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Dangote Refinery Resumes U.S. Crude Oil Imports

Published

1 month ago

Nov 21, 2024.

The Dangote Petroleum Refinery has resumed purchasing crude oil from the United States, marking a significant step in its efforts to boost production and refine capacity. This follows a three-month pause in foreign crude imports as the refinery prioritized domestic supplies.

Bloomberg reports that a shipment of two million barrels of WTI Midland crude from Chevron Corp. is set to arrive at the refinery in December.

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EKO HOT BLOG reports that this development raises questions about the Federal Government’s naira-for-crude initiative and the adequacy of crude supplied by the Nigerian National Petroleum Company Limited (NNPCL).

Earlier agreements indicated that the NNPCL would provide up to 400,000 barrels daily to the refinery, paid for in naira instead of dollars.

However, imports from the U.S. and Nigeria decreased around August, suggesting potential challenges in sustaining domestic supply commitments.

Chevron has reportedly booked the supertanker Azure Nova to load crude from the U.S. Gulf by December 5. Previously, the refinery received one or two shipments of U.S. crude monthly alongside local supplies, but resumed U.S. imports might be influenced by lower shipping costs, making American oil more affordable in Europe and West Africa.

Dangote U.S. Crude Oil Imports

The refinery’s growing role in global oil markets is altering the competitive landscape, challenging traditional buyers in Europe.

Meanwhile, Aliko Dangote, Chairman of the Dangote Group, is actively engaging lenders, development banks, and oil traders to secure billions of dollars for crude oil purchases necessary to maximize the refinery’s capacity.

Notably, the refinery has started exporting refined petroleum products to West African countries, signaling its potential to reshape regional fuel markets. With a minimum supply need of 300,000 barrels per day, Dangote Refinery remains pivotal to advancing Nigeria’s energy sector and global oil trade.