Bonny light rises amid U.S.–Russia talks

Nigeria’s flagship crude grade, Bonny Light, closed slightly higher at $68.85 per barrel at the weekend, snapping a six-session losing streak, as traders balanced geopolitical uncertainty over U.S.–Russia peace negotiations with signs of resilience in global oil supply chains.

The marginal gain came as Washington and Moscow explored a potential agreement to end the war in Ukraine — a deal that could see Russia retain territory seized since its 2022 invasion.

The talks come amid a tense backdrop in global trade policy. U.S. President Donald Trump recently doubled tariffs on all Indian imports to 50 per cent in retaliation for New Delhi’s continued purchase of Russian crude.

While global markets focus on Ukraine, Nigeria’s oil sector is experiencing its strongest production run in more than five years. Indigenous producers are ramping up output as international majors divest from onshore assets.

July output averaged 1.8 million barrels per day, supported by improved security, reduced pipeline sabotage, and innovative logistics strategies such as barging.

The Ugo Ocha terminal saw export flows rise to 65,000 barrels per day, with operators like Neconde using barges to supplement pipelines.

Industry analysts credit the Petroleum Industry Act (PIA) of 2021 for creating a more stable regulatory environment.

In July, the Dangote Refinery recorded its highest crude intake yet — 590,000 barrels per day — but only 40 per cent (220 kbd) came from Nigerian grades such as Amenam, Bonny Light, and Escravos. The remaining 60 per cent (370 kbd) came from foreign sources, partly because WTI crude has been cheaper than domestic alternatives.

Despite an agreement allowing the refinery to pay for crude in naira through the NNPC, deliveries have consistently fallen short of commitments since October 2024, forcing Dangote to source more foreign barrels.

Energy strategist Dr. Amaka Ogundele explained that the market’s muted reaction to U.S.–Russia peace talks reflects deep skepticism.

“Until there is clarity on territorial concessions and sanctions relief, traders will be cautious. A quick end to the war that restores Russian oil fully to the market would be bearish for prices, but such an outcome is far from certain.”