Indian refiners are increasing crude oil imports from Nigeria as Russian supplies decline due to fresh sanctions by the US and UK

[dropcap]I[/dropcap]ndian refiners have shifted focus to Nigeria for crude oil supplies following a sharp decline in imports from Russia.

Also read: Dangote refinery’s petrol price slash sparks tension among fuel importers

This change comes as fresh sanctions imposed by the United States and the United Kingdom disrupt Russian oil shipments to major buyers, including India.

According to Bloomberg, India’s crude oil imports from Russia fell by 14.9% in February, reaching their lowest level since January 2023.

The drop follows new sanctions targeting key Russian energy firms and tankers, significantly affecting the country’s ability to export oil.

To compensate for the shortfall, India has turned to alternative suppliers, including Nigeria, Angola, Mexico, and Colombia.

The report highlights that while Russian oil imports have declined, Iraq and Saudi Arabia have increased their shipments to India by 8.3%.

Despite these challenges, Russia has reiterated its commitment to maintaining global oil exports. Russian First Deputy Energy Minister Pavel Sorokin stated, “We are pragmatic. We value our relationships, and we will continue to supply the market.”

As Africa’s leading oil producer, Nigeria ramped up crude production to 1.5 million barrels per day in January, successfully meeting its OPEC quota for the first time in three years.

This increased output has positioned Nigeria as a key supplier for India as it looks for alternatives to Russian oil.

However, despite Nigeria’s crude export boost, local refineries continue to face supply shortages. The Dangote Petroleum Refinery, Africa’s largest refinery, has been actively sourcing crude from international markets to sustain operations.

The Dangote Refinery recently secured its first shipment of one million barrels of Algeria’s Saharan Blend crude, a high-quality light sweet crude with low sulphur content.

According to Argus, the shipment, purchased from trading firm Glencore, is expected to arrive between March 15 and 20.

Saharan Blend crude, known for its premium refining yields, is typically exported to Europe. However, sluggish European demand due to seasonal refinery maintenance has pushed sellers to explore alternative buyers, including Dangote Refinery.

Industry data reveals that nearly 420,000 barrels per day of crude have been delivered to the Lekki-based refinery so far this year, with Nigerian crude making up 87% of total shipments.

While the refinery continues to explore long-term supply deals with international markets such as the United States and Brazil, its founder, Aliko Dangote, has emphasised the importance of securing reliable local crude supply.

Also read: Dangote Group invests $700m to end raw sugar importation in Nigeria

As India shifts its crude import strategy, Nigeria stands to benefit from increased demand. However, the country must address its domestic supply challenges to ensure refineries like Dangote’s can operate at full capacity without relying heavily on foreign crude.