Botswana Oil Limited received its first direct shipment of roughly 20 million litres of diesel from Oman's OQ Trading in late October 2026, a step the state-owned company says will give it greater control over fuel procurement and reduce its reliance on South African intermediaries.
Letshego Moeng, Chief Strategy and Sustainability Officer at Botswana Oil, told The Business Weekly & Review that the shipment marked the company's first direct-from-source fuel supply arrangement. He declined to disclose the contractual terms, describing the oil industry as commercially sensitive.
What the Oman agreement covers
The shipment sits within a broader energy cooperation framework between Gaborone and Muscat. In November 2025, Botswana Oil and OQ Trading signed an investment cooperation agreement covering technical, commercial and regulatory cooperation, including the evaluation of petroleum supply arrangements. A separate agreement with OQ Group addressed energy infrastructure and potential storage solutions.
In April 2026, the two sides advanced talks on an integrated petroleum supply and storage platform combining coastal import facilities with inland strategic reserves. Botswana Oil has not disclosed the duration of the supply arrangement but says it intends to keep ordering vessels from OQ Trading on a continuous basis.
Moeng said the arrangement gives the company predictability.
That gives us the reliability to ensure that we know when the product is coming in. We have more control over the product.
Does direct sourcing from Oman actually save money?
That is the question industry players are asking. Refined petroleum is priced against international benchmarks, so Botswana remains exposed to global price movements no matter where it buys. The potential savings lie in cutting intermediary margins, coastal storage charges and handling fees charged by South African oil companies, and in negotiating better supplier premiums through bulk purchases.
Stephen Lecha, an energy analyst at Lecha Group, said the bilateral framework could deliver structural advantages.
While global oil prices are linked to international benchmarks, this direct bilateral framework bypasses the profit-skimming regional oil marketing intermediaries.
Lecha said the deal shifts Botswana from a passive buyer dependent on SADC-based intermediaries to a proactive infrastructure co-developer on key SADC trade routes. He estimates that physical transport routes account for 15 to 30 percent of the total landed cost of fuel in a landlocked country such as Botswana, depending on international prices and transport efficiency.
The arithmetic is straightforward. Direct procurement must save more than the additional ocean freight, port handling and inland distribution from regional coastal gateways cost. Port delays attract demurrage charges, and inefficient inland transport can erode savings quickly. Any commercial advantage will depend on the supply terms negotiated and the efficiency of the delivery chain.
Strait of Hormuz risk hangs over the route
The new route also carries a geopolitical exposure that South African supply lines never did: the Strait of Hormuz. The chokepoint sits at the centre of the current conflict between Iran and the United States. According to ABC News, the United States is enforcing a naval blockade of Iran's Persian Gulf and Gulf of Oman ports, while Iran claims control over the strait and continues to attack shipping transiting the waterway. EnergyNow reports that Iran is drafting a protocol with Oman to monitor traffic through the strait, which has been largely blocked since the conflict began.
Fuel moving from Oman through Namibia or Mozambique and then across borders into Botswana will also require tight coordination of customs procedures, cross-border regulations and road freight infrastructure. Any bottleneck along that chain could undermine both the cost and reliability case for direct procurement.
Why Botswana moved away from South African suppliers
For decades, Botswana sourced almost all its fuel from South Africa, mainly through locally incorporated subsidiaries of international oil companies drawing on South African refineries. A position paper by an oil industry association said those companies relied on five South African supply hubs, with most fuel entering Botswana by road tanker.
That dependence carried real risks: ageing refineries, inadequate investment in new capacity, port and rail congestion, and plans by international oil companies to downsize or exit Southern Africa altogether. The government responded by creating Botswana Oil as a state-owned enterprise and, in April 2024, introducing an import mandate assigning the company responsibility for 90 percent of fuel imports, with the remaining 10 percent reserved for citizen-owned oil companies.
The Oil Industry Association has argued the mandate backfired on supply diversity. With international oil companies excluded from direct importation, the number of South African supply hubs available to Botswana fell from five to one, leaving reliance on Sasol's Natref refinery and its loading infrastructure as a single point of failure.
Supply shortfalls raise the stakes for BOL
The Oman deal arrives as Botswana Oil faces scrutiny over its performance under the mandate. International oil companies have reported recurring supply shortfalls, and industry figures indicate BOL supplied about 70 percent of the volumes nominated by those companies in September 2026, leaving a 30 percent gap. Petrol imports that month were 27 percent below the average monthly volume recorded between January and August 2026.
The constraints forced some companies to truck fuel from northern Botswana to the south when products were unavailable at their usual supply points. Industry representatives say this pushed transportation costs to as much as four times the normal cost per load. Companies estimate BOL fell short of nominated volumes by about 20 percent cumulatively during the first year of the mandate.
Kwa Nokeng, Botswana's second-largest fuel importer and largest citizen-controlled petroleum distributor, said its licence allows it to import from regional suppliers in South Africa, Namibia and Mozambique, and that its procurement is designed to keep product available at its commercial depots and supply its business-to-business and mining customers reliably.
The oil industry association has argued that alternative routes increase procurement costs not fully covered under the existing fuel-pricing framework, and that these costs are recovered through claims to the National Petroleum Fund. In other words, the public purse absorbs the difference.
What must happen next
Lecha argues the longer-term benefits depend on infrastructure.
There is a critical need to commission coastal storage capacity, refined fuel pipelines, and ensure a balanced and sustainable energy mix, not only in Botswana, but in the whole of the SADC region.
For a country that has spent decades at the mercy of its neighbour's ageing refineries, taking control of its own fuel supply is the right instinct. Sovereignty over strategic resources is a principle worth defending. But principle must survive contact with the ledger. If the Omani route costs more, delays at ports, or runs through a strait that Iran and the United States are fighting over, the deal will be judged at the pump and at the National Petroleum Fund, not in press releases.
Frequently asked questions
How much diesel did Botswana receive from Oman?
Botswana Oil's first direct shipment from OQ Trading carried approximately 20 million litres of diesel, delivered under the arrangement announced in late October 2026.
What share of Botswana's fuel imports does Botswana Oil control?
Under the April 2024 import mandate, Botswana Oil is responsible for 90 percent of fuel imports, with the remaining 10 percent reserved for citizen-owned oil companies.
Why is the Strait of Hormuz a risk for Botswana's fuel supply?
Shipping from Oman must transit the strait, where the conflict between Iran and the United States has largely blocked traffic and produced ongoing attacks on commercial vessels.