Nigeria’s Dangote mega-refinery has significantly increased its use of domestic oil, cutting back on imports from the United States. According to Bloomberg data, the refinery will source over 80% of its crude from Nigeria in the third quarter of 2024, up from less than 75% in the previous quarter. This shift comes as the refinery prepares to resell some of the US crude it had previously purchased, which has impacted oil prices globally.
From October, the Nigerian government will implement a system allowing Dangote to purchase crude in local currency. This could involve up to 445,000 barrels of Nigerian crude daily, further reducing the need for overseas imports.
Since December 2023, Dangote Refinery has taken in over 56 million barrels of crude, with 78% sourced locally. The refinery’s increased reliance on Nigerian crude may affect global markets, leaving fewer Nigerian barrels available for Europe and Asia.
Despite these developments, inflows of US crude had been expected to increase earlier this year. However, the refinery has since scrapped tenders for further US crude and begun reselling purchased American barrels.
With the refinery averaging nearly 10 million barrels per month through September, it is clear that Dangote is rapidly becoming a dominant player in Nigeria’s oil industry and global petroleum markets.
