As Gulf Crude Recovers, Africa's Oil Crisis Moves Across Its Own Borders
EBC Financial Group highlights that refined fuel is moving from Africa's lower-priced markets to higher-priced neighbours, which may leave the countries the region relies on, starting with Nigeria, short of supply.
EBC Financial Group (EBC) notes that Africa's oil crisis has shifted from a shortage of Gulf crude to a competition for refined fuel between African markets. Middle East crude exports, excluding Iran, returned to pre-war levels in September, yet refined-product exports are only about 58% of their pre-war volume and Brent still trades near US$100 a barrel. With finished fuel scarce, petrol and diesel tend to move towards whichever neighbouring market pays more, through formal exports, and according to Nigeria's Aliko Dangote, smuggling. This pull can draw supply out of the region's lower-priced markets, most visibly Nigeria, home of the Dangote refinery, and may leave them short of fuel. Similar pressures are visible along the import corridors serving landlocked markets such as Ethiopia and Zambia, while steadier currencies point to fuel availability, rather than exchange rates, as the main source of strain.
"The common view is that more refining capacity in Africa means more protection from shocks such as Hormuz," said David Precious, Senior Market Analyst at EBC Financial Group. "However, when fuel, the raw material itself, is scarce, a market that sells below its neighbours' prices becomes their supplier too, as supply suddenly crosses boundaries. This is when shortages can appear at home."
Gulf Crude has Recovered Faster than Refined Fuel
The Hormuz crisis is easing for crude, seven months after the strait closed on 28 February, in what the International Energy Agency (IEA) called "the largest disruption in history”. However, the global refinery runs in August were still 4.2 million barrels a day below a year earlier, according to the IEA. Africa feels this more than most because it imports refined fuel rather than crude. The African Export-Import Bank (Afreximbank), estimated in 2025 that these imports cost the continent about US$30 billion a year. Hence, the pressure on African supply has moved from crude to the refined fuel that passes through the continent's ports and across its borders.
Nigeria's Refining Advantage is Drawing in its Neighbours
Based on its refining capacity, Nigeria should be the region's best-protected fuel market. The Dangote refinery ran at 105.21% of capacity in August and crude deliveries to Nigerian refineries rose 16.75% to 683,000 barrels a day, according to Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) figures. The refinery has exported fuel this year to Côte d'Ivoire, Cameroon, Tanzania, Ghana, and Togo.
The same advantage makes Nigeria a source of fuel for its neighbours. Aliko Dangote, President of the Dangote Group, said on 15 September that petrol sells for 30% to 50% more in some neighbouring countries. He pointed out that fuel meant for Nigerian markets is being diverted across borders, and that the Middle East crisis is "not even about price; it's about availability".
If more fuel leaves than refining and imports can replace, Nigerian buyers may face shortages or higher prices even with refineries running at full capacity. Nigerian National Petroleum Company (NNPC) raised the refinery's crude allocation to seven cargoes in May from about five, against the 13 to 15 a month the refinery says it needs. The refinery fills the shortfall by buying it at international prices. Hence, Nigeria's fuel security rests on crude allocation, export volumes, and the price gap with its neighbours as much as on refining capacity.
Shortages Travel along the Region's Trade Routes
Nigerian fuel has reached buyers as far away as Tanzania this year, which shows how far the pull on one refinery now extends. At the other end of Africa's supply chains, landlocked importers receive fuel last. Ethiopia, which brings most of its fuel through the Djibouti corridor, ordered fuel conservation measures in March. Zambia declared its fuel supply situation an emergency in April as diesel scarcity began impacting the market. While both have since eased, it shows how quickly inland markets feel a shock at the coast.
Currencies are not the Main Driver This Time
South Africa’s October fuel price breakdown shows the rand moving prices by R3.12 to R3.33 a litre and diesel by R2.84 to R3.24 from 7 October. The Department of Mineral and Petroleum Resources' breakdown shows the rand moving prices by less than one cent a litre, while international product prices, which the government attributed to "supply shortages caused by lower global inventories of products", added R3.29 a litre to petrol. Therefore, a weaker currency or a wider gap with a neighbour's prices may add to supply pressure even if crude prices stay where they are.
Kenya's 14 October Review and Nigeria's Supply Data Are the Next Signals
Several dated signals can show whether the pressure is easing Kenya's next pump-price review and the scheduled end of its reduced VAT rate on petrol and diesel, both on 14 October, the IEA's next Oil Market Report on the same day, and Nigeria's monthly NMDPRA supply data, which shows how much fuel domestic refineries deliver to the local market. Between those dates, changes in pump prices on either side of Africa's busiest borders may show whether the pull on lower-priced markets is easing or building.
"In a shortage, the cheapest fuel in a neighbourhood is the fuel most likely to leave it," Precious added. "When a litre sells about 25% more in Togo than in Nigeria and more than 50% more in Ghana, that gap is a standing incentive to move fuel across the border, whatever a refinery produces. The pull may only ease when Gulf refined-product exports recover, the gaps between neighbouring pump prices narrow, or local refiners receive more of their own country's crude, and until then the markets that look best protected may be the ones most likely to run short."
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