60 Million Barrels of Nigerian Crude Stranded as Key Buyer Dumps Nigeria For Another Country
- A recent document has shown that about 60 million Nigerian crude oil are floating on the high seas without buyers
- Experts have said that while local refineries are starved of feedstock, oil producers continue to export crude in violation of Nigeria’s laws
- The development comes as Indonesia, a top buyer of Nigeria's crude, has disclosed plans to increase purchases of US crude
Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
About 60 million barrels of crude oil belonging to Nigeria are said to be stranded and unsold.
A recent document shows that the crude is reportedly floating in the high seas as local refineries struggle to secure feedstock amid low supply.
Source: Getty Images
FG warns oil producers against exporting crude
Sources are over the issues faced by local refineries despite threats from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) that crude meant for domestic refineries should not be exported.
The Chief Executive of NUPRC, Gbenga Komolafe, warned in a February 2, 2025, letter that oil firms exporting crude meant for local refineries would be sanctioned.
Under the Petroleum Industry Act (PIA), the Domestic Crude Supply Obligations (DCSO) mandate producers to sell crude to Nigerian refineries to ensure adequate supply for domestic refining.
Local refineries starved of crude
However, sources at some local refineries disclosed that the requirement is not being adhered to as the oil firms continue to breach the Act and sidestep the requirement by selling crude to foreign buyers in the Far East, the Mediterranean Region and South Africa.
The development means that local refineries are being priced out of the market.
According to the Crude Oil Refiners Association of Nigeria (CORAN), the inability of oil producers to meet the DSCO requirements is affecting local facilities.
Daily Trust reports that the CORAN national publicity secretary, Eche Idoko, said crude shortages have halted seven refineries’ progress.
Refinery owners raise the alarm
Idoko said the major challenge is crude availability, stating that Nigeria has not met the OPEC quota until recently.
He said the Edo Refinery, which is planning to expand to 30,000 barrels per day, is in talks with a US-based crude supplier.
Legit.ng reported that the N650,000 bpd-capacity Dangote Refinery purchased crude oil from the US, Angola, and Algeria due to inadequate local supplies.
Top Nigerian crude buyer turns to the US
The development comes as Indonesia, one of Nigeria’s key buyers, plans to increase its energy imports from the US.
The shift from Nigeria’s oil exports is part of Indonesia’s larger plans to address its trade imbalance with the US and avoid a 32% tariff slapped on its exports.
Indonesia to increase crude purchases from the US
According to reports, Indonesia’s Energy Minister, Bahli Lahadalia, disclosed that the country has concluded plans to ramp up its crude imports and liquified petroleum gas (LPG) from the US by about $10 billion.
The move aims at negotiating favourable trade terms and circumventing the impact of US tariffs, leading to reduced purchases from Nigeria, its traditional supplier.
The Southeast Asian country’s strategy to eliminate its trade surplus with the US and avoid a potential 32% tariff on its exports includes buying $18 billion to $19 billion worth of US goods.
Lahadalia recommended raising the country’s imports of US LPG and crude oil as part of the broader plan.
Indonesia imported 306,000 barrels from Nigeria
To make these changes possible, Indonesia would reduce its LPG imports from other markets, potentially reducing them by 20 to 30%, depending on existing terms.
Data shows Nigeria earned about $3.8 billion from crude oil and gas exports to the Asian country in 2023.
Source: Getty Images
Kpler’s ship-tracking data shows that Indonesia bought about 306,000 barrels of crude daily in 2024, with Nigeria, Saudi Arabia, and Angola emerging as the top exporters.
Nigeria’s oil production slumps
Legit.ng earlier reported that following the global crude oil price crash, Nigeria’s average daily crude production declined again in March, threatening the local currency and the national budget.
Data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) shows that the daily crude production figure averaged 1.40 million barrels daily, from 1.465 in February.
In January, Nigeria’s crude production rose slightly above 1.5 million barrels daily, a quota allocated to the nation by the Organisation of Petroleum Exporting Countries (OPEC).
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Source: Legit.ng
