The Major Energies Marketers Association of Nigeria (MEMAN), in collaboration with S&P Global Energy, has highlighted both the vulnerabilities and emerging opportunities for West Africa’s downstream petroleum sector amid ongoing geopolitical tensions, particularly in the Middle East.
This was the focus of a virtual industry webinar that brought together global analysts and regional operators to assess the impact of the crisis on refined product markets, supply security, and Nigeria’s transition to a deregulated downstream regime.
Speaking in his opening remarks, MEMAN Chairman, Huub Stokman, said the evolving geopolitical landscape has introduced significant uncertainty into global energy markets, with disruptions to Iranian crude output and risks around the Strait of Hormuz—through which about 20 per cent of global oil supply flows—keeping markets on edge.
He noted that the situation has triggered volatility in oil prices, rising shipping and insurance costs, and a reconfiguration of global supply chains, as buyers seek alternatives to traditional crude sources.
“For the oil industry, this creates a double-edged reality—opportunities for producers but increased pressure on downstream operators and consumers,” Stokman said.
He added that West Africa, particularly Nigeria, stands at a strategic crossroads, with the potential to position itself as a reliable global energy partner, provided longstanding challenges such as pipeline security, regulatory transparency, and infrastructure deficits are addressed.
Providing a global outlook, Gary Clark of S&P Global Energy said geopolitical tensions have led to a sharp rise in middle distillate margins, with jet fuel and diesel markets experiencing significant price increases due to supply disruptions and heightened risk premiums.
He also pointed to logistical challenges, including vessel rerouting around the Cape of Good Hope, which has driven up freight costs and tightened near-term supply, especially in Europe.
On regional energy security, Stanislas Drochon noted that Sub-Saharan Africa remains highly exposed to global shocks due to its dependence on imports, limited refining capacity, and inadequate storage infrastructure.
He stressed that achieving long-term energy security—defined by reliability, affordability, and accessibility—will require sustained investment across refining, storage, and supply chain systems.
Focusing on Nigeria, Joe Nwakwue described the country’s shift to a deregulated downstream market as a transitional phase characterised by price volatility and structural adjustments. He noted that despite increasing domestic refining capacity, fuel pricing remains closely tied to international benchmarks.
