The growing crisis in the Middle East is tightening the noose around Africa’s fuel supply chain, with many countries now running on just weeks of refined petroleum products as key import routes come under severe strain.

This follows escalating tensions linked to the Iran war, which has significantly disrupted shipments through the Strait of Hormuz, a critical artery for global energy flows.

According to the International Energy Agency, about 600,000 barrels per day of petroleum products typically destined for Africa from the Middle East are now at risk, as tanker traffic through the corridor slows to a trickle.

The development has forced governments across the continent to urgently seek alternative supply sources, amid fears that wealthier nations could outbid African buyers in an increasingly tight global market.

A report by Bloomberg noted that the unfolding disruption is exposing long-standing structural weaknesses in Africa’s energy system, particularly the continent’s heavy dependence on imported refined products due to years of refinery closures and underinvestment.

Data from energy analytics firm Kpler also paints a stark picture of the disruption, noting that petroleum product loadings fell sharply from 580,000 metric tonnes in January to 183,000 metric tonnes in February, representing a steep decline of 397,000 metric tonnes, or 68.4 per cent.

The situation worsened in March, as volumes plunged further to zero, marking a complete 100 per cent drop from February levels.

Overall, the region lost the entire 580,000 metric tonnes recorded at the start of the quarter, underscoring a total supply breakdown within just three months and reflecting the severity of disruptions in global fuel trade flows.

Industry tracking also showed that several cargoes originally destined for Europe and Africa have been rerouted to Asia, where demand has surged amid the crisis.

One such vessel, the Brest, initially bound for Rotterdam after loading in India, abruptly changed course near East Africa and diverted towards Indonesia, highlighting the shifting dynamics in global fuel trade.

The ripple effects are already being felt across Africa, particularly in East and Southern regions, where dependence on Middle Eastern fuel imports is highest.

“We are looking everywhere for supply options,” Director-General at South Africa’s Department of Mineral Resources, Jacob Mbele, said in an interview.

“We are comfortable that in the coming weeks or so, we are safe, but the situation is fluid; it changes every day,” he added.

The report warned that securing fuel cargoes will become increasingly difficult for African countries, many of which operate with limited foreign exchange reserves and weak bargaining power.

The crisis is further compounded by the continent’s declining refining capacity. Despite accounting for about seven per cent of global crude oil production, Africa has lost roughly a third of its refining capacity over the past two decades.

This has left many economies heavily reliant on imports from the Middle East, a dependence now proving costly.

In East Africa, countries such as Kenya, which consume about 100,000 barrels of fuel daily and import all its requirements, are particularly vulnerable. The country maintains just 21 days of fuel stock, leaving little margin for disruption.

Chairman of the Petroleum Outlets Association of Kenya, Martin Chomba, said the situation is already biting.

“The biggest suppliers are rationing product, and some distributors are experiencing stock-outs in rural areas,” he said.

Similarly, Ethiopia has urged citizens to cut down on fuel consumption as the government prioritises essential services.

Prime Minister Abiy Ahmed said in a public statement that fuel use must now be directed towards “basic and essential needs,” reflecting the growing strain on supply.

Nigeria recorded crude oil imports worth $3.74bn linked to operations of the Dangote Petroleum Refinery in 2025, highlighting a major shift in the country’s oil trade structure despite its status as a crude producer.

This was disclosed in the Central Bank of Nigeria’s Balance of Payments report, which showed that “Crude oil imports of $3.74bn by Dangote Refinery” contributed to movements in the country’s current account position.

The report noted that Nigeria posted a current account surplus of $14.04bn in 2025, lower than the $19.03bn recorded in 2024 but significantly higher than $6.42bn in 2023.

The decline from 2024 was driven partly by structural changes in oil trade flows, including crude imports for domestic refining. Data in the report showed that crude oil exports dropped from $36.85bn in 2024 to $31.54bn in 2025, representing a 14.41 per cent decline, further shaping the external balance.

At the same time, the goods account remained in surplus at $14.51bn in 2025, rising from $13.17bn in 2024, supported largely by activities linked to the Dangote refinery and improved export performance in other segments.

The CBN stated that the stronger goods balance was driven by “significant export of refined petroleum products worth $5.85bn by Dangote Refinery,” alongside increased gas exports to other economies.

The report added that the refinery’s operations also reduced Nigeria’s reliance on imported fuel, noting that “availability of refined petroleum products from Dangote Refinery also led to a substantial decline in fuel imports.”

Specifically, refined petroleum product imports fell sharply to $10.00bn in 2025 from $14.06bn in 2024, representing a 28.88 per cent decline, while total oil-related imports also eased.

However, this was offset by a rise in non-oil imports, which increased from $25.74bn to $29.24bn, up 13.60 per cent year-on-year, reflecting sustained demand for foreign goods.

Further pressure on the current account came from higher external payments. Net outflows for services rose from $13.36bn in 2024 to $14.58bn in 2025, driven by increased spending on transport, travel, insurance, and other services.

Similarly, net outflows in the primary income account surged by 60.88 per cent to $9.09bn, largely due to higher dividend and interest payments to foreign investors.

In contrast, secondary income inflows declined slightly from $24.88bn in 2024 to $23.20bn in 2025, as official development assistance and personal transfers weakened, although remittances remained a key source of inflow.

On the financial account side, Nigeria recorded a reversal, posting a net borrowing position of $1.69bn in 2025 compared to a net lending position of $9.65bn in 2024.

Portfolio investment inflows fell sharply by 48.3 per cent to $8.04bn, while foreign direct investment inflows rose to $4.01bn from $1.61bn in the previous year, indicating a gradual shift towards longer-term capital.

The report also showed increased investment outflows by Nigerians abroad, with direct and portfolio investment assets rising significantly during the year.

Despite pressures across components, Nigeria’s overall balance of payments remained positive at $4.23bn in 2025, though lower than the $6.83bn surplus recorded in 2024.

External reserves rose to $45.75bn at the end of December 2025, reflecting a 13.83 per cent increase compared to 2024 levels, supported by inflows and improved external buffers.

The PUNCH earlier reported that despite its status as Africa’s largest crude oil producer, Nigeria imported crude oil worth a staggering N5.734tn between January and December 2025 as domestic refineries grappled with persistent feedstock shortages, exposing a deepening supply paradox in the country’s oil sector.

This comes despite the Federal Government’s much-publicised naira-for-crude policy designed to prioritise local supply.

Energy analysts earlier faulted the implementation of the Federal Government’s naira-for-crude policy, arguing that it has failed to significantly improve domestic crude supply or reduce fuel prices.

The Chief Executive Officer of Petroleumprice.ng, Jeremiah Olatide, said the policy has delivered little impact since its introduction in 2024, as most refineries continue to rely heavily on imported crude.

He said, “For me, the naira-for-crude policy that was initiated in 2024 has not yielded any reasonable output because the Dangote refinery still sources about 65 to 70 per cent of its feedstock from abroad, while about 95 per cent of modular refineries also source their crude outside the naira-for-crude initiative.

“So, the initiative, for me, is not effective, and that is why we are still seeing a large inflow and importation of crude oil in 2025. In turn, prices at the depot and pump have not been different from when we were fully importing refined products.”

He noted that while the coming on stream of large-scale refining capacity has improved product availability, it has not translated into price relief for consumers.

“The only difference now is that we no longer have supply fears; there is availability of products. But in terms of pricing, I would say the naira-for-crude policy has not translated into lower prices at the depot or pump,” he added.

Jeremiah attributed this to the continued reliance on international pricing benchmarks, even for locally supplied crude.

Transnational Corporation Plc has signalled a new era of dominance in the African investment landscape, announcing a historic combined market capitalisation of N4.87tn ($3.57bn) as of 16 March 2026.

The conglomerate, which has become a bellwether for the Nigerian Exchange, accompanied this valuation milestone with a commitment to reward its 311,000 shareholders with record-breaking dividend payouts following its best financial performance in history.

The Group’s full-year 2025 results revealed a powerhouse in ascent, with revenue surging 33 per cent to N544.41bn and profit before tax climbing to N179.50bn. These figures underscore the successful execution of a multi-sector strategy spanning power, hospitality, and energy.

Speaking during the 2025 Investors’ Call, the President and Group Chief Executive Officer of Transcorp Plc, Owen Omogiafo, emphasised that the Group’s success is a result of disciplined execution in a volatile environment.

“Transcorp achieved its best financial performance in history in FY 2025, driven by strong execution across power and hospitality.

Despite sector-wide challenges, including gas constraints and inflation, we are well-positioned for sustained expansion and long-term value creation,” she said.

The Group’s “homegrown” strategy has proven particularly effective in its hospitality business, where Transcorp Hotels Plc has insulated itself from global travel disruptions by stimulating domestic consumption and implementing an import substitution strategy for its supply chain.

At the heart of the Group’s valuation surge is its massive footprint in the power sector. Through Transcorp Power Plc and Transafam Power Limited, the Group now controls approximately 2,000 MW of installed capacity, representing 15 per cent of Nigeria’s total grid capacity.

Addressing the critical issue of gas supply and infrastructure, the Managing Director and Chief Executive Officer of Transcorp Power Plc, Peter Ikenga, noted, “We do recognise the value of ensuring consistent, reliable, and stable power generation. We have diversified our sources of gas and multiple pipelines to ensure we are robust. Even with vandalism challenges, we worked quickly to restore operations; we are back and delivering much-needed power to the grid.”

Beyond traditional thermal power, Transcorp is pivoting toward a sustainable future. The Group recently emerged as the successful bidder for a 30 MW interconnected solar-powered mini-grid project in the Federal Capital Territory, a move supported by the World Bank and the Rural Electrification Agency.

The Managing Director and Chief Executive Officer of Transcorp Energy Limited, Christopher Ezeafulukwe, highlighted the significance of this transition. “This is the most oven-fresh news to come out of the renewable energy space in Nigeria. We are taking what we know how to do best, winning assets and turning them around, and applying them to solar. When Transcorp says it is an integrated energy group, we are bringing that to fulfilment,” he stated.

The investors’ call concluded on a high note for shareholders. Despite holding significant receivables from the national power sector, the Group’s leadership assured investors that liquidity remains strong and that impairment write-backs are expected as government settlement tranches proceed.

Reflecting on the Group’s 48.7 per cent compound annual growth rate over the last five years, Ms Omogiafo reiterated the board’s intention to share the spoils of success. “We have proposed a dividend that is higher than what we gave before. We want to reassure you of our commitment to the vision. We are keen to fix power in our country, and power must be fixed. To our long-term investors: the sky is not even our limit,” she added.

With the upcoming Annual General Meetings for Transcorp Plc and Transcorp Power Plc, the market anticipates a formal ratification of these record dividends, further cementing Transcorp’s status as Nigeria’s premier diversified conglomerate.