• Oil prices, stocks surge as Hormuz closure drags on

Nigeria’s domestic crude market recorded a dramatic turnaround in the second quarter of 2026 as actual supplies to local refineries nearly doubled, with Dangote Refinery accounting for the overwhelming share of crude offered under the Federal Government’s domestic crude supply framework.

Data released yesterday in Abuja by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) showed that domestic refineries received 53.7 million barrels of crude oil and condensate between April and June, representing 97.4 per cent of the volumes allocated to producers under the Domestic Crude Supply Obligation (DCSO).

The performance marks a sharp improvement from the first quarter, when only 28.5 million barrels reached local refineries despite producers offering 68.7 million barrels against an allocation of 61.9 million barrels.

In the second quarters, producers collectively offered about 69.3 million barrels, broadly comparable with the 68.7 million barrels offered in first quarters. But unlike the previous quarter, when less than half of the allocated volumes eventually reached refineries, actual deliveries surged to 53.7 million barrels.

The dramatic improvement suggests that the problem confronting Nigeria’s domestic refining ambitions may not simply be the availability of crude, but the ability and willingness of refiners to conclude commercially viable transactions with producers as the figures point Dangote Petroleum Refinery the market’s principal crude buyer.

NUPRC said the 650,000-barrel-per-day Dangote Refinery required 63 million barrels during the quarter, while producers offered it 68.1 million barrels.

The volume offered to the refinery represented about 98 per cent of all crude volumes offered to domestic refiners during the period.

However, the refinery eventually accepted 52.6 million barrels, meaning that although producers offered it more crude than its stated requirement, the refinery took less than the volume it said it needed.

The figures raise a critical question about the workings of Nigeria’s DCSO given that if producers can offer more crude than required but actual purchases remain lower, what determines whether an offer becomes a completed transaction?

Under the DCSO framework, NUPRC allocates volumes to producers for supply to domestic refiners. However, transactions remain subject to the “willing buyer, willing seller” principle.

That commercial condition became particularly significant in the first quarter, when producers offered 68.7 million barrels but local refineries received only 28.5 million barrels. NUPRC had attributed the gap largely to commercial dynamics, including pricing differences between producers and domestic refiners.

The Q2 figures indicate that something changed materially in the market. NUPRC attributed the improvement partly to increased domestic crude production and the signing of long-term crude supply agreements backed by bankable sales and purchase agreements between producers and domestic refiners.

The development could represent an important shift from the earlier model, where crude was offered under regulatory allocations but transactions struggled to progress to actual delivery.

MEANWHILE, oil prices are surging as hopes dwindle that the Strait of Hormuz may reopen. The increase follows a dip last week as Tehran called on the United States to meet several demands, including ending military threats and sanctions, as well as providing compensation to reopen the strategically important waterway.

Yesterday, Brent crude futures rose more than $2 amid Iran’s push. Brent crude futures are up 3.3 per cent for the day at $84.64 per barrel. U.S. West Texas Intermediate crude futures are also on the upswing, rising 3.1 per cent to $80.63.

“Although the strait is still essentially closed, oil is currently trading at $80 to $85 per barrel, reflecting hope for a solution in near time,” SEB Research analysts said in a note to investors.

The increase follows a slight reprieve last week, with both major benchmarks falling seven per cent amid hopes that the two sides were nearing a deal that would reopen the strait.

As a result, U.S. consumers saw some relief at the pump. U.S. petrol prices fell nine cents over the last week, according to the American Automobile Association (AAA), which tracks daily petrol prices. On average, a gallon (3.78 litres) of petrol costs $4.00, down from $4.09 last week.

But that could change soon, according to the head of petroleum analysis at GasBuddy, Patrick De Haan.