India has increased its crude oil imports from Nigeria following a significant decline in Russian supplies, marking a strategic shift in global oil trade dynamics. The drop in Russian exports, attributed to fresh sanctions imposed by the United States and the United Kingdom, has compelled Indian refiners to diversify their crude sources.
According to a Bloomberg report, India’s crude oil imports from Russia fell to their lowest level since January 2023, dropping by 14.9 percent in February to an average of 1.4 million barrels per day. The decline follows sanctions that targeted major Russian oil producers, including Gazprom Neft and Surgutneftegas, as well as 183 oil tankers involved in Russian crude transportation.
To compensate for the shortfall, Indian refiners turned to Nigeria, Angola, Mexico, and Colombia. Data from Kpler cited by Bloomberg revealed that while Russia’s crude supply dwindled, imports from Iraq surged by 8.3 percent, with Nigeria and other nations filling the gap.
As Africa’s top oil producer, Nigeria ramped up its crude production to 1.5 million barrels per day in January, meeting its OPEC quota for the first time in three years. Despite this, domestic refineries continue to experience crude shortages, leading to increased dependence on foreign imports.
The Dangote Petroleum Refinery, Nigeria’s largest refining facility, recently secured its first shipment of one million barrels of Algeria’s premium light sweet Saharan Blend crude. The purchase, facilitated by trading firm Glencore, signifies Dangote Refinery’s efforts to diversify its crude supply sources as it scales up operations to reach its full refining capacity of 650,000 barrels per day.
The Saharan Blend, known for its low sulfur content and high refining yields, has traditionally been exported to Europe. However, with European refiners slowing down purchases due to seasonal maintenance and ample light crude supply, sellers have turned to alternative markets, including Nigeria.
Beyond Algeria, the Dangote refinery has been actively seeking long-term crude supply agreements from international markets, including the United States and Brazil. Speaking last year, Aliko Dangote, the refinery’s founder, underscored the importance of securing reliable crude sources to sustain operations.
“We will start importing crude oil from African countries. When we get to those countries, we’ll start negotiating with them and bringing in supplies from there,” Dangote stated. However, he noted that if Nigeria’s crude were more readily available, there would be no need to import from abroad.
As the largest refinery in Africa, the Dangote facility commenced crude processing in January, producing essential petroleum products such as diesel, naphtha, and jet fuel. With its growing crude procurement strategy, the refinery is poised to play a pivotal role in reshaping the regional and global oil market landscape.
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