Dangote Refinery has reportedly entered into an agreement with Trafigura Group, a United States-based oil trader, to procure two million barrels of West Texas Intermediate (WTI) Midland for delivery in February.
According to traders familiar with the matter, Trafigura Group has finalized the sale of two million barrels of WTI Midland to Dangote Refinery, marking a significant departure for the refinery, which has traditionally relied on Nigerian crude. The delivery is expected to be completed by the end of February, serving as the refinery’s first-ever purchase of non-Nigerian crude.
This move highlights the growing competitiveness of American crude oil in the global market. Over the past decade, the exponential growth in US oil supply has reshaped the dynamics of the global market, extending its influence to regions such as Asia. Nigeria, heavily dependent on petroleum exports, finds itself impacted by these transatlantic shifts.
Dangote Refinery, with a capacity of 650,000 barrels per day, recently commenced operations, producing diesel and aviation fuel. Although the refinery primarily sources domestic crude through a supply agreement with the trading arm of the Nigerian National Petroleum Company Limited (NNPCL), it has shown a willingness to diversify its feedstock.
While Dangote Refinery has received one million barrels each of Nigeria’s crude from Shell International Trading and Shipping Company Limited (STASCO) and the NNPCL, this latest move to import two million barrels of US crude signals the facility’s flexibility to process various African crudes and those from distant sources like the US and Saudi Arabia.
As of the time of reporting, Dangote Group is yet to officially confirm the two million barrels of crude import from Trafigura. The refinery, which began production earlier this month, is expected to gradually increase its processing rate towards its full capacity of 650,000 barrels per day.
This strategic decision to diversify feedstock sources aligns with Dangote Refinery’s vision for increased operational flexibility and resilience in the dynamic global oil market.
