Dangote Refinery to Purchase 24 Million Barrels of US Crude Oil

The US will supply 24 million barrels of crude oil to the Dangote Petroleum Refinery.

According to reports, the Dangote petroleum refinery located in Lagos State intends to increase its processing capacity by acquiring a minimum of 24 million barrels of US crude oil annually.

Founded by the wealthiest man in Africa, Aliko Dangote, this $20 billion refinery has launched a contract tender to purchase two million barrels of West Texas Intermediate Midland crude every month for a year, starting in July.

Over the course of a year, this procurement will result in the delivery of 24 million barrels of West Texas Intermediate Midland crude. The fact that a refinery in the top oil-producing nation in Africa is looking for foreign oil shows how important a role the facility will play in the world's crude and fuel markets. It will be Africa's largest refinery when it is completely operating.

The deadline for the tender is May 21. According to observations from a merchant specializing in West African crude, this tendering process highlights the difficulties Nigerian crude oil faces in competing with American supplies.

The Organization of Petroleum Exporting Countries, or OPEC, quota, and domestic supply demands of the refinery are difficult for Nigeria to meet, even though the country is one of Africa's top producers of crude oil. As a result, the refinery has chosen to increase its production capacity by obtaining up to one-third of its feedstock from the US, namely the US-grade WTI Midland.

This tendency is anticipated to continue, according to FGE's Ronan Hodgson, an energy analyst, since imported oil continues to be more affordable than domestic sources. Furthermore, Hodgson stated that the refinery's units that improve the quality of the diesel are scheduled to start up in the upcoming months.

“The refinery is already having a sizable impact on product markets even running in its most stripped-back form at minimum rates,” Hodgson said.