Navigating Nigeria’s Oil Trade

After countless setbacks, unexpected challenges and a pandemic to deal with, just last month, Reuters reported that the 650kbd Dangote refinery had reached 85% of its operational capacity and could achieve 100% within 30 days, citing company sources. The resumption of operations at the revamped 60kbd Port Harcourt refinery and the 125kbd Warri refinery was also reported by NNPC in late 2024. Undoubtedly, the addition of new capacity and the restart of old plants represent significant achievements for Nigeria, inevitably leading to structural shifts in the country’s product imports and crude exports. However, while changes in trade flows have been observed, they have so far been somewhat limited, considering the reported refining capabilities.

Various sources estimate Dangote’s maximum gasoline output to be between 300 and 365kbd. Additionally, the plant can produce around 250kbd of diesel and 50kbd of jet fuel, with some flexibility to adjust yields. The refining capabilities of the Port Harcourt and Warri refineries have not been publicly disclosed, but NNPC has reported truck loadings of key refined products – gasoline, diesel, and jet fuel.

According to Kpler, so far this year Nigeria on average has imported around 205kbd of CPP, with gasoline imports averaging approximately 135kbd, reaching their lowest level since records began in February but rebounding in early March. Overall, gasoline imports have declined by about 185kbd from 2023 levels. The country also continues to import small quantities of diesel, albeit in lower volumes than in 2023. Similarly, there has yet to be a notable decline in Nigeria’s crude exports. Shipments this year have averaged around 1.3mbd, just 200kbd below 2023 levels, despite Dangote increasing its seaborne intake of local crude to around 400kbd since December. Here, the limited reduction in crude exports can be partially attributed to rising crude production.

At first glance, trade data suggests that the combined operating rates at Dangote and the revamped NNPC refineries remain below reported capacity, though this may be at least partially explained by ongoing challenges. Media reports indicate that Dangote has struggled to secure sufficient domestic crude supplies, occasionally sourcing U.S. and, more recently, Angolan barrels. A brief shutdown of its gasoline-producing Residue Fluid Catalytic Cracker (RFCC) has also been reported earlier in the year. Meanwhile, NNPC reported maintenance at the Warri refinery in February.

With this in mind, further declines in clean imports and crude exports appear inevitable. So far, the reduction in Nigerian clean product imports has been primarily limited to shipments from Europe, which have fallen by around 155kbd this year compared to 2023. Interestingly, the MR share of the trade has remained largely steady, but shipments on LR1s have dropped from 115kbd in 2023 to almost nothing this year. LR2 trade has also declined, though not as drastically. Any further reduction in European gasoline shipments to Nigeria is bound to impact MR rates. With February CPP flows into Nigeria being particularly low, the structural hit to MR demand could be imminent.

Nigeria’s Clean Products Imports (kbd)

Crude Oil

East

The VLCC segment in the AG is ending the weak with a softer sentiment after a slight upturn earlier in previous days. Activity levels started strong from Monday as charterers moved to cover outstanding second decade stems and 3rd decade programme after the IE week activities.  Owners have shown resistance in most cases but with weakness in other regions there is little hope that recovery could start soon so expect rates to sit at these levels for the near future. Today we are calling AG/China WS56.5 and AG/USG WS31.

The AG Suezmaxes remain quiet with the list beginning to grow, there is resistance at last-done levels of 140 x WS56.5 via C/C for modern approved tonnage. Below that it seems owners are likely to take their chances ballasting to WAF. For East runs, charterers will be looking to push rates towards and possibly below 130 x WS100 next week.

The Indo region saw a northbound market quote receive two offers for an Aframax stem but got covered at current levels, reflecting the pace for the week. However, fresh demand for the final decade emerged and with a clean up of the front end of the list, together with outstanding cargoes, we expect rates to be steady and could firm moving into next week. The TD14 prints higher at WS115 showing the trend of the market.

West Africa

The volume of cargo in the VLCC market in WAF improved after a quiet few weeks and owners were hopeful of better freight rates especially as the volume of East ballasters diminished. However, this upturn failed to materialise as weak sentiment and negative factors in other parts of the Atlantic meant rates ending the weak slightly softer than they started with. Most of the activity recorded have been East runs and this should continue into next week as April volumes look positive. Today we are calling WAF/East in the region of WS57.5.

Suezmax markets in West Africa have a slightly firmer feel but there are still a few prompt ships that need to be cleared out to get things moving. For TD20, owners will be looking to push above last-done 130 x WS87.5 and it seems likely as the week progresses, they could get their way. For now, we feel there’s a good chance of repeating this rate though.

Mediterranean

Open market enquiry for Suezmaxes in the Med is rather quiet but there are a few ships on subs off slightly uncertain positions, so some are trying to cover ahead. TD6 today owners will be looking to push rates back over WS100, and with wait times on the current dates working it seems likely. Libya/Ningbo today is steady, and owners will likely be looking to fix around the $5.4M level.

Aframaxes started on a stronger note, with rates looking firm in the early part of the week. However, as itineraries became more certain and fixing dates moved forward, the market took a different turn. With limited activity, charterers took the opportunity to push rates back down, securing WS122.5 for a standard Ceyhan voyage. More tellingly, even routes with lower flat rates settled at similar levels, highlighting broader market weakness. Looking ahead, while increased activity from Libya towards the end of the month may offer some relief for owners, the overall outlook remains challenging. Also, without support from other key regions—such as the US, CPC, or Ceyhan—the Aframax market could face continued pressure in the short term.

US Gulf/Latin America

VLCC freight rates from USG suffered a huge hit this week as charterers took full advantage of the weak sentiment caused by lack of enquiry and uncertainty due to geopolitical factors. It’s not easy to argue for a recovery soon unless we see improvement in adjacent regions. Brazil export had a busier week, but rates also began to soften as tonnage struggled to find suitable employment in other parts of the Atlantic.  Today we are calling USG/China $7.3m & Brazil/China WS55.

Aframax market had a quieter week than expected with limited enquiries reported for second decade of March. USG to UKC freight dropped almost 20 points from week open at WS160 to WS140. More positions are expected to appear after the weekend and freight sentiment is soft.

North Sea

The North European Aframax market remained sluggish throughout the week, with an initial lack of momentum setting a subdued tone. Despite this, and given ample time for tonnage lists to replenish, owners managed to maintain some resistance. As a result, rates held steady at WS110, demonstrating that even in a quiet market, there was little willingness to concede further ground. As we look forward though charterers will be more willing to test this as the list looks more healthily stocked.

Crude Tanker Spot Rates (WS)

Clean Products

East

LR2s flat in the East come the end of the week, TC1 holding steady at 75 x WS130 and given the $3.25m on subs for a westbound it is likely we see further westbound enquiry coming next week. Expect to see more activity on the LR1s given this week has been quiet. TC5 needs a retest but the front end is tight for true nap suitable ships and as such assess 55 x WS137.5-140 levels. West also due a retest but for now AG/West at the $2.7m levels.

A slow start for MRs but overall, a steady week in the AG where cargo flow has just about kept the top of the list ticking over. With some swapping around and not all deals getting lifted, opportunity to test sentiment saw TC17 down to WS210 and repeated as we close the week with WS150 for TC12 and westbound numbers due a retest.

UK Continent

A real rollercoaster of emotions has been seen this week for the UKC MR sector as much speculation over tariffs kept many guessing where this market was going. XUKC has been a popular run with owners waiting for clarity but the few TA runs we have had we saw mixed success, ranging from WS135-150. South American runs have been more active than before which has been a bit of a saviour as WAF remained slow for the MRs. Come Friday after several quiet deals the top of our lists have cleared out well and with 37 x WS140 last done TC2 and a few more stems still to cover owners will be ending the week a little more positive. Ballast tonnage could well cause us issues in the coming week but with the Mediterranean trading higher, it seems many AIS destinations for the moment are Gibraltar rather than ARA. 

A week to forget for Handy owners plying their trade in NWE. The combination of sluggish enquiry and pressure from the MRs has resulted in XUKC softening to 30 x WS175 by the end of the week. The short-term outlook looks rather bleak with owners hopeful that the bottom of the market has been reached. Another dip on freight could be in the cards here.

Med 

It’s been a busy week for the Handies down in the Mediterranean which has seen rates firm throughout. We started the week with XMed trading at the 30 x WS145 mark which was heavily repeated across Monday/Tuesday but with the cargoes keeping on coming the list tightened. Since then, we have seen rates push up with every fixture and now see last done at the equivalent of 30 x WS185. At the time of writing a bit of a stand-off has formed with a handful of cargoes left to cover but with owners bullish and pushing for 30 x WS200 levels no one is willing to take the plunge just yet. 

All in all, it’s been a lacklustre week for the Med MR market which after a promising start has now come under pressure. 37 x WS195 was achieved for a prompt Sines/TA stem on Monday with the list tight for those dates but since then we have seen TC2 fall to 37 x WS135 and with the USG also poor, ballasters have started to head our way. Med/TA needs a fresh test off the back of this with levels expected to correct to the 37 x WS150 mark.

Clean Tanker Spot Rates (WS)

Dirty Products

Handy

It has been another week of steady increment in the North. Healthy amounts of consistent enquiry continued to chip away at the list. Well approved units remained scarce as sentiment continued to firm. Expect owners to gain further ground next week.

This week, the Med started positively, with levels fixing at 30 x WS225, but a drop in activity saw a quieter end, resulting in the charterer’s confidence growing. Charterers will feel they are able to test owners and will be hopeful to fix at WS210-215.

MR

MR vessels in the North have experienced limited activity. Although less MR tonnage is available, the lack of demand keeps a ceiling on owners’ expectations. Surrounding regions should be well monitored for potential coverage.

Tonnage availability in the Med proved scarce throughout this week. Mid WS150 levels were achieved but heading into next week charterers may have to fix ahead of the natural window. Current tracking shows majority of natural sized units opening in the east Med.

Panamax

The availability of workable tonnage on this side of the pond is very thin, leaving charterers with few options but to seek alternatively sized vessels for the time being. Over in the USG, under-the-radar activity clips units away off-market, but levels here stay flat. For sentiment to improve here, owners will need local Aframax markets to improve and hope enquiry trickles down in size.

Dirty Product Tanker Spot Rates (WS)

Rates & Bunkers

Clean and Dirty Tanker Spot Market Developments – Spot WS and $/day TCE (a)

wk on wk changeMar 6thFeb 27thLast Month*FFA Q4
TD3C VLCC AG-China WS-157585959
TD3C VLCC AG-China TCE $/day039,25039,25038,25036,000
TD20 Suezmax WAF-UKC WS388858985
TD20 Suezmax WAF-UKC TCE $/day3,25033,75030,50032,00028,500
TD25 Aframax USG-UKC WS-13144157129135
TD25 Aframax USG-UKC TCE $/day-3,75034,00037,75026,25026,000
TC1 LR2 AG-Japan WS9130121126 
TC1 LR2 AG-Japan TCE $/day4,00030,00026,00026,000
TC18 MR USG-Brazil WS-6138144146168
TC18 MR USG-Brazil TCE $/day-1,25013,00014,25014,50016,500
TC5 LR1 AG-Japan WS-5135140130137
TC5 LR1 AG-Japan TCE $/day-75020,50021,25017,25018,750
TC7 MR Singapore-EC Aus WS13199186175179
TC7 MR Singapore-EC Aus TCE $/day2,75022,75020,00017,00018,250

(a) based on round voyage economics at ‘market’ speed, eco, non-scrubber basis

Bunker Prices ($/tonne)

wk on wk changeMar 6thFeb 27thLast Month*
Rotterdam VLSFO  -29491520543
Fujairah VLSFO  -30500530560
Singapore VLSFO  -27500527568
Rotterdam LSMGO  -23623646659

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