Nigeria’s Bonny Light crude climbed to $70 per barrel on Tuesday, up from $68, following a drop in United States oil inventories that has tightened global supply.
The rise comes as the U.S. continues to export crude oil to Nigeria while importing refined products from the Dangote Petroleum Refinery, underscoring shifts in global energy flows.
According to the U.S. Energy Information Administration’s (EIA) September Short-Term Energy Outlook, total distillate inventories in the country are projected to close 2025 and 2026 below historical averages. The forecast has heightened concerns of volatility, pushing up prices for both Bonny Light and Brent crude, now trading at $70 and $69 per barrel, respectively.
Despite the gains, Nigeria’s crude price remains under the $75-per-barrel benchmark set in the 2025 national budget, which also assumes daily production of 2.06 million barrels and an exchange rate of N1,500 to the dollar.
The EIA report noted that while inventories have increased in recent weeks, levels remain relatively low.
“Lower distillate inventories elevate the risk of higher prices and price volatility from supply disruptions, especially during periods of high demand like the autumn harvest and winter heating season,” the agency said.
The report explained that total distillates include diesel for vehicles, heating oil, renewable diesel, and biodiesel. A significant drawdown in the first half of 2025 was identified as a key factor in tightening supplies.
“U.S. total distillate inventories decreased by 17% (about 22 million barrels) during this period, more than the average decrease of 10% (14 million barrels) over the same period in the previous four years,” the agency added.
The EIA attributed the fall in inventories partly to reduced renewable diesel and biodiesel supplies, which led to increased demand for petroleum-based distillates. Consumption of biofuels dropped by 124,000 barrels per day (35%) in the first half of 2025 compared with the same period in 2024, while petroleum distillate fuel oil consumption rose by about 170,000 barrels per day (5%).
The agency projects that biofuels consumption will recover in the second half of 2025 to meet mandates under the U.S. Renewable Fuel Standard.
