Nigeria may face a lubricant supply squeeze in the coming months as tightening global base oil supplies and rising prices limit imports into West Africa, according to a report by global energy and commodity intelligence firm Argus.
The report, based on insights from Argus’ Head of Base Oil Pricing, Gabriella Twinning, said lower availability of base oils and rising global prices linked to disruptions caused by the US-Iran conflict are reducing offers into the West African market despite the announcement of a peace deal.
It noted that West Africa remains heavily dependent on imported base oils, with average annual imports standing at about 135,752 tonnes over the past five years. According to the report, the Dangote refinery expansion includes a base oil production unit, but the facility has yet to commence operations, leaving the region dependent on imports.
“Lower availability of base oils and rising global prices due to the continued disruption associated with the US-Iran war are curbing offers into the West African market despite a peace deal announcement,” Twinning stated.
On the region’s dependence on imports, Twinning said West Africa is a net importer of base oils, with average imports of around 135,752 tonnes annually over the past five years.
