The recent restrictions and heightened tensions in the Strait of Hormuz have once again exposed the fragility of global energy supply chains. As one of the world’s most critical chokepoints, the Strait handles nearly 20% of global oil trade. Any disruption sends shockwaves across markets — pushing crude prices above $100 per barrel, inflating refined product costs, and threatening energy security, especially for import-dependent regions like Africa.
For Nigeria — Africa’s largest crude oil producer and holder of the continent’s largest refinery capacity — this episode should serve as a stark wake-up call.
Despite our vast hydrocarbon resources, Nigeria has struggled to meet both domestic and regional energy needs at the required scale. While crude production has stabilised between 1.3 and 1.6 million barrels per day, it remains significantly below the 2 million barrels per day target and historical peaks. Oil theft, pipeline vandalism, and security challenges in the Niger Delta continue to undermine output and revenue.
On the positive side, the Dangote Refinery is beginning to change the narrative. Now operating at its full 650,000 barrels-per-day capacity, the refinery has started exporting gasoline and other products to several African countries including Côte d’Ivoire, Cameroon, Ghana, Togo, and Tanzania. This marks a historic shift from being a net importer of refined petroleum products to becoming a potential regional supplier. Yet, this is only the beginning. The continent’s demand far exceeds current supply capabilities, and recurring global supply shocks continue to expose our vulnerability.
Why This Matters for Petroleum Professionals and Energy Leaders
Africa remains one of the most energy-poor regions in the world, with over 600 million people lacking reliable electricity access. Most African nations still import the bulk of their refined fuels from Europe and the Middle East, often at premium prices exacerbated by long transit routes and geopolitical risks. Every disruption in the Strait of Hormuz or other chokepoints translates directly into higher operating costs, increased inflation, and reduced industrial competitiveness across the continent.
Nigeria is uniquely positioned to lead Africa’s energy transformation. With substantial proven reserves, growing refining capacity, technical expertise, and strategic location, we have the ingredients to become Africa’s energy hub. What is urgently required is decisive execution.
Key Imperatives for the Industry and Government:
1. Ramp up Crude Oil Production Securely
Aggressive measures are needed to combat crude oil theft, secure pipelines, and restore investor confidence. Fast-tracking deep-water projects, marginal field developments, and effective community engagement in the Niger Delta must be prioritised to achieve and sustain 2+ million barrels per day.
2. Expand Downstream Capacity and Efficiency
Beyond Dangote Refinery, we must encourage more private sector investment in refining through full deregulation and improved policy clarity. Nigeria should aim to not only meet domestic demand but become the primary supplier of quality, affordable refined products to West, Central, and East Africa.
3. Leverage AfCFTA for Intra-African Energy Trade
The African Continental Free Trade Area provides a ready framework. We must reduce tariffs, invest in cross-border logistics and pipelines, and promote knowledge transfer to position Nigerian petroleum products and expertise as the backbone of Africa’s energy security.
4. Balance Oil Leadership with Energy Transition
While the world transitions toward renewables, Africa’s immediate energy poverty demands pragmatic utilisation of our oil and gas resources. Revenues from increased production should be strategically deployed into gas-to-power projects, cleaner fuels, and renewable integration.
The recent Hormuz tensions may ease temporarily, but the underlying risks to global energy security remain. As petroleum engineers, geoscientist, energy executives, and policymakers, we have both the responsibility and the opportunity to shape a more resilient future.
Nigeria must stop being a passive player in Africa’s energy story. It is time for the Giant of Africa to fully awaken — producing more, refining more, and delivering energy solutions across the continent.
Fellow SPE members, energy professionals, and industry leaders: What are your thoughts on the steps Nigeria must take to maximise its potential as Africa’s energy leader? I welcome your insights and discussions in the comments.
Let us turn today’s challenges into tomorrow’s opportunities for Nigeria and the entire African continent.
Olowo O. Lazarus
Petroleum Professional | SPE Member | Energy Advocate
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