Iran war: South Africa, others turn to Dangote Refinery amid global fuel supply strain

African countries, including South Africa, are increasingly turning to the Dangote Refinery owned by Aliko Dangote as global fuel supply tightens following the ongoing Iran war.

The refinery has recorded a surge in inquiries from multiple countries seeking alternative fuel sources after disruptions linked to the conflict between the United States, Israel and Iran.

According to sources familiar with the development, South Africa is currently exploring a 12-month fuel supply agreement with Nigeria, as part of efforts to stabilise its energy needs. Other African nations, including Ghana and Kenya, have also reportedly made similar approaches.

The growing interest underscores the widening impact of the Middle East crisis on global energy markets, with supply shortages already being felt across regions. In Africa, the situation is particularly severe, as about 75 per cent of refined fuel imports in eastern and southern parts of the continent originate from the Middle East.

South Africa’s government confirmed it is working with industry stakeholders to diversify its crude oil and refined product sources, noting that a comprehensive plan is in place to manage potential supply risks.

Despite the rising demand, about 75 per cent of the refinery’s 650,000 barrels-per-day output is reserved for domestic consumption in Nigeria, leaving a smaller portion available for export.

Speaking on the situation, Dangote said availability of fuel has become the primary concern amid the crisis.

“Right now it is not about pricing, it’s about availability. I think the situation will continue for a while,” he said.

Across the continent, governments are taking precautionary measures. Ethiopia has directed fuel stations to prioritise public transport and encouraged energy conservation, while fuel prices in Somalia’s capital, Mogadishu, have nearly doubled.

The crisis has also exposed structural weaknesses in Africa’s energy sector, including limited refining capacity and inadequate fuel reserves. Unlike members of the International Energy Agency, which recommends at least 90 days of oil reserves, African countries generally lack sufficient stockpiles to cushion supply shocks.

Industry players warn that rising freight and insurance costs, coupled with supply disruptions, could further strain fuel availability in the coming weeks, as countries scramble to secure alternative sources.