By Sopuruchi Onwuka

Expectations that Nigeria and other African oil and gas producers would benefit from rising global energy prices are facing a reality check. Capacity limits and delayed projects are holding back the gains many had predicted.

Ad >>>

The ongoing supply disruptions tied to tensions in the Middle East, especially around the Strait of Hormuz, have pushed energy prices higher. In theory, this should create an opening for African producers to step in. But in practice, the region is not yet ready to fill that gap.

Some analysts believe the crisis could still act as a catalyst. Long-delayed infrastructure projects, such as the Trans-Saharan gas pipeline linking Nigeria to Europe through Niger and Algeria, may gain renewed urgency. There is also optimism that Nigeria could increase output from underperforming oil fields recently transferred from international oil companies to local operators.

Early signs from independent producers are encouraging. Companies like Seplat, Platform Petroleum, Sterling Oil, and Heirs Energies have reported improved production after returning to previously inactive fields and applying enhanced recovery techniques.

Nigeria is also well positioned in the liquefied natural gas (LNG) market. As global gas shortages intensify, demand for spot cargoes is rising, and Nigerian exports could benefit from higher prices.

Beyond immediate supply gaps, some analysts see a longer-term shift underway. Buyers in Europe and Asia are increasingly viewing African producers as more stable alternatives to the Middle East, where geopolitical risks continue to threaten supply routes. African exports often come with lower insurance costs and more predictable delivery timelines.

Projections from the African Energy Chamber suggest that the continent’s LNG export capacity could more than double by 2040. That growth could provide a critical revenue stream, especially as oil production gradually declines in some countries.

However, serious challenges remain. Security risks, political instability, and logistical constraints continue to weigh on the sector. In Nigeria and across Africa, these issues have already delayed or stalled major projects.

For example, insecurity has disrupted LNG developments in countries like Mozambique, Guinea, and Angola. Closer to home, instability in the Sahel region casts uncertainty over key pipeline plans, including the Trans-Saharan project and the proposed Nigeria-Morocco coastal pipeline.

So far, only a few export channels have proven reliable. Nigeria’s LNG shipments have continued without major disruption, and the West African Gas Pipeline has operated steadily for years. But most new gas export projects are still struggling to get off the ground.

This gap between potential and reality is becoming more obvious. While global analysts point to Africa as a replacement for Middle Eastern supply, traders on the ground see limited immediate alternatives.

As risk analyst Clementine Wallop of Horizon Engage notes, Africa may be a logical option, but it is not a quick fix. Security concerns, political uncertainty, and infrastructure limitations mean the continent cannot rapidly replace disrupted supplies in the global market.