Oil Prices Near $117 as Nigeria’s Crude Supply to Local Refineries Falls 6.3%

Global oil markets have come under renewed pressure as geopolitical tensions drive uncertainty over crude supplies, pushing international prices towards $117 per barrel even as Nigeria grapples with declining crude deliveries to its domestic refineries.

Data from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) show that domestic crude oil supply to Nigerian refineries fell by 6.3 per cent to 15.97 million barrels in September 2026, compared with 17.05 million barrels recorded in August.

The decline comes at a critical time for Nigeria’s petroleum industry, as the country seeks to expand domestic refining capacity, reduce dependence on imported petroleum products and improve the stability of fuel supply.

The figures also highlight the challenges facing local refiners in securing sufficient feedstock to sustain production while international oil prices remain volatile.

Global Tensions Drive Crude Oil Prices Higher.

International crude oil prices are influenced by a combination of geopolitical developments, production decisions, supply disruptions and expectations about global demand.

When tensions threaten major oil-producing regions or important shipping routes, traders often anticipate possible supply interruptions, prompting prices to rise.

Crude prices approaching $117 per barrel therefore reflect the sensitivity of the international market to geopolitical uncertainty and the potential consequences of disruptions to global oil flows.

For oil-producing countries such as Nigeria, higher international prices can increase export earnings and government revenue when production volumes and sales conditions remain favourable.

However, higher prices can also increase the cost of crude purchased by domestic refiners, particularly when supplies are priced against international benchmarks.

The impact on consumers depends on several factors, including exchange rates, refining costs, transportation expenses, distribution margins and domestic market conditions.

Nigeria’s position is particularly complex because the country produces crude oil for export while also operating a domestic petroleum market that depends on the consistent availability of refined products.

NMDPRA Reports Decline in Domestic Crude Deliveries.

According to the NMDPRA’s September 2026 Midstream and Downstream Report, crude deliveries to domestic refineries declined from 17.05 million barrels in August to 15.97 million barrels in September.

The reduction represents a monthly decline of approximately 1.08 million barrels.

Between January and September 2026, Nigerian refineries received a combined 156.51 million barrels of crude oil. Of this volume, 125.85 million barrels came from domestic sources, while 30.66 million barrels were imported.

Domestic crude accounted for 80.4 per cent of the total refinery intake during the nine-month period, with imported crude contributing the remaining 19.6 per cent.

Although locally sourced crude remained the dominant feedstock, the September figures demonstrate that the volume delivered to refineries can fluctuate from month to month.

Such variations can affect refinery planning, operating costs and the quantity of petroleum products available to the domestic market.

The figures also reinforce the importance of improving the reliability of crude supply agreements and ensuring that domestic refining operations can obtain the feedstock required to meet production targets.

Dangote Refinery Operates Above Installed Capacity.

Despite the decline in crude deliveries, the Dangote Petroleum Refinery recorded a capacity utilisation rate of 105.98 per cent in September, according to the NMDPRA report.

The refinery processed approximately 689,000 barrels of crude oil daily, compared with average crude receipts of about 618,000 barrels per day.

The difference of approximately 71,000 barrels per day was met through existing crude inventories.

Operating above its installed capacity indicates that the refinery processed crude at a rate exceeding its stated nameplate capacity during the reporting period. It does not mean that the refinery received more crude than it required from domestic suppliers.

The distinction is important because refinery utilisation, crude deliveries and finished-product supply measure different aspects of petroleum operations.

A refinery may maintain high processing rates by drawing on stored feedstock, but replenishing those inventories becomes important if the refinery intends to sustain operations at a similar level.

The September data therefore raise questions about the consistency of crude deliveries and the need to maintain sufficient inventories to reduce the risk of future supply disruptions.

Petrol Supply Declines Despite Domestic Refining.

The crude supply decline coincided with a significant reduction in petrol receipts across Nigeria during September.

The NMDPRA reported that average daily petrol receipts fell by 23.4 per cent to 38.7 million litres from 50.5 million litres in August.

Petrol supplied by domestic refineries declined by approximately 20.6 per cent, falling from 35.9 million litres per day to 28.5 million litres.

Imports also decreased by 30.1 per cent, from 14.6 million litres per day to 10.2 million litres.

Despite the reductions, domestic refineries accounted for approximately 73.6 per cent of total petrol receipts during the month, while imports contributed 26.4 per cent.

The figures indicate that domestic refining remained the principal source of petrol entering the Nigerian market, but the overall quantity available declined considerably.

The situation is significant because petrol consumption rose by approximately seven per cent to 44.4 million litres per day in September, according to the regulator’s figures.

Consequently, reported daily petrol receipts fell short of reported consumption by approximately 5.7 million litres.

This difference places greater importance on existing stocks, distribution efficiency and the ability of refineries and importers to deliver additional volumes when required.

What Higher Oil Prices Mean for Nigerians.

Higher global crude prices can have competing effects on Nigeria’s economy.

On the positive side, increased prices can improve foreign exchange earnings and government revenue from crude exports, depending on production volumes, contractual arrangements and the government’s share of proceeds.

However, the domestic petroleum market can face additional pressure when crude acquisition costs rise or when supplies of refined products fail to keep pace with demand.

Under Nigeria’s market-based petrol pricing framework, international oil prices and exchange-rate movements can influence the cost of supplying petroleum products. Other factors, including refining efficiency, logistics and competition, also affect retail prices.

For households, higher petrol prices can increase transportation expenses and the cost of moving food and other essential goods.

Businesses that depend on generators, commercial vehicles and fuel-intensive equipment may also face higher operating expenses, potentially passing some of those costs on to consumers.

The effects can be particularly difficult for small businesses and low-income households, which have limited room to absorb rising transport and energy costs.

Nevertheless, an increase in international crude prices does not automatically translate into an identical increase at Nigerian filling stations. The eventual impact depends on local supply conditions and the wider pricing structure.

Nigeria’s Drive to Reduce Fuel Import Dependence.

Nigeria has made domestic refining a central part of its strategy to improve energy security and reduce reliance on imported petrol and other petroleum products.

The Dangote refinery has become a major component of that effort, while smaller modular refineries also contribute to domestic processing.

The September figures show that local refineries remained responsible for the majority of petrol receipts despite the monthly decline in supply.

However, expanding refining capacity alone may not guarantee a stable domestic market. Refineries also require consistent crude deliveries, reliable infrastructure, sufficient working capital and effective distribution arrangements.

The decline in domestic crude receipts highlights the importance of addressing the gap between Nigeria’s crude production and the quantities available to local refiners.

Ensuring that domestic refineries receive adequate feedstock could help improve operational consistency, while transparent supply arrangements could provide greater certainty for refiners and other participants in the petroleum industry.

At the same time, the availability of refined products within Nigeria will depend on how much output is delivered to the local market, how much is exported and how inventories are managed.

Energy Security and the Outlook for the Oil Market.

The combination of rising international crude prices and declining domestic crude deliveries presents a significant test for Nigeria’s energy sector.

Global geopolitical tensions remain an important factor in determining oil market movements, but domestic supply conditions will also influence the country’s ability to translate its refining capacity into dependable petroleum availability.

The next NMDPRA monthly reports will be important in establishing whether crude deliveries recover, whether petrol receipts improve and whether local refineries can sustain their operating rates without relying heavily on existing inventories.

Policymakers and industry operators will also need to monitor international price movements, exchange-rate conditions, refinery feedstock arrangements and domestic fuel demand.

For Nigeria, the longer-term objective is to build an energy market that can withstand international disruptions while ensuring reliable supplies for households and businesses.

The September figures underline the challenge: even as the country expands its refining capacity, consistent crude supply and dependable domestic distribution remain essential to achieving greater energy security.