…NNPC Limited remains supplier of last resort
-Felix Douglas
MEMAN, in collaboration with S&P Global Energy, hosted a virtual webinar to examine how ongoing geopolitical tensions are affecting global refined product markets and shaping the resilience of West Africa’s downstream sector. The session combined global market insights with local operator perspectives, focusing on pricing volatility, supply security, and Nigeria’s transit ion to a deregulated market. The session was moderated by Mr. Clement Isong, who emphasized the importance of a resilient, competitive, an d well – regulated market framework to support long -term stability.
MEMAN Chairman, Huub Stokman, was of the view that the ongoing crisis in the Middle East has heightened uncertainty in global oil markets, particularly due to concerns over supply disruptions and critical shipping routes such as the Strait of Hormuz. He explained that these developments have triggered increased volatility in oil prices, higher freight costs, and shifting global supply chains.
According to him, while the situation presents challenges for downstream operators and consumers through rising costs, it also offers a strategic opportunity for West Africa—particularly Nigeria—to position itself as a reliable energy hub given its high-quality crude, expanding refining capacity, and large domestic market.
Stokman spoke from industry perspective that Nigeria’s domestic refining capacity provides a buffer against global disruptions but also introduces concentration risk. He highlighted the importance of agile supply arrangements and effective coordination across the value chain.
He confirmed that domestic pricing continues to reflect global market trends and explained that price movements —particularly the perception that prices rise faster than they fall —are driven by working capital requirements and inventory management dynamics.
The NNPC Retail Service boss said Nigeria remains in a relatively strong supply position, with over 30 days of PMS coverage, and reaffirmed the role of NNPC Limited as supplier of last resort.
Stokman appreciated S&P Global for their invaluable partnership with MEMAN.
“It is their global analytical authority that makes this collaboration meaningful and elevates it to international standards. So, I sincerely thank S&P Global for their continued partnership with MEMAN and for helping the industry understand developments not just in Nigeria but also globally.”
“We regularly host webinars, and I think the timing of today’s session could not have been better. With the ongoing crisis in the Middle East, there is profound uncertainty in the global energy markets. The world is closely watching the Middle East, and the region, in turn, is observing the world’s reactions. Decisions and actions taken now can shape West Africa’s energy trajectory for years to come.”
Considering this geopolitical crisis, the first impact is the disruption to Iranian crude output, a country that produces an average of 3 million barrels per day. This disruption has ripple effects on global oil prices, shipping routes, and market sentiment. The Strait of Hormuz, which handles about 20% of the world’s oil flow, remains a live concern, keeping the market on edge, the MEMAN Chairman added.
We don’t have a crystal ball, so we cannot predict how long this crisis will last. Will it escalate? Could there be another flashpoint? These uncertainties are part of life, and we must navigate them.
For the oil industry, this means higher and more volatile prices, creating a double -edged reality: an opportunity for producers but added pressure on the downstream sector and consumers. Global supply chains are being rerouted and renegotiated in real time . Buyers once dependent on Iranian crude now have to explore alternative markets. Shipping costs, insurance premiums, and refining margins are all being repriced. Downstream operators, including MEMAN members, feel these impacts in daily operations and pricing decisions. Even investor confidence in certain regions may be tested.
Stokman pointed out that West Africa is presented a time -sensitive opportunity to position itself as a reliable and strategic energy partner globally. Nigeria, as Africa’s largest oil producer, with high -quality crude, growing refining capacity, including the operational Dangote Refinery and a large and increasingly sophisticated domestic market, has significant potential. Of course, to capitalize fully on this moment, the region must address issues such as pipeline security, production consistency, regulatory transparency, and infrastructure investment.
MEMAN has a responsibility to advocate for conditions that allow the market to function efficiently, competitively, and in the national interest.
Now, what is the role of industry associations and partnerships like this one with S&P Global?
In times of uncertainty, information is power. Platforms like this webinar, in collaboration with S&P Global, provide the data and analytical depth that allow in dustry leaders to make informed decisions rather than reactive ones. MEMAN’s partnership with S&P Global reflects the principle that local knowledge must meet global intelligence.
He said MEMAN exists precisely for moments like this: to aggregate the voice of the market, engage with regulators, and ensure the industry speaks with a coherent voice when it matters most.
On the aspect of global market dynamics, Mr. Gary Clark outlined the immediate impact of geopolitical tensions on refined product markets, particularly the sharp increase in middle distillate margins. He noted that jet fuel and diesel crack spreads have risen significantly due to supply disruptions, logistical constraints, and risk premiums.
He highlighted Europe’s dependence on Middle Eastern supply and the impact of vessel rerouting around the Cape of Good Hope, which has increased freight costs and tightened prompt supply. He also noted growing offshore trading activity in West Africa, although infrastructure limitations remain a constraint.
On Regional Energy Security, Mr. Stanislas Drochon examined Sub -Saharan Africa’s exposure to global shocks, noting persistent vulnerabilities driven by import dependence, limited refining capacity, and inadequate storage infrastructure.
He emphasised that energy security across the region —reliability, affordability, and accessibility —is under pressure, and that long -term resilience will require sustained investment in refining, storage, and supply chain infrastructure.
Mr. Joe Nwakwue discussed Nigeria’s transition to a deregulated downstream market, noting that pricing remains largely linked to international benchmarks despite increasing domestic refining capacity.
He described the current phase as a period of adjustment marked by volatility, rising prices, and structural shifts. He stressed the importance of maintaining a competitive (“contestable”) market, supported by strong regulation, policy clarity, and continued access to multiple supply sources.
The MEMAN webinar underscored that while Nigeria is better positioned than many regional peers due to its growing refining capacity, it remains closely linked to global market movements. Speakers highlighted that building resilience in the downstream sector will require sustained policy consistency, infrastructure development, effective regulation, and competitive market structures. While short-term volatility is expected, ongoing reforms are laying the foundation for a more efficient and responsive market in Nigeria and across West Africa.
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