Nigerian crude prices closed the day largely unchanged on Friday as global oil markets weighed the possibility of a breakthrough deal between the United States and Russia to end the war in Ukraine—a move that could reshape Russian crude flows if it wins broad international backing.
Bonny Light crude edged higher to $68.85 per barrel, narrowly breaking a six-session losing streak, amid cautious investor sentiment.
The muted market reaction came as Washington and Moscow explored an agreement that would see Russia retain control of territories seized during its invasion. U.S. negotiators are seeking endorsement from Ukraine and European allies, though support for such a deal remains highly uncertain given its potential to be perceived as a significant concession to Moscow.
Adding to tensions, U.S. President Donald Trump recently doubled tariffs on all Indian imports to 50% over New Delhi’s purchase of Russian crude and warned China could face similar penalties.
The United States and the European Union have both imposed measures aimed at cutting Russia’s oil revenues since the invasion, but investors remain doubtful Europe would support an arrangement widely seen as a diplomatic victory for the Kremlin.
Despite geopolitical uncertainty, the oil industry continues to demonstrate adaptability in the face of supply disruptions—whether caused by tariffs, sanctions, or conflict. This week, Russian Urals cargoes from the country’s west were sold to Chinese buyers who typically avoid the grade, underscoring the market’s flexibility.
Russian President Vladimir Putin has maintained his demand that Ukraine cede Crimea and the eastern Donbas region, while Ukrainian President Volodymyr Zelenskiy would be required to order troop withdrawals from remaining Kyiv-held areas of Luhansk and Donetsk.
Globally, crude markets have softened after a summer rally. Following three months of gains, prices fell over 7% in August, reflecting investor concern over a possible surplus later in the year as OPEC+ relaxes its production curbs.
In Nigeria, crude oil output reached its highest level in more than five years, holding steady at 1.8 million barrels per day in July. This milestone comes amid improved security in onshore operations, reduced pipeline disruptions, and the increasing role of indigenous operators as international oil majors scale back local exposure.
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Notably, enhanced flows to the Ugo Ocha terminal have pushed exports to 65,000 barrels per day, aided by alternative logistics solutions such as barging—pioneered by operators like Neconde—to supplement pipeline transport.
Industry analysts credit the Petroleum Industry Act (PIA) of 2021 for much of this recovery. Enacted after decades of delay, the landmark legislation restructured Nigeria’s oil and gas regulatory framework, establishing the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
Meanwhile, the Dangote Petroleum Refinery recorded its highest monthly crude intake in July, importing 590,000 barrels per day. However, only 40% of that volume—about 220,000 barrels per day—came from Nigerian grades such as Amenam, Bonny Light, and Escravos.
The bulk, 370,000 barrels per day, originated from foreign sources, with U.S. West Texas Intermediate (WTI) proving particularly competitive due to lower pricing and reduced appeal of certain OPEC+ grades in Asian markets.
Despite an agreement with the Nigerian National Petroleum Company Limited (NNPC) to source domestic crude in naira since October 2024, the refinery has consistently received less than the contracted volumes—highlighting the challenges of securing adequate local supply for the country’s largest downstream project.