By Oke Peter

The global energy landscape took another turn this week as tightening supply pushed oil prices sharply higher. For Nigeria and the rest of Africa, however, the picture is more complicated. Rising crude prices could provide a much-needed boost for oil-producing economies, but they also highlight the structural weaknesses of countries that remain heavily exposed to imported refined petroleum products, unreliable electricity and dependence on foreign investment.


Nigeria: Refining and upstream investment dominate the conversation

Nigeria’s downstream oil industry produced one of the week’s most significant developments, with the Dangote Petroleum Refinery securing at least 16 million barrels of crude for delivery in October. That volume translates to approximately 520,000 barrels per day, representing a substantial portion of the refinery’s 700,000-bpd capacity.


The refinery’s crude intake has been rising steadily. Deliveries in August were estimated at about 565,000 bpd, nearly twice the facility’s average intake during the previous year.


The increase comes as Dangote prepares for what could become one of Africa’s largest initial public offerings. The refinery is reportedly targeting about ₦2.15 trillion ($1.63 billion) through the proposed listing, while plans for a broader $14.3 billion expansion could eventually take refining capacity to 1.4 million bpd by 2029.

Also, the refinery recorded an after-tax profit of $1.82 billion in the first half of 2026, compared with a loss of $476 million reported for the whole of 2025.


An expansion of domestic refining capacity could significantly reduce Nigeria’s dependence on imported petroleum products while generating opportunities throughout the energy value chain, including crude production, shipping, storage, transportation and petrochemicals.


There is, however, a trade-off. As the Dangote refinery increases its purchases of Nigerian crude, the volume of crude available for export could decline.


Upstream ambitions face a production challenge

The Federal Government is also seeking to use the current oil-price environment to stimulate long-term upstream investment. The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has indicated that the next licensing round could commence as early as October. The process is expected to include 13 blocks that remained unawarded from the previous round, covering deepwater, shallow-water and potentially frontier acreage.


Investor confidence will also be tested by the progress of the long-delayed Bonga South-West Aparo project. The deepwater development could attract between $15 billion and $21 billion in investment over its lifetime, with anticipated peak production of approximately 175,000 barrels of oil per day alongside 140 million standard cubic feet of gas per day.


Despite these investment prospects, Nigeria’s current production levels remain a major concern. OPEC data reported locally put the country’s average crude output in August at around 1.50 million bpd. That remains a long way from the Federal Government’s target of raising production to 3 million bpd by 2030.


Power remains Nigeria’s headache

Electricity continues to represent the weakest link in Nigeria’s energy system. Although the country has significant installed generation capacity, actual available power remains well below demand.

Insufficient gas supply, inadequate infrastructure and persistent liquidity problems across the electricity market continue to limit generation and distribution. Regulatory action involving Kaduna Electricity Distribution Company this month further illustrates the financial and operational difficulties still confronting the distribution segment.


Until these constraints are addressed, increased oil and gas production alone will not translate into the broader industrial transformation Nigeria needs.


Africa: Renewed appetite for hydrocarbons meets persistent power shortages

Across the continent, this week revealed a familiar contradiction: international interest in African oil and gas resources is returning, yet millions of Africans continue to face unreliable access to electricity.


Angola recorded two offshore discoveries during the week. TotalEnergies announced the Acacia-5 discovery and expects it to contribute roughly 6,000 bpd to production from Block 17. The company also agreed to acquire a 40% operated stake in two additional exploration blocks and indicated plans to invest approximately $10 billion in Angola over the next five years.


Separately, ExxonMobil and its partners announced another offshore discovery in Block 15, reinforcing Angola’s position as one of Africa’s key destinations for deepwater investment.


Senegal is likewise preparing to attract additional upstream capital. The country announced plans to market 109 oil and gas blocks, with just four of its 113 blocks currently under contract.


Yet the continent’s electricity deficit remains a fundamental obstacle to economic development.


In The Gambia, prolonged power outages prompted public protests as the country endured extreme temperatures. Authorities have pledged additional generation capacity, including a 24-MW generating unit and a planned 50-MW solar project.


The contrast is difficult to ignore: Africa possesses substantial hydrocarbon and renewable-energy potential, but many countries still struggle to deliver reliable electricity to households and businesses.


Global market: Oil breaks above $100 as supply risks intensify

The global oil market was the defining energy story of the week. Brent crude settled at $104.61 per barrel on September 11, while West Texas Intermediate closed at $100.05. The figures put both benchmarks on track for weekly gains of about 8%.


The surge reflects growing concern over the security of global oil supplies amid the escalating conflict in the Middle East and disruptions affecting key maritime routes around the Strait of Hormuz and Bab el-Mandeb.

Saudi Arabia also temporarily shut its 1,200-kilometre East-West pipeline, which has the capacity to transport as much as 5 million bpd, following a drone attack.


The International Energy Agency has warned that global oil supply could decline by approximately 5.7 million bpd, or 6%, in 2026. Saudi crude production has also fallen to around 6 million bpd, its lowest level in more than three decades.


OPEC+ has so far adopted a cautious approach. The group kept October production levels unchanged, signalling limited willingness to respond aggressively to the tightening market.


OPEC has also lowered its forecast for global oil-demand growth in 2026 to 380,000 bpd, marking its fifth consecutive downward revision.


The week ahead

The key question for the energy market is no longer simply whether oil can remain above $100 per barrel. The bigger issue is whether global supply can be stabilised without adding further pressure to inflation or undermining economic growth.


For Nigeria, elevated crude prices should be viewed as an opportunity rather than a strategy. The greater prize is to use stronger petroleum revenues and renewed investor interest to increase oil and gas production, expand domestic refining, strengthen gas infrastructure, improve electricity supply, develop petrochemicals and build a broader industrial base.


For Africa as a whole, the challenge is even broader: transforming abundant natural and energy resources into reliable power, competitive industries, productive jobs and sustainable economic value. Africa has the resources but the critical question is whether it can build the infrastructure, institutions and investment environment required to turn those resources into lasting prosperity.