KEY POINTS
- Bonny Light closed at $68.85, breaking a six-day losing streak amid U.S.-Russia peace talk speculation.
- Nigeria’s oil production hit 1.8 mbpd in July, the highest in over five years, driven by local operator gains and regulatory reforms.
- Dangote refinery imported record crude volumes in July, but relied mostly on foreign grades despite domestic output growth.
Nigeria’s flagship Bonny Light crude ended Friday just shy of $69 a barrel, barely snapping a six-day losing streak, as global markets weighed the possibility of a U.S.-brokered deal with Russia that could reshape energy flows.
The proposed agreement, still in the realm of diplomatic shadowboxing, would see Moscow keep the territories it seized in Ukraine in exchange for a wider easing of hostilities. Washington is quietly testing the idea with Kyiv and key European allies, but support is far from assured. Any deal seen as a win for President Vladimir Putin could face stiff resistance in Europe.
The geopolitical backdrop has left oil traders restless. President Donald Trump has already doubled tariffs on all Indian imports to 50% in retaliation for New Delhi’s Russian crude purchases, while threatening similar penalties on China. The U.S. and European Union have spent the better part of three years trying to choke off Russia’s oil revenues—efforts that could be undercut by a poorly received truce.
Local Crude Output Hits Five-Year High
Despite the turbulence, Nigeria’s oil industry is quietly hitting milestones. July’s crude production averaged 1.8 million barrels per day, the highest in more than five years, thanks to steadier onshore operations, fewer pipeline disruptions, and a new logistical ingenuity from local producers. Companies such as Neconde are increasingly using barges to supplement pipeline shipments, helping boost flows to export hubs like the Ugo Ocha terminal.
That output surge comes amid structural changes brought on by the 2021 Petroleum Industry Act, which overhauled the country’s decades-old regulatory framework.
The law created two new watchdogs—the Nigerian Midstream and Downstream Petroleum Regulatory Authority and the Nigerian Upstream Petroleum Regulatory Commission—streamlining oversight and giving local operators more room to maneuver as international majors pull back.
Meanwhile, the Dangote refinery continues to import record amounts of crude—590,000 barrels per day in July—yet just 40% of that came from Nigerian fields. The balance was sourced from abroad, with cheaper U.S. barrels and excess OPEC+ supply proving attractive to the massive plant. Even with a deal allowing the refinery to pay in naira for domestic crude, deliveries have consistently fallen short of commitments, underscoring the structural challenges in linking Nigeria’s production boom to its refining ambitions.
For oil markets, the next few weeks could be pivotal. A breakthrough—or breakdown—in U.S.-Russia talks could whipsaw prices, while Nigeria’s own supply momentum will be tested against global headwinds and the realities of domestic crude allocation.
