Dangote Petroleum Refinery is reducing its crude oil imports from the United States, opting to process more Nigerian oil, according to a report by Bloomberg.
The report reveals that in the third quarter, the refinery, with a capacity of 650,000 barrels per day, plans to source just over 80% of its crude from domestic sources. This marks an increase from less than 75% in the previous quarter, as indicated by tanker-tracking data and information from traders.
Last month, oil prices were under pressure due to reports that the refinery intended to resell some of the US barrels it had previously purchased, highlighting Dangote’s significant influence in the Atlantic basin petroleum markets.
By reducing overseas crude purchases, the refinery could potentially increase competition for US export barrels in other markets. This shift may intensify in the coming months.
While the exact volume of crude to be traded under this system is uncertain, if the 450,000 barrels allocated for local consumption are exhausted, Dangote may not need to import any overseas crude.
Since December, the $20 billion Dangote refinery in Lekki, Lagos, has processed over 56 million barrels of crude during its test runs and gradual ramp-up, with 78% sourced locally.
For next month, the refinery received six cargoes of crude directly from the Nigerian National Petroleum Company Limited (NNPC), according to a company spokesman who spoke to Bloomberg earlier this month.
Most Nigerian cargoes consist of about one million barrels each. Additionally, two more shipments from Nigeria and two million barrels of WTI Midland crude are expected to arrive in September, according to tanker-tracking data.
Over the six months ending in September, the refinery will have processed an average of almost 10 million barrels per month.
While there were expectations for increased inflows of American feedstock earlier this summer, the refinery has resold some of the US barrels initially purchased for this month and next—a claim it denied in late July.
Moreover, it canceled two tenders for purchasing an additional 6 million barrels of American crude for September, according to traders.
These changes could also result in fewer Nigerian barrels being available for sale in Europe and Asia. Dangote’s petrol is expected to enter the market by September.
