Dangote Refinery Sources US Crude, Ramps Up Production

The Dangote Petroleum Refinery has made significant strides in ramping up production by leveraging cheaper crude imports from the United States, according to a recent report by Bloomberg.

This development has allowed the 650,000 barrels per day refinery to ship products in recent weeks while preparing two units to enable gasoline (petrol) output, which is expected to transform the fuel market both in Nigeria and the region.

As part of its sourcing strategy, the refinery has been importing as much as a third of its oil from US grade WTI Midland, a move that is likely to continue as long as the foreign oil remains more cost-effective than local supplies.

This approach is expected to have a significant impact on product markets in the region, particularly on gasoline and diesel.

In addition to sourcing crude from the US, Nigeria has also released new rules that will require its oil producers to sell crude to domestic refineries.

The aim is to reduce the country’s reliance on imported refined products.

However, it remains to be seen how much each refinery will need to take under these new regulations.

The Dangote Refinery’s successful ramp-up in production and its strategic sourcing of crude from the US has positioned it to have a significant impact on the Atlantic Basin gasoline markets, according to analysts at Wood Mackenzie and FGE.

As the refinery continues to increase its production capacity, it is expected to further influence the regional fuel market and potentially reshape the West African gasoline supply balance.

This development highlights the growing importance of the Dangote Refinery in the global oil and gas industry and its role in transforming the energy landscape in Nigeria and beyond.