Tanzania launches $273 million petroleum storage expansion shields against Strait of Hormuz disruption

Tanzanian President Samia Suluhu Hassan has officially broken ground on a $273 million expansion of petroleum storage at the port of Dar es Salaam, marking a strategic investment in national and regional energy security amid rising global supply risks.

The Tsh701.8 billion ($273 million) project, launched in 2024, will see the construction of 15 new storage tanks with a combined capacity of 378,000 cubic metres, enabling the Tanzania Ports Authority (TPA) to hold its own fuel reserves for the first time. Construction is already 41% complete, with full operational readiness expected by February 2027.

Strengthening port efficiency and reducing costs
The expansion is set to enhance the port’s petroleum handling capabilities, cutting tanker unloading times from 22 days to just seven days. This efficiency will eliminate costly demurrage fees, estimated at $25,000 per delayed ship, currently passed on to consumers, while ensuring households and businesses have a more reliable fuel supply.

“The project is part of the Port Master Plan to improve competitiveness, operational efficiency, and the sector’s contribution to the national economy, while reinforcing Dar es Salaam as a regional energy gateway,” said Plasduce Mbossa, Director General of TPA.

Strategic buffer against geopolitical risks
The initiative comes amid heightened global energy tensions, including Iran’s closure of the Strait of Hormuz, a key route accounting for nearly 20% of daily global oil shipments, and threats from Houthi-aligned groups in the Red Sea. 

Once completed, the port’s oil receiving capacity will rise from 1,051,888.52 cubic metres to 1,429,888.52 cubic metres, a 35.9% increase, providing a critical buffer against potential supply shocks.

Tanzania’s modest crude reserves, around 57 million barrels, and limited domestic refining capacity make strategic storage a faster, lower-risk solution than large-scale local refineries.

Modernizing Tanzania’s energy infrastructure
The project reflects Tanzania’s broader agenda to modernize the port of Dar es Salaam, enhance operational efficiency, and strengthen its position as a regional energy hub. 

By combining capacity expansion with operational optimization, the initiative positions the country to better manage global market disruptions and meet growing domestic demand.