Dangote Defies Regulators, Resells US Crude Oil

Dangote diverts US crude oil shipments amid regulatory row...

Dangote's refinery, despite reported technical issues, is operational and poised to transform Nigeria into a fuel exporter, impacting the Europe-to-Africa fuel trade, as it resells crude oil shipments due to technical adjustments, not operational issues, according to a company executive.

According to three sources, Dangote's reselling of crude oil shipments from the US was due to technical issues at the refinery. However, a Dangote executive clarified that the Crude Distillation Unit (CDU) is operational, despite rumors of problems.

The refinery, which began production in January, is poised to become the largest in Africa and Europe once it reaches full capacity. This could significantly impact the lucrative Europe-to-Africa fuel trade, potentially transforming Nigeria into a fuel exporter.

Sources revealed that cargoes of Nigerian Escravos and Forcados crude, as well as US WTI Midland crude, were being offered for resale. Traders noted that the plant has been importing multiple crude shipments monthly, indicating ongoing activity despite the reported technical issues.

Refinery resales of crude oil are rare, but not unprecedented, according to traders. The news of Dangote's resales sparked a decline in crude prices on Friday, with Brent crude falling as much as 2.5% to near $80 a barrel before recovering to above $81 by 1700 GMT.

The Dangote refinery, a $20 billion project built by Africa's richest man, Aliko Dangote, has a capacity to process 650,000 barrels per day. Despite Nigeria being Africa's largest oil producer, Dangote aims to reduce the country's reliance on fuel imports through this massive investment.