West African crude is set to face stiff competition in 2026, as rival supplies from Brazil, Guyana and the US tempt buyers.
Traders paint a bearish picture for Nigerian crude early in the new year because Europe is well supplied with cheaper alternatives like Brazilian medium sweet Buzios and competitively-priced Mediterranean grades that are favoured for their proximity.
Europe was destination for nearly 46pc of Nigeria's crude exports in 2025, or roughly 588,000 b/d, compared to nearly 630,000 b/d or 50pc in 2024, according to data from Vortexa.
In late 2025 Nigerian crude was in strong demand in Europe, ahead of the EU embargo on diesel derived from Russian crude that had pushed regional product crack spreads to near two-year highs. Favourable long-haul arbitrage economics had further buoyed appetite in Europe, and a brief contango structure in crude markets — physical North Sea Dated at a discount to Ice Brent futures — made cargoes from west Africa equally appealing to European refiners as local alternatives.
But refining margins have come off their peaks, and ample availability of sweet crude in Europe threatens an overhang of Nigerian supply. Around 20 of 48 January-loading Nigerian crude cargoes are still seeking buyers. This could pressure fob differentials early in January, as activity in the west African crude market is largely muted over the Christmas holiday period.
Competitively-priced US light sweet WTI will continue to cannibalise some demand for Nigerian crude in Europe and from Nigeria's 650,000 b/d Dangote refinery.
For Angolan exports, Brazilian sweet grades and Guyanese crudes like Golden Arrowhead are likely to win out in China, the west African country's largest market, because of more appealing delivered prices. Chinese buying of Angolan crude already fell in the second half of 2025, as refinery maintenance and US sanctions on one of Sinopec's main import terminals weighed on demand. There were around five January-loading cargoes of Angolan crude still unsold as of 23 December.
Chinese oil firms may buy less west African crude on the spot market for February deliveries, because they will take more from Saudi Arabia. Saudi state-controlled Aramco's Chinese customers will collectively receive around 1.6mn b/d of January-loading term crude, according to market sources, around 35pc higher than their December allocations.
Buying appetite from other Asia-Pacific refiners waned toward the end of 2025, following a flurry of Indian and Indonesian buying in Nigerian and Angolan tenders for delivery in February. Nearly 490,000 b/d of west African crude has been exported to India and Indonesia so far in 2025, compared with 380,000 b/d in 2024, Vortexa data show.
It remains to be seen if west African crude will enjoy a bounce in demand from Indian buyers in 2026. In early December, at least one state-owned Indian refiner was considering stepping up purchases of Russian Urals crude, sources with knowledge of the matter told Argus, after weeks of subdued interest since the US announced sanctions on Russia's largest oil producers, Rosneft and Lukoil.
Regardless of demand, west African suppliers face a likely oil supply glut next year, which will probably subdue prices. Argus Consulting estimates point to a surplus of around 1.5mn b/d. The Opec+ group of producers, led by Saudi Arabia and Russia, has paused its monthly production increases for the first quarter — an acknowledgement of oversupply concerns. But unless crude prices drop to the mid-$50s/bl, Opec+ may be tempted to start opening the taps again from the second quarter.
