Reuters: Nigeria Allocates More Crude Cargoes to Dangote Refinery for May

• OPEC oil output plunges in March as war forces export cuts 

•Brent posts record monthly gain, WTI since 2020

Emmanuel Addeh in Abuja

The Nigerian National Petroleum Company Limited (NNPC) is allocating seven crude cargoes for May loading to Nigeria’s Dangote refinery, up from the five it received in previous months, two trade sources have told Reuters.

Fuel prices in Nigeria have reached record highs and Dangote has previously said the company could source only about five crude cargoes a month locally, far short of the 13–15 it requires, forcing it to import the rest at prices dictated by the impact of war in the Middle East.

An increase in crude allocations to the 650,000 barrel per day refinery, Africa’s largest, could also curb volumes of Nigerian crude available for export at a time when the Iran war has drastically cut supply from the Middle East, forcing buyers to hunt far and wide for available cargoes.

NNPC and the refinery did not respond immediately to requests for comment, the Reuters report said.

Dangote has raised petrol supplies to Nigeria’s domestic market this month, meeting the needs of a little more than two thirds of Nigeria’s daily requirements of 60 million litres. It has also had to increase petrol depot prices by about 13 per cent, the Reuters report said.

Besides, the Organisation of Petroleum Exporting Countries (OPEC) oil output plunged in March to its lowest level since the height of the COVID-19 pandemic in June 2020, a Reuters survey found, as the U.S.-Israeli war against Iran effectively closed the Strait of Hormuz and forced export cuts.

Crude output by OPEC members in March fell by 7.3 million barrels per day month-on-month to 21.57 million bpd, the survey showed, led by cuts in Kuwait, Iraq, Saudi Arabia and the United Arab Emirates.

Only two OPEC nations – Venezuela and Nigeria – raised output during the month, the survey found, the report stressed.

The Reuters survey is based on flow data from financial group LSEG, information from other companies that track flows, such as Kpler, and information provided by sources at oil companies, OPEC and consultants.

Meanwhile, Brent oil futures were closing out their largest monthly gain in history with another lurch higher on Tuesday after a fresh tanker attack in the Middle East and a warning from the U.S. Defense Secretary that the U.S. would step up attacks if Iran does not make a deal.

Brent crude futures for May were up $5.31, or 4.71 per cent, at $118.09 per barrel at 1326 GMT. Front-month Brent futures were on track for an all-time monthly gain of 63 per cent, according to LSEG data stretching to June 1988. U.S. benchmark West Texas Intermediate has gained 54 per cent, the biggest jump since May 2020.

Besides, June Brent by contrast was little changed, gaining just 7 cents to $107.46 per barrel.

U.S. WTI futures for May were up 49 cents, or 0.48%, at $103.37 at 1326 GMT, the report said.

The international benchmark has steadily risen over the last four weeks as the Iran war has escalated, with attacks across energy infrastructure throughout the Gulf that has resulted in the worst-ever oil-and-gas supply disruption in history.

The market has vacillated throughout the month, with a series of dips each time the U.S. President Donald Trump suggested the military operation may de-escalate – only to resume its upward path due to the supply impairment caused by Iran’s threats against vessels transiting the key Strait of Hormuz, the artery used to ship one-fifth of the world’s oil and gas.