In a bid to unlock Nigeria’s vast but underutilized heavy crude oil reserves, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) convened a pivotal industry workshop in Abuja.

The event, attended by key stakeholders from the oil and gas sector, focused on strategizing ways to accelerate the development of the country’s heavy crude assets through collaborative efforts.

Mr. Gbenga Komolafe, CEO of NUPRC, underscored the urgency and potential of Nigeria’s heavy crude reserves, which stand at approximately 1.6 billion barrels, with only a mere 5% currently developed.

Addressing participants, Komolafe said there is a need for a paradigm shift from traditional approaches to a more integrated and collaborative model involving all industry players.

“Heavy crude oil presents a significant opportunity for Nigeria’s energy sector,” Komolafe stated during his keynote speech themed “Entrenching Accelerated Development of Petroleum Prospecting Licenses (PPL) Assets and Heavy Crude Reserves Through Strategic Partnerships with Technology Drivers and Industry Service Providers.”

He highlighted the distribution of these reserves across different terrains and ownership structures, with a substantial portion located in onshore acreages.

Despite the challenges posed by the high viscosity and sulfur content of heavy crude, Komolafe expressed confidence that with the right technological innovations and collaborative frameworks, Nigeria can effectively harness these resources.

The workshop, a platform for intensive dialogue and knowledge-sharing, also addressed the regulatory frameworks introduced under the Petroleum Industry Act (PIA) of 2021.

This legislation aims to modernize the upstream oil and gas sector, streamline licensing processes, and attract new investments.

Participants discussed practical steps to enhance operational efficiency, ensure regulatory compliance, and foster sustainable development practices within the sector.

The event concluded with a commitment to implement agreed-upon best practices that prioritize efficiency, transparency, and environmental sustainability.

Brent crude oil prices edged closer to $86 per barrel as heightened expectations of a robust demand surge during the third quarter of the year.

This upward momentum comes amidst forecasts of an eventual drawdown in inventory levels and escalating geopolitical tensions in the Middle East.

As of Wednesday, Brent crude oil rose by 63 cents, or 0.7% to $85.64 a barrel, while the U.S. West Texas Intermediate (WTI) crude oil climbed 74 cents, or 0.9%, to $81.57.

“The ubiquitous view is that demand will increase during the summer,” remarked Tamas Varga, an oil broker at PVM. “Geopolitics is still seen as a supportive element of the equation.”

Despite a stronger dollar, which typically makes dollar-priced oil more expensive for buyers holding other currencies, the market remained resilient.

The dollar index was up 0.18%, underscoring currency strength amid expectations of potential rate cuts by the end of the year.

Analysts and industry experts pointed to anticipations of significant inventory drawdowns during the peak third quarter demand season as a key factor bolstering current prices.

The American Petroleum Institute (API) had earlier reported a modest increase in U.S. crude oil stocks, but market sources anticipate a substantial decline of nearly 3 million barrels in official inventory data expected later in the day from the Energy Information Administration (EIA).

“Suvro Sarkar, energy sector team lead at DBS Bank, noted, “It seems the market is shrugging off demand concerns for now, anticipating inventory drawdowns in peak third quarter demand season.”

Furthermore, strength in front-month oil prices indicated robust physical demand, a positive sign for near-term price stability and market buoyancy.

Analysts from JP Morgan highlighted in a client note that key indicators in the oil market are signaling a rebound supported by a stronger underlying physical market.

Geopolitical tensions also played a significant role in boosting oil prices. Recent incidents, including Houthi attacks on shipping in the Red Sea and escalating hostilities between Israel and Hezbollah in Lebanon, added to market uncertainties and contributed to bullish sentiments.

“The Houthis have so far sunk two vessels and seized another, and said on Tuesday they used a missile to hit a vessel in the Arabian Sea,” Sarkar explained, emphasizing the geopolitical risks influencing oil price dynamics.

As Brent crude approaches the $86 mark, attention remains focused on ongoing geopolitical developments, inventory data releases, and global economic indicators that could continue to sway oil market movements in the coming weeks.

In a significant protest against an anti-smuggling operation, nearly 2,000 petrol stations in Nigeria’s North-East have shut down, causing widespread fuel shortages and forcing motorists to turn to the black market.

The closures began yesterday following a crackdown by the Nigeria Customs Service (NCS), which targeted petrol outlets suspected of smuggling fuel to neighboring countries.

Dahiru Buba, Chairman of the Independent Petroleum Marketers Association (IPMAN) for Adamawa and Taraba states, revealed that the closures were a direct response to the NCS impounding tanker trucks and shutting down some fuel outlets.

This crackdown, known as “Operation Whirlwind,” aimed to curb the smuggling of subsidized petrol to Cameroon, Benin, and Togo—a practice that has thrived for years due to the significant price difference.

Buba explained that the operation initially led to the seizure of tanker trucks belonging to IPMAN members. Although the trucks were released following protests by the association, the continued impoundment of more vehicles and the closure of several petrol stations led to the widespread shutdown.

“We wrote to them [Nigeria Customs] again, but there were no responses. That is why we decided to go on strike,” Buba said, adding that over 1,800 outlets had ceased operations.

“This is our business, and we cannot be quiet when our members are treated this way,” Buba added, emphasizing the association’s frustration with the ongoing situation.

In response to the closures, the black market has surged, with fuel vendors in Adamawa’s capital, Yola, selling petrol at N1,400 per liter—significantly higher than the official pump price of between N650 and N750.

This has placed an additional burden on consumers, who now face inflated costs amid the fuel scarcity.

Mangsi Lazarus, the customs spokesperson for Adamawa and Taraba, defended the operation, stating that the impounded tanker trucks were indeed being used to smuggle petrol.

“We are simply carrying out our duty to prevent illegal activities that harm the economy,” Lazarus said.

The fuel crisis comes as oil prices edged higher globally due to anticipated strong driving demand, geopolitical tensions in the Middle East, and drone attacks on Russian refineries.

Brent crude futures for August delivery rose by 0.9% to $86.04 a barrel, while US crude gained 1.1% to $81.63 per barrel.

“The chief underlying reason behind the price strength … is the growing confidence that global oil inventories will inevitably plunge during the summer in the northern hemisphere,” said Tamas Varga of oil broker PVM, referring to seasonal demand for oil products.