Dangote Refinery has diversified its crude oil sources by importing 2 million barrels of WTI Midland from the US, signaling a significant shift in the global market dynamics. Reports from Bloomberg indicate that Trafigura Group facilitated the sale, with delivery scheduled by the end of February. This marks a historic move for the refinery as it ventures beyond Nigerian crude for the first time.
The surge in US oil supply over the past decade has reshaped global markets, making American barrels increasingly competitive. This move by Dangote Refinery underscores the broader impact of transatlantic deliveries on nations like Nigeria, whose economy is heavily reliant on petroleum exports.
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The newly operational 650,000 barrel-per-day refinery, which started operations earlier this month, initially targeted processing 350,000 barrels per day and aims to gradually increase production to its full capacity. While it primarily relies on domestic crude through an agreement with the state-owned NNPCL trading arm, recent shipments included Nigeria’s Agbami crude, facilitated by a Shell trading unit. The refinery, in addition to handling domestic feedstock, is now equipped to process various African crudes and supplies from distant sources such as the US and Saudi Arabia, as revealed by the Dangote Group.
Nigeria has faced challenges in crude oil production due to issues like crude oil theft, divestment from oil majors, and insecurity in the Niger Delta, resulting in a failure to meet its OPEC production quota of 1.75 million barrels per day for 2023. This shortfall has prompted OPEC to cut Nigeria’s production quota for 2024. The Dangote Refinery’s decision to diversify its crude sources may stem from the need for consistent supply amid Nigeria’s unpredictable crude oil production levels. This move positions the refinery to navigate global market dynamics and ensures a stable supply of crude for its operations.
