domestic use. Many of these contracts, they insist, were tied to project financing arrangements, making them difficult to renegotiate in favour of the local market.
Therefore, the Dangote Refinery, which was supposed to be a game-changer in Nigeria’s refining sector, has had to resort to importing crude because of domestic supply shortfalls.
Refineries under the Crude Oil Refiners Association of Nigeria (CORAN) have also echoed the same frustration, noting that though they are ready to process crude, they can’t secure consistent supply. Nigeria’s budget benchmark oil production for 2025 is 2.06 million barrels per day while current production has continued to hover around 1.7 million bpd, including condensate.
This is the first time that the US has exported more crude oil to Nigeria than it imported, the EIA document which was reported by Reuters stated, stressing that Nigeria has generally been considered a source for US crude oil imports, ranking ninth last year.
Nigeria’s Dangote oil refinery – the largest in Africa, located on the outskirts of Lagos – began processing crude in January 2024 after years of delays. The refinery is set to reach full capacity of 650,000 b/d this year, according to the EIA.
Gross US exports of crude to Nigeria touched 111,000 bpd in February and 169,000 bpd in March, the report added. Imports, which were at 133,000 bpd in January, dropped to 54,000 bpd and 72,000 bpd in February and March respectively, the report said.
The decline in imports, according to the report, is largely due to maintenance at the Phillips 66 Bayway refinery New Jersey, per the EIA. However, imports increased later in the year as the Bayway refinery resumed normal operations in April, and Dangote underwent some unplanned maintenance.
However, the trend seems more a snapshot of a very fluid market, rather than a permanent realignment, according to Senior Market Strategist at RJO Futures, Eli Tesfaye.
“The new refinery in Nigeria and some issues in securing domestic supplies played a role for those unique flows earlier this year. But going forward, with the refinery now aiming to secure domestic flows, and probably looking at other crude grades, it is difficult to forecast if the volume flowing from the US to Nigeria will persist,” agreed Giovanni Staunovo, an analyst at UBS.
Emmanuel Addeh
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