Concerns over a potential global oil glut are mounting as Nigeria moves to reprice its crude, with the Organisation of the Petroleum Exporting Countries (OPEC) facing a fresh test of cohesion following the exit of the United Arab Emirates (UAE). Meanwhile, the downstream petroleum market is facing renewed pricing pressure after Dangote Petroleum Refinery reviewed its ex-depot petrol price upward to N1,275 per litre from N1,200 per litre, heightening fears of further increases in retail pump prices across the country.
Crude Price Adjustments
Data obtained from the Nigerian National Petroleum Company Limited (NNPCL) showed that Nigerian crude would see an average increase of $6.15 per barrel for May delivery across all 37 crude oil grades. Official Selling Prices (OSPs) show higher premiums over Dated Brent, with Bonny Light rising to $6.86 per barrel and Forcados to $8.49 per barrel. Antan Blend recorded one of the sharpest hikes, now priced at $9.33 per barrel premium. This pricing adjustment signals Nigeria's attempt to capture stronger margins amid tightening prompt supplies and improved demand for light, sweet crudes.
Global Market Risks
However, there are fears that the strategy may collide with emerging downside risks in the global market. Those risks are being amplified by structural shifts within OPEC itself, which came days after the UAE's decision to leave the cartel from May 2026. Wood Mackenzie described the situation as the most significant rupture in OPEC's history, noting that it heightened fears of a looser supply regime in the medium term. While the immediate supply impact is muted due to geopolitical constraints, including disruptions around the Strait of Hormuz, the longer-term implications are more profound.
Nigeria's Balancing Act
For Nigeria, this creates a delicate balancing act. Higher OSPs reflect confidence in the competitiveness of its crude grades, particularly in European and Asian markets seeking alternatives to heavier or sanctioned barrels. However, elevated premiums risk pricing Nigerian cargoes out of the market if global supply expands and benchmark prices weaken. Wood Mackenzie's experts noted the widening gap between the UAE's production capacity and OPEC+ quota allocations as a central factor. The UAE committed $145 billion to its domestic upstream oil sector over the decade to 2030, aiming to expand capacity from under four million barrels per day in 2020 to five million barrels per day by 2027. By 2024, capacity had reached 4.85 million barrels per day.
Dangote Refinery Price Hike
Dangote refinery also adjusted its coastal price to N1,215 per litre, a move that industry operators say reflects rising global crude oil costs and tightening supply dynamics in the international market. The development, confirmed by the industry price-tracking platform Petroleumprice.ng, coincides with a temporary suspension of sales operations following a reported halt in Proforma Invoice (PFI) issuance, a key administrative process that coordinates product lifting and distribution. The suspension occurred on Monday at about 4:00 p.m., disrupting loading schedules and temporarily affecting the flow of Premium Motor Spirit (PMS) and Automotive Gas Oil (AGO) within the supply chain.
Market Reactions
Industry operators say the disruption has already begun to create uncertainty across depots, with marketers recalculating landing costs and bracing for immediate retail pricing adjustments. At the time of filing this report, Brent crude traded at $119.3 per barrel, while West Texas Intermediate (WTI) stood at $107.2 per barrel, driven by heightened geopolitical tensions in key oil-producing regions. The spike in global crude prices has significantly raised feedstock and replacement costs for refiners, feeding into the latest domestic price adjustments.
Stakeholder Comments
Speaking on the development, the President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Ibrahim Maigandu, said the price hike was influenced by global market conditions rather than domestic policy shifts. Also, the National President of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), Dr Billy Gillis-Harry, said the latest increase reflects long-standing structural pressures in the global oil market. He added that the situation was consistent with earlier warnings from industry stakeholders. Looking ahead, PETROAN warned that sustained global tensions could push pump prices beyond current expectations. “We won’t be surprised if the price hikes beyond the 1,500 limit,” he said.
