The Dangote Petroleum Refinery is capitalizing on the availability of cheaper oil imports from the United States.

Recent reports indicate that the refinery with a capacity of 650,000 barrels per day has begun leveraging US-grade oil to power its operations in Nigeria.

According to insights from industry analysts, the refinery has commenced shipping various products, including jet fuel, gasoil, and naphtha, as it gradually ramps up its production capacity.

The utilization of US oil imports, particularly the WTI Midland grade, has provided Dangote Refinery with a cost-effective solution for its feedstock requirements.

Experts anticipate that the refinery’s gasoline-focused units, expected to come online in the summer months will further bolster its influence in the Atlantic Basin gasoline markets.

Alan Gelder, Vice President of Refining, Chemicals, and Oil Markets at Wood Mackenzie, noted that Dangote’s entry into the gasoline market is poised to reshape the West African gasoline supply dynamics.

Despite operating at approximately half its nameplate capacity, Dangote Refinery’s impact on regional fuel markets is already being felt. The refinery’s recent announcement of a reduction in diesel prices from N1,200/litre to N1,000/litre has generated excitement within Nigeria’s downstream oil sector.

This move is expected to positively affect various sectors of the economy and contribute to reducing the country’s high inflation rate.

Furthermore, the refinery’s utilization of US oil imports shows its commitment to exploring cost-effective solutions while striving to meet Nigeria’s domestic fuel demand. As the refinery continues to optimize its production processes, it is poised to play a pivotal role in Nigeria’s energy landscape and contribute to the country’s quest for self-sufficiency in refined petroleum products.

Moreover, the Nigerian government’s recent directive to compel oil producers to prioritize domestic refineries for crude supply aligns with Dangote Refinery’s objectives of reducing reliance on imported refined products.

With the flexibility to purchase crude using either the local currency or the US dollar, the refinery is well-positioned to capitalize on these policy reforms and further enhance its operational efficiency.

As geopolitical tensions between Israel and Iran escalate, investors are seeking refuge in traditional safe-haven assets, particularly bonds, while crude oil prices surge on fears of supply disruptions.

The latest developments in the Middle East have sparked a rush to secure assets perceived as less risky amidst growing uncertainty.

With crude oil trading just over 1% higher, having given up earlier gains of as much as 4.2%, investors are closely monitoring the situation for any signs of real supply disruptions.

While there is currently no evidence of such disruptions, concerns persist that any escalation in tensions could affect oil flows through critical chokepoints like the Strait of Hormuz or lead to renewed attacks on ships in the Red Sea by Iran-backed Houthi rebels.

Edward Bell, head of market economics at Emirates NBD PJSC in Dubai, said it is important to assess whether there have been any tangible impacts on the physical supply or shipment of oil products, indicating that if the answer is negative, the premium may need to be recalibrated.

Meanwhile, Oman’s foreign ministry issued a statement condemning what it termed Israel’s repeated military attacks in the region in response to the blasts in Iran. This is the first reaction from Gulf Arab states to the reported Israeli strike on Iran.

The ministry also called for international efforts to focus on achieving a ceasefire in Gaza, where Israel is engaged in conflict with Iranian-backed Hamas, and to seek a resolution to the Palestinian issue.

Ziad Daoud, Bloomberg Economics’ Chief Emerging Markets Economist, argued that the ball is now in Iran’s court, with its next actions likely to determine the broader economic impact of the situation.

In the financial markets, bonds are emerging as the preferred haven for investors seeking safety amid the heightened tensions.

Bunds in Europe, together with Treasuries in the US, are expected to rally, reflecting investor appetite for low-risk assets.

Crude oil prices are also benefitting from the uncertainty, driven primarily by concerns over potential supply disruptions.

As investors navigate the evolving situation, the search for safe-haven assets underscores the cautious sentiment prevailing in global markets.

The geopolitical dynamics in the Middle East continue to shape investor behavior, with a keen focus on developments that could impact global economic stability.

Oil prices extended their decline for the third consecutive day on Wednesday as concerns over weaker economic data and increasing commercial inventories in the United States weighed on oil outlook.

Brent oil, against which Nigerian oil is priced, dropped by 51 cents to $89.51 per barrel, while U.S. West Texas Intermediate crude oil fell by 41 cents to $84.95 a barrel.

The softening of oil prices this week reflects the impact of economic headwinds on global demand, dampening the gains typically seen from geopolitical tensions.

Market observers are closely monitoring how Israel might respond to Iran’s recent attack, though analysts suggest that this event may not significantly affect Iran’s oil exports.

John Evans, an oil broker at PVM, remarked on the situation, noting that oil prices are readjusting after factoring in a “war premium” and facing setbacks in hopes for interest rate cuts.

The anticipation for interest rate cuts received a blow as top U.S. Federal Reserve officials, including Chair Jerome Powell, refrained from providing guidance on the timing of such cuts. This dashed investors’ expectations for significant reductions in borrowing costs this year.

Similarly, Britain’s slower-than-expected inflation rate in March hinted at a delay in the Bank of England’s rate cut, while inflation across the euro zone suggested a potential rate cut by the European Central Bank in June.

Meanwhile, concerns about U.S. crude inventories persist, with a Reuters poll indicating a rise of about 1.4 million barrels last week. Official data from the Energy Information Administration is awaited, scheduled for release on Wednesday.

Adding to the mix, Tengizchevroil announced plans for maintenance at one of six production trains at the Tengiz oilfield in Kazakhstan in May, further influencing market sentiment.

As the oil market navigates through a landscape of economic indicators and geopolitical events, investors remain vigilant for cues that could dictate future price movements.