Aliko Dangote built his empire on cement and sugar, but his grandest gamble is oil. Rising from the swampy flats of Lekki, just outside Lagos, the $20bn Dangote Refinery was hailed as a turning point for Nigeria and Africa: the moment the continent’s most populous nation would stop importing fuel and start refining its own abundant crude. But less than a year into operations, Africa’s largest refinery is embroiled in a crisis that threatens not only its commercial viability but also Nigeria’s place in the global energy order. Locked out of domestic supply by international oil majors and squeezed by Nigeria’s weak regulatory regime, Dangote is reportedly preparing to turn to the world’s most controversial supplier: Russia. If consummated, such a move would be a coup for Moscow’s sanction-battered oil traders – and a headache for Washington, Brussels, and even Abuja.
A refinery starved in an oil-rich nation
The paradox could not be starker. Nigeria pumps around 1.5 million barrels per day (bpd) of crude. Yet Dangote, whose refinery has capacity to process 650,000 bpd, struggles to secure consistent feedstock from the very same producers operating on Nigerian soil.
International oil companies (IOCs) such as ExxonMobil, Chevron, Shell, and TotalEnergies have little incentive to divert barrels to Lagos. Global markets pay higher premiums for Nigeria’s prized light sweet crude, particularly refiners in Europe and India seeking alternatives to Russian oil. “Dangote is competing not just with Nigerians, but with global demand,” said a senior official at the Nigerian National Petroleum Company (NNPC). “The majors will always chase the highest bidder. Without regulatory compulsion, local supply is an afterthought.”
This reality has pushed Dangote to the courts. According to insiders, the tycoon is preparing a complaint against the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), seeking enforcement of domestic crude allocation policies. Nigeria’s Petroleum Industry Act technically requires producers to satisfy domestic demand before export, but enforcement has been patchy at best. “Without regulatory muscle, the refinery risks becoming a white elephant,” said energy lawyer Uche Igwe.
The Russian temptation
Enter Russia. Since Vladimir Putin’s invasion of Ukraine, Moscow has been forced to reroute its oil exports away from Europe. Sanctions imposed by the G7, EU, and Australia capped Russian crude sales at $60 per barrel, forced traders to rely on shadowy middlemen, and triggered the rise of the so-called “ghost fleet” of ageing tankers sailing without insurance or transparent ownership. One such trader, Theia Trading, a Dubai-based subsidiary of sanctioned Demex DMCC, has struggled to place shipments. In recent weeks, its tanker Ocean Jupiter was denied port entry in Senegal and Togo. Ghana, its next target, is also likely to refuse. Nigeria, however, presents a tantalizing option. Not only is the Dangote refinery desperate for crude, but Russia’s heavily discounted barrels – sometimes sold $15–20 below Brent benchmark; could slash Dangote’s input costs. “This is Moscow’s dream scenario,” said a Western diplomat in Abuja. “Sanctions have squeezed their African market. If Nigeria, the continent’s biggest economy, starts buying Russian crude, it breaks the firewall.”
Washington’s looming shadow
But such a pivot carries enormous risks. US President Donald Trump, now a dominant political force again, has vowed to impose 100% tariffs and secondary sanctions on countries buying Russian oil. Even under President Joe Biden, Washington has quietly leaned on African capitals to avoid entanglement with sanctioned entities. India, once Moscow’s lifeline, has already scaled back Russian purchases under American pressure. If Nigeria were to step into that breach, it could trigger not only economic retaliation but also diplomatic isolation. “Dangote may see a cheap fix, but the cost could be Nigeria’s strategic relationship with the U.S.,” warned Zainab Musa, a Lagos-based geopolitical analyst. “It’s not just about oil. It’s about counterterrorism support, financial markets, and debt relief. Nigeria has more to lose than it thinks.”
The “Japa” wave and domestic insecurity
The refinery drama unfolds against the backdrop of Nigeria’s deepening social and economic malaise. Inflation is at record highs, the naira has tumbled, and millions of young Nigerians are fleeing abroad in the “Japa” migration wave. Fuel prices, already politically explosive, remain volatile despite the refinery’s promise to stabilize supply.
Dangote has repeatedly warned that cheap, sanctioned Russian petroleum products are flooding African markets, undercutting local refiners. His grievance is not just commercial but existential: if African refiners cannot compete with dumped Russian diesel and gasoline, the continent’s long-delayed march toward energy independence may collapse before it begins. “Russia is both the problem and the solution for Dangote,” quipped one industry insider.
The global chessboard
At stake is more than one refinery’s survival. The Dangote saga encapsulates the shifting tectonics of global oil.
• Russia, locked out of Western markets, is aggressively courting Africa, using discounted barrels to build new alliances.
• The U.S., flush with shale production, is now Nigeria’s unexpected competitor in crude exports even as it seeks to contain Moscow. Nigerian imports of U.S. crude have surged in 2025, often undercutting local supply.
• China and India, wary of Western pressure, are recalibrating their energy mix, leaving Africa as one of the few remaining battlegrounds for Russian barrels.
In this geopolitical chessboard, Nigeria risks becoming both a pawn and a prize. Yet the heart of the crisis is not geopolitics but governance. Nigeria’s inability to enforce its own laws — ensuring domestic refineries receive priority crude — has turned an energy dream into a national embarrassment. “Dangote’s refinery was supposed to be Nigeria’s ticket to sovereignty,” said Igwe, the energy lawyer. “Instead, it shows the capture of the state by vested interests. If our largest private investor has to go abroad for oil, what hope is there for smaller players?” The irony, analysts note, is that Nigeria’s leaders celebrated the refinery as a monument to self-reliance, only to watch it seek salvation in Moscow’s sanctions-strained exports.
What happens next?
Three scenarios loom:
1. Regulatory enforcement: If the NUPRC bows to pressure, it could compel IOCs to allocate more crude domestically. But such a move risks arbitration battles and could deter future investment in Nigerian oil.
2. Russian imports: If Dangote proceeds, Nigeria may enjoy temporary relief but risk U.S. retaliation, reputational damage, and exposure to unstable shadow fleets.
3. Hybrid solution: Dangote may continue importing U.S. crude — already a growing share of Nigeria’s imports — while supplementing with occasional Russian shipments quietly routed through intermediaries.
Whichever path unfolds, the refinery has become a geopolitical flashpoint.
The verdict
The Dangote refinery was meant to be Africa’s energy crown jewel. Instead, it now finds itself entangled in a web of sanctions, corporate self-interest, and state dysfunction. For Nigeria, the lesson is clear: without coherent governance and strategic clarity, even the boldest projects can become bargaining chips in global rivalries. As one Abuja-based diplomat put it: “Dangote wanted to make Nigeria self-sufficient. But in today’s world, no refinery is an island.”
