Dangote Refinery, Africa’s largest oil refinery owned by Aliko Dangote, has initiated plans to import crude oil from the United States.
The refinery, set to become the continent’s largest, recently finalized a deal to purchase 2 million barrels of WTI Midland crude for delivery by the end of February.
Traditionally reliant on domestic crude supplies, Dangote Refinery’s decision to venture into the American market underscores the changing dynamics of the global oil trade.
The move represents a departure from Nigeria’s usual practice of sourcing crude from within its borders, highlighting the increasing competitiveness of US oil on the global stage.
The new refinery, boasting a capacity of 650,000 barrels per day, commenced operations earlier this month. While it initially targeted processing 350,000 barrels daily, it aims to scale up to its full capacity gradually.
This purchase from the US signifies a notable shift for the Nigerian economy, heavily dependent on revenue from petroleum exports.
The decision reflects both the refinery’s desire for diversification and the changing landscape of global oil markets.
Although the exact reasons behind the refinery’s decision remain undisclosed, experts suggest that cost considerations may have played a significant role.
West Texas Intermediate Midland crude often trades at a lower price compared to Nigerian grades like Bonny Light, potentially offering cost-saving opportunities for Dangote Refinery.
The refinery’s move to incorporate US crude into its operations aligns with its broader strategy of flexibility in sourcing feedstock, which includes African crudes and supplies from other global regions such as Saudi Arabia.
As Dangote Refinery ventures beyond its traditional supply sources, it signals a new chapter in Nigeria’s oil refining sector, one marked by adaptability and international market integration.
