One Third of Dangote Refinery Crude Purchased from US – Report
Nigeria, Africa’s leading producer of crude oil, has increased its imports of U.S. WTI crude due to the Dangote Oil Refinery’s growing appetite for the hydrocarbon, according to a Bloomberg report.
The refinery, which is Africa’s largest and one of the world’s most significant crude processing facilities, has an installed capacity of 650,000 barrels per day.
The refinery is owned by Aliko Dangote, Africa’s richest man, with an estimated net worth of about $28 billion.
According to Bloomberg’s ship-tracking data, the Dangote Refinery, located near Nigeria’s commercial capital, has purchased about a third of its crude from the United States, primarily the West Texas Intermediate (WTI) Midland grade.
This proportion has nearly doubled since 2024, the year the refinery began ramping up operations.
Analysts attribute the increased procurement of American crude to a combination of strategic and operational factors, according to Bloomberg.
The report indicated that OPEC member nations have found it difficult to economically scale up crude supply amid global competition.
However, this dynamic has allowed the 650,000-bpd refinery to acquire more stored U.S. crude, particularly WTI, as it moves closer to full operational capacity.
Another reason for Dangote’s preference is WTI’s higher yield of gasoline and refined products, the report added.
Additionally, parts of the Asian market for WTI crude contracted this year due to the ongoing U.S.-China trade tensions, increasing the availability of American crude for other regions, including West Africa.
The increased intake of U.S. crude also comes amid a decline in the availability of Nigerian crude.
Bloomberg research shows that U.S. crude is expected to make up a larger portion of Dangote’s imports in June compared to the domestic supply.
The Dangote refinery began producing fuel in 2024. Diesel and naphtha production commenced in January, followed by gasoline in September.
The use of U.S. oil aligns with the refinery’s increasing processing levels and the drop in available Nigerian crude for purchase.
Recall that the refinery plans to reach its 650,000 barrels per day capacity in June this year.
However, low local crude supply has been limiting the refinery’s capacity to meet its production target amidst plans to ramp up daily production.
Already, the refinery has lined up imports of at least five million barrels of U.S. West Texas Intermediate (WTI) crude oil for delivery in July, building on what may become a record month of WTI intake in June.
A recent Reuters report further indicated that the refinery awarded tenders for the purchase of around 161,000 barrels per day (bpd) of U.S. crude to be delivered in July.
This follows earlier deals for June cargoes amounting to roughly 300,000 bpd — the largest volume of WTI ever booked by the refinery in a single month.
SOURCE: Daily Trust