Nigeria’s oil industry is enjoying a rare moment of momentum. After years of underperformance and insecurity in the Niger Delta, production has rebounded sharply, averaging 1.71 million barrels per day in July—almost 10% higher than the same period last year. Exports through key terminals such as Bonny and Forcados have also strengthened, with Bonny shipping 8.07 million barrels in July, a 13% jump from June, and Forcados lifting 9.04 million barrels, up 2.1% month-on-month. Security clampdowns and renewed international oil company engagement are finally bearing fruit, while rig activity has surged from just 8 in 2021 to 46 recently, suggesting the recovery is not a short-term spike. This rebound has helped Nigeria move closer to its 2025 budget benchmark of 2.06 million barrels per day, though volumes remain below target.
At the same time, India, the world’s fastest-growing oil consumer, is recalibrating its import strategy. Since 2022, New Delhi has been the largest buyer of Russia’s seaborne crude, capitalizing on discounts that allowed refiners to cushion themselves against the inflationary energy shock caused by the war in Ukraine. By 2024, Russian barrels accounted for 37% of India’s imports, making Moscow its single largest supplier. Yet this heavy reliance has now drawn Washington’s ire. The Trump administration has raised tariffs on Indian goods to 50% and threatened secondary sanctions, explicitly linking these penalties to India’s energy ties with Russia. In response, Indian refiners briefly cut Russian purchases over the summer and turned to West African grades, snapping up cargoes of Nigerian Agbami and Usan through state refiners Indian Oil and Bharat Petroleum. Indian Oil alone secured 2 million barrels of Nigerian crude for delivery in late October and early November, shifting away from the U.S. grades it had purchased just weeks earlier.
The shift is significant, not because it marks a retreat from India’s substantial intake of Russian barrels, but because it demonstrates New Delhi’s willingness to hedge. Indeed, Nigerian volumes to India more than doubled year-on-year in August. IOC has gone as far as to skip U.S. crude in recent tenders, replacing it with Nigerian and Middle Eastern cargoes. While American barrels such as WTI appear cheaper at first glance, the landed cost to India has been higher than West African grades once freight and logistics are factored in. For Nigeria, this creates a strategic opening: if sustained, Indian demand could become a cornerstone of Abuja’s export portfolio, diversifying away from traditional buyers in Europe and the Atlantic Basin.
There are, of course, limitations. Nigeria’s OPEC quota caps production around 1.5 million barrels per day, though in practice Abuja has often ignored ceilings or hinted at following Angola’s lead in reconsidering its membership. Meanwhile, the Dangote refinery—already processing 550,000 barrels per day and expected to run entirely on Nigerian crude by the end of this year—absorbs a growing share of domestic supply. If it reaches full 650,000 barrel -per-day capacity, the pool available for exports may tighten, even as global buyers look to Nigeria for alternatives.
Distance and freight costs are another constraint. Nigerian barrels generate significantly more tonne-miles if they replace Russian Far East cargoes, which inflates costs but simultaneously boosts demand for tanker capacity. For shipping markets, this dynamic is a welcome development. Still, it is improbable that India will walk away from Russian crude entirely. but the risks around overexposure are pushing refiners to diversify. Nigeria, if it can maintain and even lift production, is well placed to benefit. The combination of rising output, improving security at home, and shifting global demand patterns gives Abuja an opening it has not enjoyed for years. For shipping and commodity markets, that means more West African crude sailing longer distances, more tonne-miles, and a trade recalibration that could carry into 2026 and beyond.
What is becoming clear is that the geopolitics of oil are once again reshaping shipping lanes. Washington’s tariffs on India, Moscow’s declining refining capacity under drone attack, and Nigeria’s determination to raise output all intersect in the trade between West Africa and South Asia. Every cargo of Nigerian crude heading east is more than just a commercial deal; it is part of a recalibration of global flows.
Data Source: Intermodal