Several African economies are facing growing pressure on their refined fuel supplies, with reserves sufficient for only a few weeks, after the war with Iran disrupted traffic in the Strait of Hormuz. The situation is forcing governments to urgently seek alternative supply sources, reports Energy Connect, citing Bloomberg.
About 600,000 barrels per day of petroleum products destined for the African continent are at risk due to the sharp reduction in tanker traffic on this strategic route, according to the International Energy Agency (IEA). In some countries, these imports account for nearly all domestic consumption.
“We are seeking alternative supply sources in all markets,” said Jacob Mbele, director-general of South Africa’s Department of Mineral Resources. According to him, despite the uncertainty, there is confidence that supplies will be secured in the coming weeks, even if the situation remains volatile.
The crisis exposes the continent’s structural weaknesses. The closure of refineries and underinvestment in the energy sector have left many countries dependent on a single trade route. As the global competition for fuel intensifies, wealthier countries tend to secure supplies by offering higher prices, making access even more difficult for developing economies.
Although Africa accounts for about 7% of global crude oil production, its refining capacity has declined significantly over the past two decades. Only recently have recovery initiatives emerged, such as the new refinery opened in Nigeria by businessman Aliko Dangote.
The shortage is particularly concerning in Eastern and Southern Africa, regions that obtain approximately 75% of their fuel imports from the Middle East, according to data from the consulting firm CITAC. In these areas, safety margins are low, increasing the risk of supply disruptions.
“Although Africa accounts for about 7% of global crude oil production, its refining capacity has declined significantly over the past two decades”
In Kenya, which consumes about 100,000 barrels per day and relies entirely on imports, legislation requires minimum reserves for 21 days. Even so, the loss of a single shipment can cause significant disruptions. Reports already indicate signs of rationing and shortages in rural areas.
In Ethiopia, the government has called for the rational use of fuel, prioritizing essential sectors. The measure reflects fears that the crisis will worsen if the blockade continues.
Fuel price regulations in several African countries exacerbate the problem by limiting the market’s ability to adjust and causing concern among distributors.
South Africa has lost about half of its refining capacity in recent years due to accidents and a lack of investment. The remaining refineries cover less than half of domestic demand, estimated at over 600,000 barrels per day. The situation is exacerbated by the temporary shutdown of a major refinery in Cape Town for maintenance.
The country has about 8 million barrels in strategic reserves, in addition to partial production from coal converted into liquid fuel. Even so, dependence on imports remains high.
In Ghana, despite being an oil producer, only about one-third of domestic demand is met by local production. The remainder is imported from distant markets, including Europe and the Middle East. Current reserves are sufficient for approximately two months, offering some temporary relief.
Nigeria, on the other hand, presents a more favorable scenario. The new Dangote refinery, with its large production capacity, is gradually ramping up operations. The country is in a relatively comfortable position, with the capacity to meet domestic demand and even export surpluses. It also maintains reserves that provide a greater safety margin.
Source: AIM
