Nigeria could experience a shortage of lubricants in the coming months as tightening global supplies of base oil and rising international prices continue to restrict imports into West Africa, a new report by global energy and commodity intelligence firm Argus has revealed.
The report, which draws on insights from Argus’ Head of Base Oil Pricing, Gabriella Twinning, said ongoing disruptions in the global base oil market, triggered by tensions linked to the United States-Iran conflict, have reduced the volume of supplies available to West African buyers despite the announcement of a peace agreement.
According to the report, West Africa remains heavily dependent on imported base oils, with average annual imports estimated at about 135,752 tonnes over the past five years. Although the Dangote Refinery expansion includes a base oil production unit expected to boost regional supply, the facility is yet to begin operations, leaving Nigeria and neighbouring countries reliant on imports.
Twinning explained that shrinking availability of base oils and escalating prices have discouraged exporters from offering cargoes to the West African market.
She disclosed that the last major shipments into the region arrived in March, warning that fresh cargoes are unlikely to be sourced from exporting countries during the summer months.
The report attributed the supply shortage to several factors, including maintenance work at major refineries in Europe and the United States. It noted that European Group I base oil supplies, commonly used in the production of engine oils, marine lubricants, industrial oils and greases, remain scarce following a five-week maintenance shutdown at Poland’s PK Orlen refinery, which only resumed operations at the end of May.
Similarly, supplies from the United States have been constrained as refiners prioritise domestic demand while building inventories ahead of the Atlantic hurricane season. Crude feedstock changeovers at some Group I refineries have also affected production levels.
To cushion the impact, the report suggested Nigerian buyers could switch to Group II heavy base oils where product formulations permit, as these grades are currently more available outside Asia. However, it noted that Asian suppliers are prioritising more lucrative demand from lubricant blenders in South America.
The report also highlighted declining exports from Russia as several refineries undergo maintenance, further tightening global supply.
In addition, record-high spot prices recorded in June have made imports increasingly unattractive for West African buyers, especially given the region’s complex payment processes.
Twinning warned that lubricant manufacturers across West Africa may have little choice but to increase ex-tank prices and offer more competitive bids to secure limited supplies in the international market.
She added that demand for lubricants has continued to grow despite the rainy season, a period that typically slows transportation and logistics activities, largely because no replacement cargoes have reached the region since March and inventories are steadily being depleted.