The newly operational $20 billion Dangote Refinery, Africa’s largest oil refinery, has reached a landmark deal to import 2 million barrels of US crude oil from Texas-based supplier Trafigura Group. The crude shipment, scheduled to arrive by the end of February 2024, marks the first time the refinery will process non-Nigerian oil.
This purchase highlights the Dangote Refinery’s expanding global supply chain and demonstrates the growing influence of American shale oil worldwide. As US oil production has boomed over the past decade, exports to new regions like Asia and now Africa continue to reshape international energy markets.
With a capacity of 650,000 barrels per day, the Dangote Refinery aims to gradually increase daily production towards full capacity after commencing operations earlier this month at an initial 350,000 barrel rate. Though the massive refining complex was designed to process domestic Nigerian crude mainly, the refinery continues to make efforts to diversify its supply base.
“We have established a flexible supply infrastructure that allows us to take advantage of the most competitively priced crudes worldwide,” said Devakumar Edwin, Dangote’s Executive Director. “This first US shipment ushers in a new era of connectivity with North American oil markets.”
The refinery’s trading unit recently received its first shipments, including five Nigerian crude grades: Agbami, Amenam, Bonny Light, and CJ Blend, among others. Operations appeared set to formally launch after receiving a final one million barrel cargo of Agbami grade a few weeks ago, completing an initial six million barrel stockpile target.
As Nigeria’s economy relies heavily on oil exports, industry analysts will watch closely to see how the launch of Africa’s largest refinery impacts global trade flows. “The Dangote Refinery has the potential to transform Nigeria from a major crude exporter into a net refined product exporter,” said Bloomberg analyst Bill Smith.