India has stepped up purchases of Nigerian crude oil in a move that coincides with the Dangote Refinery’s growing appetite for imports from the United States, signalling a notable shift in global oil trade flows that could influence prices and investor sentiment in the months ahead.
Industry data seen by ireport247news.com shows that New Delhi’s refiners, keen to diversify supply and secure competitive pricing, have increased their intake of Nigerian grades such as Qua Iboe and Bonny Light. This comes as Nigeria seeks to rebuild its crude export volumes after months of output volatility linked to pipeline vandalism, theft, and operational delays.
Meanwhile, the $20bn Dangote Refinery, still ramping up production capacity, has been importing substantial volumes of US light sweet crude — primarily West Texas Intermediate (WTI) — to meet its feedstock requirements. This strategy is aimed at stabilising operations, ensuring consistent yields, and taking advantage of favourable freight rates from the Gulf of Mexico.
Analysts say the development underscores a quiet reshuffling of supply chains. While India traditionally sources much of its oil from the Middle East and Russia, Nigerian barrels are becoming more attractive due to competitive discounts and shorter shipping times compared to Russian Far East cargoes.
“India’s increased Nigerian purchases provide a floor for West African crude prices,” said Adewale Osho, an independent energy consultant. “For investors, it suggests a stabilisation in Nigeria’s export earnings in Q4 2025, but the longer-term impact will depend on OPEC+ policy and local production reliability.”
On the flip side, Dangote’s reliance on US crude imports could temporarily tighten availability of certain grades in the Atlantic Basin, potentially lifting spot prices. WTI prices, which hovered around $77 per barrel last week, could see upward pressure if demand from non-US refiners accelerates.
For energy market investors, the shift presents both opportunity and caution:
Equity Markets: Nigerian upstream producers listed in Lagos and London could benefit from improved offtake stability, boosting earnings forecasts.
Forex Dynamics: Higher crude exports to India may strengthen Nigeria’s forex inflows, potentially easing naira volatility in the near term.
Oil Futures: Traders may see increased arbitrage plays between WTI and Brent benchmarks as refiners like Dangote mix sourcing strategies.
Global oil price trends will also hinge on whether OPEC+ maintains current production quotas into early 2026. If Nigerian output rises while US exports remain strong, the Brent–WTI spread could narrow, impacting hedging strategies for large consumers.
Experts note that India’s deepening engagement with Nigerian crude suppliers could translate into broader bilateral cooperation, from upstream investments to refining partnerships. For Nigeria, diversifying its customer base beyond Europe and traditional Asian markets could prove vital as global decarbonisation policies gradually reshape demand patterns.
“This is more than just cargo swaps,” said Sarah Ajayi, head of commodities research at Global Energy Partners. “It’s about positioning — Nigeria wants a bigger share of India’s energy security portfolio, while Dangote wants feedstock flexibility to maximise margins. Both strategies have ripple effects for regional price stability.”
Brent crude has traded between $78 and $84 per barrel over the past month, with markets closely watching Chinese demand data and US inventory levels. A sustained rise in Nigerian exports to India could absorb excess supply in the Atlantic Basin, supporting Brent near the upper end of this range.
However, geopolitical risks — including tensions in the Middle East and potential disruptions in the Niger Delta — remain key wildcards. Any major outage could spark price spikes, especially if Indian refiners have to scramble for alternative supplies.
The dual development of India buying more Nigerian crude and Dangote importing from the US signals a new phase in global oil flows. For investors, it means watching freight spreads, OPEC+ signals, and the delicate balance between Brent and WTI pricing. For Nigeria, it offers a chance to stabilise export revenues — if production stays steady.