Mounting geopolitical tensions and supply disruptions are sending shockwaves through global energy markets, forcing countries to rethink their energy strategies while exposing structural weaknesses across Africa’s oil and gas value chain.
In response, financial experts and energy stakeholders across the continent are advancing plans to mobilise about $120 billion to construct six mega refineries on the scale of the Dangote Refinery. The initiative is aimed at insulating African economies from persistent global supply shocks and meeting rising domestic demand for refined petroleum products.
The proposal gained urgency at ARDA Week held in Cape Town, where stakeholders warned that crude supply bottlenecks, pricing inefficiencies and limited financing continue to undermine Africa’s energy security. Without decisive investment in refining capacity, they cautioned, the continent risks deepening its reliance on imported fuels despite abundant natural resources.
Industry leaders highlighted a gradual transformation already underway, particularly in Nigeria, where private sector participation is expanding after decades of state dominance. Chairman of OPAC Refineries and founder of OMSA, Momoh Oyarekhua, noted that multiple licensed operators are now active, with others at various stages of development—signalling a steady shift toward privately driven refining capacity.
Reinforcing this position, infrastructure experts stressed that true energy sovereignty requires control across the entire value chain—from upstream extraction to downstream refining and distribution—ensuring African resources are processed and consumed locally.
While Africa looks inward, global markets are reacting outwardly to supply shocks. Disruptions to Liquefied Natural Gas (LNG) flows through the critical Strait of Hormuz have tightened supply, prompting utilities and industrial users across Europe and Asia to revert to coal. The shift has driven a notable surge in thermal coal demand, even as countries maintain long-term decarbonisation commitments.
Recent market data show benchmark coal prices climbing steadily. FOB Newcastle 6,000 kcal/kg coal averaged $126 per tonne in March 2026 and has since risen to about $132 per tonne, up from $114 in February. Similar trends were recorded across other benchmarks, including FOB Richards Bay at roughly $110 per tonne and CIF ARA prices at $123 per tonne.
Analysts note that although the Hormuz corridor does not directly handle coal shipments, disruptions to gas flows have triggered ripple effects across the global energy system. Major exporters—Australia, Indonesia, Russia, South Africa and Colombia—remain largely insulated from logistical constraints but are benefiting from increased demand.
In North-East Asia, coal-fired generation has remained resilient despite seasonal demand fluctuations. Taiwan, for instance, is preparing to restart the 2.1-gigawatt Hsinta coal-fired power plant, which could consume an estimated 5.5 million tonnes of coal annually.
Amid these developments, global advocacy groups are intensifying pressure on policymakers. More than 130 civil society organisations have called on finance ministers attending the IMF-World Bank Spring Meetings to push for an end to the ongoing conflict in South West Asia and impose windfall taxes on oil and gas companies profiting from the crisis.
To amplify their message, activists projected “No Bombs, No Barrels” onto the headquarters of the International Monetary Fund and the World Bank in Washington, D.C., where the meetings are taking place amid warnings of a possible global recession.
In a joint statement, the coalition argued that governments have failed to adequately address the economic fallout of the war, despite clear evidence that energy firms are recording massive profits while households struggle with rising living costs. They estimated that more than $100 billion was extracted from consumers in a single month due to conflict-driven energy price increases.
The groups outlined four key demands: an immediate and permanent end to the war, taxation of fossil fuel windfall profits, increased investment in renewable energy and sustainable agriculture, and cancellation of debt owed by Global South countries. They also warned that continued imbalance in global governance structures risks eroding trust, turning multilateral institutions into instruments of dominance rather than fairness.
Paradoxically, while the humanitarian toll of the conflict continues to mount, oil and gas companies are poised for historic gains. Industry analysis suggests that if crude prices average $100 per barrel this year, major producers and corporations could generate up to $234 billion in windfall profits.
Among the biggest beneficiaries are Saudi Aramco, projected to earn an additional $25.5 billion, and Kuwait Petroleum Corporation with $12.1 billion. International oil majors such as ExxonMobil and Chevron are also expected to post gains of $11 billion and $9.2 billion respectively. In the first month of the conflict alone, the top 100 oil and gas firms reportedly generated over $30 million per hour in paper profits.
Market indicators remain strong, with Brent crude for June delivery trading at $95.60 per barrel, while West Texas Intermediate stands at $91.87, reflecting sustained bullish sentiment linked to tightening supply expectations.
Back in Nigeria, the upstream sector is showing modest recovery. Data from the Nigerian Upstream Petroleum Regulatory Commission indicate that production rose by 4.2 per cent to 1.546 million barrels per day (mbpd) in March, up from 1.483 mbpd in February. Crude output alone increased by 5.2 per cent to 1.382 mbpd.
Despite this improvement, production remains below both the Organization of the Petroleum Exporting Countries quota of 1.5 mbpd and the government’s 2026 budget benchmark of 1.84 mbpd. Earlier projections had suggested output could reach 1.8 mbpd, prompting Nigeria’s finance minister to describe the rebound as “fantastic news” while urging sustained growth toward a two million barrels per day target.
However, challenges persist in the downstream segment. According to the Nigerian Midstream and Downstream Petroleum Regulatory Authority, total Premium Motor Spirit (PMS) supply fell sharply to 39.5 million litres per day in February 2026, down from 64.9 million litres per day in January.
The 25.4 million litre decline was driven primarily by a steep drop in imports, even as domestic refining—boosted by increased output from the Dangote Refinery—remained relatively strong. Local production contributed 36.5 million litres per day in February, while imports plunged to just three million litres per day, one of the lowest levels recorded in recent months.
This contrasts sharply with January figures, when domestic supply stood at 40.1 million litres per day alongside 24.6 million litres per day of imports, highlighting the scale of the adjustment in external sourcing.
The situation underscores the fragile equilibrium sustaining Nigeria’s fuel market and, more broadly, Africa’s energy systems. Even as local refining capacity improves, gaps in supply chains and infrastructure continue to expose vulnerabilities.
As global energy dynamics grow increasingly unpredictable, Africa’s push to expand refining capacity is emerging not merely as an economic strategy, but as a critical safeguard for long-term energy security.