By Babatunde Taiwo (SIWES Student, Kwara Polytechnic)
The Dangote Refinery is reducing its crude oil imports from the United States and shifting towards greater reliance on Nigerian oil, according to a Bloomberg report.
The report notes that the 650,000-barrel-per-day refinery plans to source over 80% of its crude from local suppliers in the third quarter, up from less than 75% in the previous quarter, based on tanker tracking data and information from traders.
Last month, oil prices were pressured downwards after reports suggested the refinery intended to resell some of the US barrels it had purchased earlier, underscoring Dangote’s growing influence in the Atlantic basin oil markets.
This shift in crude sourcing could increase the availability of US export barrels looking for buyers elsewhere.
While it remains unclear how much of the US supply will be redirected, once the 450,000 barrels designated for local use are consumed, Dangote’s need for foreign crude may significantly diminish.
The $20 billion Dangote Refinery in Lekki, Lagos, has received over 56 million barrels of crude since December as it completed test runs and ramped up processing. Of this, 78% has been sourced locally.
The refinery secured six shipments of crude directly from the Nigerian National Petroleum Company Limited for the upcoming month, according to a company representative who spoke to Bloomberg earlier this month.
Nigerian cargoes typically consist of around one million barrels each. Additionally, two more shipments from Nigeria and two million barrels of WTI Midland are expected to arrive in September, according to tanker tracking data.
On average, the refinery will have received nearly 10 million barrels per month over the six months leading up to September.
While earlier in the summer, anticipated inflows of American feedstock were expected to rise substantially, the refinery denied reports in late July that it was reselling some of the US barrels purchased for this month and next.
Moreover, the refinery canceled two bids seeking to acquire an additional 6 million barrels of American crude for September, as reported by traders.
