Over 40m barrels Nigerian and Angolan oil unsold amid global oversupply

By: Chidozie Nwali

A massive glut in the West African crude market has left approximately 20 million barrels of Nigerian oil and several cargoes of Angolan crude without buyers, as a global oversupply drives international prices to their lowest levels in months.

The overhang, described by traders as “unusual” for this time of year, has contributed to a sharp sell-off in the futures market, pushing Brent crude below $60 per barrel on Friday, its lowest since April—a significant drop from the levels required to sustain the national budgets of Africa’s top producers.

Analysts said, the backlog for December and January loading windows has reached critical levels, with  Nigeria’s 20 million barrels (roughly 10–12 Very Large Crude Carrier cargoes) unsold. And Angola with five to six major cargoes for January loading are still searching for a destination. Reuters reported.

Estimates earlier this week suggested the combined West African surplus peaked at nearly 40 million barrels.

Nigeria’s 650,000 bpd Dangote Refinery, which has become a major local consumer, is scheduled for maintenance in January 2025. This has temporarily reduced domestic demand, forcing more Nigerian crude back into an already saturated international market.

Analysts said Cheap supplies from the Middle East, Argentina, and Brazil are aggressively displacing West African grades. Specifically, Middle Eastern producers have lowered their Official Selling Prices (OSPs) for January, offering shorter shipping routes and better margins for Asian refiners.

Despite ongoing Western sanctions, Russian crude continues to find a home in India and China, traditional strongholds for Nigerian and Angolan medium-heavy grade crude oil.

Last week Saturday, JP Morgan projected over 3 million barrels (mbpd) per day surplus for 2026 leading to 2027.

The International Energy Agency (IEA) recently revised its global outlook, projecting a 3.8 mbpd surplus heading into 2026. This “lopsided” balance has killed buying pressure.

The inability to clear these volumes is a direct threat to Nigeria’s 2025 Appropriation Act. The federal budget, signed earlier this year by President Bola Tinubu, was built on a benchmark price of $75 per barrel (Current market: ~$59).

With the price now trading nearly 20% below the benchmark and millions of barrels sitting in storage, the federal government faces a widening deficit. However, the government has strengthened its non-oil revenue trying to close any deficit.

Traders are now closely watching OPEC+ to see if the alliance will intervene with deeper production cuts to stabilize prices, though some members may resist further reductions given the need for export revenue.

OPEC+ had announced a 137,000 bpd production for December, and first quarter of 2026.