Oil producers should invest in Nigeria to diversify supply in time of crisis, minister says

The Middle East conflict shows why Gulf oil and gas producers should regard Nigeria as a partner, not a rival, to help diversify supply during crises, Foreign Minister Yusuf Tuggar told Reuters.

The remarks come as war in Iran disrupts shipments through the Strait of Hormuz, a corridor for about a fifth of global supply, forcing exporters to halt shipments and triggering price spikes.

Nigeria's untapped reserves offer Gulf states an alternative source of crude and gas at a time when global flows are vulnerable and demand for hydrocarbons is set to remain strong for years, Tuggar said.

Nigeria, long hampered by underinvestment, theft and pipeline vandalism, has lifted total output to about 1.7 million barrels per day from 1.4 million when President Bola Tinubu took office in 2023 and could grow further with new capital for fields and pipelines, Tuggar added.

Some analysts say U.S. and Israeli strikes on Iran, and Tehran's attacks on Gulf states, could prompt the region to defer African bets, but Tuggar said the opposite could also prove true.

Tuggar said Nigeria has felt the pain of costlier oil because it imports large volumes of refined products, lifting transport and food prices, especially during the Muslim fasting month of Ramadan, when consumption typically rises.

But he said Nigeria was better placed to withstand longer‑term shocks as domestic refining expands.

The privately owned Dangote refinery says it is operating at name plate capacity of 650,000 barrels per day, enough to meet domestic needs.

Production: Marissa Davison, Kazeem Sanni, Angela Ukomadu, Shenfield Jonathan/Reuters