India Buys Nigerian Crude as Dangote Refinery Leans on US Oil Imports

LAGOS/NEW DELHI — In a development that industry experts are calling an “oil trade irony,” India’s state-run refiners are buying millions of barrels of Nigerian crude while Nigeria’s own Dangote Petroleum Refinery—Africa’s largest—is increasingly sourcing its feedstock from the United States.

According to industry sources cited by Reuters, Indian Oil Corporation (IOC) recently purchased one million barrels of Nigeria’s Agbami crude for September delivery in a tender awarded to global commodities trader Trafigura. This acquisition is part of a broader procurement drive that has seen Indian refiners secure significant volumes from non-Russian suppliers.

Ironically, while Indian refiners are ramping up purchases of Nigerian grades, the $20 billion Dangote refinery in Lagos has shifted heavily toward US crude imports, despite having a naira-for-crude agreement with the Federal Government. Data from commodities analytics firm Kpler shows that in July, the refinery imported about 590,000 barrels per day (bpd) of crude—its highest monthly intake to date—with US oil making up 60 percent of the total and Nigerian grades accounting for just 40 percent.

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India Diversifies Supply Away from Russia

The surge in Indian purchases of Nigerian oil comes amid a slowdown in Russian crude imports. Following Russia’s 2022 invasion of Ukraine, Indian refiners became some of the largest buyers of discounted Russian oil. However, under pressure from the United States, they began scaling back those purchases in late July.

Alongside Nigerian oil, Indian refiners have recently secured volumes from Angola, Abu Dhabi, and the US. Reports indicate that Bharat Petroleum Corporation Limited (BPCL) bought barrels for September arrival through direct negotiations, including one million barrels of Angola’s Girassol, one million barrels of US Mars crude, three million barrels of Abu Dhabi Murban, and two million barrels of Nigerian grades.

In total, more than two million barrels of Nigerian crude are scheduled for delivery to India in September and October.

Dangote Turns to the US for Supply

For the Dangote Petroleum Refinery, the shift toward US crude marks a significant change in sourcing strategy. While Nigerian grades such as Amenam, Bonny Light, and Escravos still feature in its feedstock, the facility is now relying more heavily on West Texas Intermediate (WTI) from the US.

Kpler attributes this to several factors, including competitive US pricing and the difficulty US crude exporters have faced in finding buyers in Asia due to increased OPEC+ output and weaker Murban spot premiums earlier in the year.

Dangote has long complained about the challenges of securing sufficient domestic crude under Nigeria’s Domestic Crude Supply Obligations (DCSO). In July, its crude inventories rose to 6.73 million barrels—up 2.5 million barrels from June—indicating that some imports were being stored rather than immediately processed.

Operational Constraints

While operating at about 85 percent of its 650,000 bpd nameplate capacity, the refinery plans to ramp up to 700,000 bpd. This would boost gasoline output from 300,000 bpd to an estimated 322,000 bpd, given its 46 percent gasoline yield. However, Kpler cautions that sustaining full capacity will be challenging due to expected maintenance downtime and mechanical issues.

The refinery’s 204,000 bpd Residual Fluid Catalytic Cracking (RFCC) unit has faced operational issues since January, prompting Dangote to import around 22,000 tonnes of condensate naphtha monthly to feed its gasoline production lines.

Domestic Oil Sector Shows Signs of Growth

Despite Dangote’s sourcing challenges, Nigeria’s upstream sector has shown signs of improvement. Crude and condensate output held steady at 1.75 million bpd in July, the highest three-month average in more than five years.

Rising onshore production and fewer pipeline disruptions have supported the uptick. For example, reduced outages at Jones Creek have doubled exports from the Ugo Ocha terminal to 65,000 bpd. The CJ crude grade hit a year-high production of 55,000 bpd in June, though recent cargoes were shipped to Canada and re-exported to the US instead of supplying local refineries.

Infrastructure developments are also gaining momentum. Green Energy’s Otakikpo terminal became Nigeria’s first privately built onshore export facility in over 50 years, while Conoil completed its first Obodo crude shipment. Renaissance Africa Energy is preparing to scale up production after acquiring Shell’s onshore assets.

Exports and Market Reach

Dangote has already begun exporting refined products, with President Aliko Dangote announcing that the refinery made Nigeria a net exporter of petroleum products in mid-2025. Between June and July, the facility reportedly exported about one million tonnes of petrol, with additional shipments of jet fuel to West Africa and Northwest Europe.

Some volumes of gasoline have also been sent to Oman and Ivory Coast. This export activity is likely to increase once the refinery reaches its higher processing targets, although domestic demand for gasoline remains its primary market.

Kpler projects Nigeria’s crude and condensate supply to average about 1.65 million bpd for the rest of 2025, slightly higher than in the second half of last year but with no major new production expected in the near term. The firm expects stronger gains in 2026 as local producers ramp up output through new drilling campaigns and reactivated wells.

For now, the “oil trade irony” remains—a situation where Nigeria’s prized crude is heading to India, while its flagship refinery runs mainly on American oil. Whether this shifts in the near future will depend on how quickly Nigeria can resolve domestic supply constraints and improve alignment between its upstream and refining sectors.