African nations are turning to Nigeria’s Dangote Petroleum Refinery as global fuel supplies tighten following disruptions linked to tensions in the Middle East, according to reports and industry sources. South Africa has formally approached Nigeria seeking a 12-month fuel supply contract, people familiar with the discussions told Bloomberg.
The surge in demand comes as the conflict, which began on February 28, has disrupted global trade, particularly after Iran’s actions in the Strait of Hormuz. The resulting instability has led to cooking gas shortages in India and dwindling naphtha supplies in Japan, exposing vulnerabilities across the global energy market.
East and Southern Africa are particularly exposed, with approximately 75% of their refined-fuel imports originating in the Middle East. South Africa’s National Treasury recently cautioned that its ability to shield consumers from rising prices is limited, with crude oil costs surging more than 40% to exceed $100 per barrel. Ethiopia has urged its citizens to reduce fuel consumption in response to the supply constraints.
At Dangote’s 650,000 barrel-per-day refinery, roughly 75% of output is allocated to the Nigerian market, leaving the remaining 25% available for export. Ghana and Kenya have also reportedly expressed interest in securing supplies. “Right now it is not about pricing, it’s about availability,” Aliko Dangote, the refinery’s owner, told The Economist. “I think the situation will continue for a even as.”
While South Africa maintains its fuel supply is currently adequate for the coming weeks, Kenya requires oil marketers to hold at least a three-week stock. For comparison, the International Energy Agency (IEA) mandates that member countries maintain a minimum of 90 days of net oil imports, a standard no African nation currently meets.
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