By Guardian Newspaper
Nigeria and several African economies may face fresh fuel supply pressures as the United States moves to stabilise maritime insurance and shipping routes in the Persian Gulf following escalating conflict involving Iran.
U.S President Donald Trump has called for a U.S.-backed political risk insurance scheme after major maritime insurers signalled they would cease providing war-risk cover for vessels entering the Gulf. From March 5, members of the London-based International Group of Protection and Indemnity Clubs are set to terminate automatic war-risk coverage for ships operating in the region, citing heightened threats of missile and drone attacks, as well as vessel seizures.
Lloyd’s of London, which underwrites up to 80 per cent of the world’s war insurance business, remains central to the global system. However, rising risk exposure has already driven up premiums, with market estimates suggesting marine hull insurance in the Gulf could increase by 25 to 50 per cent in the near term.
In response, Trump said he had directed the U.S. International Development Finance Corporation to provide political risk insurance and guarantees for maritime trade, particularly energy cargoes.
He also signalled that the U.S. Navy could begin escorting tankers through the Strait of Hormuz if necessary to ensure uninterrupted energy flows.
The Strait of Hormuz handles more than 20 per cent of global oil and liquefied natural gas trade. Brent crude has risen above $83 per barrel, reflecting fears of disruption. For Nigeria, which relies heavily on imported refined petroleum products despite being a major crude producer, higher freight and insurance costs could feed directly into pump prices and strain foreign exchange demand.
The situation has been compounded by a force majeure declaration by QatarEnergy after Iranian strikes targeted facilities linked to Ras Laffan. The company, the world’s largest single LNG exporter, suspended production across key export infrastructure, placing a significant share of global LNG supply at risk. Europe, increasingly dependent on seaborne LNG since reducing Russian pipeline imports, may face renewed supply competition.
In Asia, India’s Mangalore Refinery and Petrochemicals Limited has declared force majeure on gasoline exports as crude flows from the Gulf stall. India, which imports around 85 per cent of its crude, had increased Middle Eastern purchases in recent months.
Traders indicate that Europe could turn to diesel cargoes currently in floating storage off West Africa, particularly near Lome, where record volumes are held. While this may provide temporary relief for European buyers, it could tighten product availability within West Africa if arbitrage economics shift.
Diesel imports from India into West Africa have surged to record levels, showing the region’s dependence on overseas refined fuel despite repeated policy commitments to boost domestic refining.
Data from the Nigerian Midstream Downstream Petroleum Regulatory Authority (NMDPRA) revealed that Nigeria still import 63 per cent of its diesel as Dangote Refinery, Waltersmith Refinery, Edo and Aradel refineries supply a combined 6. 1 million litres per day compated to daily demand of about 17 million litres.
Data from S&P Global Commodity at Sea show that Indian diesel shipments to West African countries have moved sharply higher since 2022, peaking at nearly 800,000 metric tonnes by early 2026, as structural supply gaps persist across the region’s largest economies.
Industry data showed that 4.2 million barrels of diesel/gasoil are in floating storage in the Offshore Lome market as of March 2, a record volume since the data began. Most of this, approximately 2.433 million barrels, originated from the Jamnagar refinery in India. Guardian Newspapers.