By Ukumbi Afrika 
Wednesday, 26th August 2026
Nigeria's Qua Iboe crude strengthened in the physical market this week as an easing supply overhang provided support, although higher freight rates continued to weigh on West African crude economics.
Qua Iboe was offered at dated Brent plus $5.25 per barrel, according to a trader, marking an increase from levels heard in the previous week.
The firmer offer comes as the number of unsold Nigerian crude cargoes for September has declined. Between 10 and 20 Nigerian cargoes were still seeking buyers this week, down from indications of around 25 cargoes last week.
However, freight costs remain a significant headwind. Freight rates on several key routes for West African crude have climbed back towards multi-year highs reached during the early stages of the U.S.-Israeli war with Iran, according to Riverlake data.
The combination of stronger crude premiums and elevated shipping costs is keeping pressure on margins for buyers and refiners across the region.
Dangote Refinery Faces Crude Supply Challenge
The wider Nigerian oil market is also being shaped by the growing crude requirements of the Dangote Petroleum Refinery, Africa's largest refinery.
The refinery is currently operating at its initial full capacity of around 650, 000 barrels per day and has tested runs of about 700, 000 barrels per day. It plans to eventually double capacity, increasing the importance of securing reliable and competitively priced crude supplies.
Dangote has already been importing significant volumes of crude, with the refinery’s coastal location providing flexibility to source barrels internationally when domestic supplies are insufficient.
For Nigerian crude producers, stronger demand from Dangote could provide additional support for local grades such as Qua Iboe. But for the refinery, higher crude premiums and freight costs could increase the challenge of maintaining competitive refining margins as it expands.
Nigeria's growing refining capacity is also reshaping regional petroleum trade, with Dangote increasingly contributing to the rise in West African refined-product exports.
Source: Reuters
Reporting: Alex Lawler and Seher Dareen
Editing: Lisa Shumaker