Categories: News

Dangote Refinery’s Products To Disrupt Europe’s Oil, Gas Industry – OPEC

Petroleum supplies from
Nigeria-based world’s largest single-train Dangote Refinery and Petrochemicals will put pressure on the performance of Europe’s oil industry, especially the Northwest Europe Gasoil.

This was disclosed by the Organisation of Petroleum Exporting Countries (OPEC) in its newly released monthly Oil Market Report for June 2024.

The revelation came amidst the crisis rocking the Dangote Oil Refinery in Nigeria.

Dangote Group on Friday engaged in an exchange of words with the Nigerian Upstream Petroleum Regulatory Commission.

The company had earlier on Thursday, accused the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) of failing to enforce the Domestic Crude Supply Obligations effectively.

It noted it is yet to get enough crude locally.

But the NUPRC debunked the claim on Friday, explaining that it facilitated the supply of over 29 million barrels of crude oil to Dangote Refinery from January to June 2024.

However, in a swift response, the Dangote Refinery said it did not receive any 29mb of crude.

Meanwhile, OPEC in the report listed Dangote Refinery among the top Diesel and jet Fuel suppliers that will disrupt Europe’s oil & gas Industry, a development experts forecasted will positively impact the Nigerian economy.

According to the Gazette, Standard & Poor Global quoting trading and the ship tracking sources had earlier predicted that Nigeria’s $20 billion Dangote refinery would shake up international crude flows when it reaches full capacity.

READ ALSO: Demarketing Dangote Refinery By Vested Interests Will Do Nigeria No Good – Northern Elders

Dangote has already made an impact since coming online in January, according to a data of trading sources and ship tracking.

The OPEC report revealed that, “Upside potential for higher production levels from Nigeria’s Dangote refinery, coupled with strong flows from the Middle East and new supplies from the Mexican Olmeca refinery, will likely exert pressure on NWE gasoil performance in the mid-term.”

It stated further “Europe is one of the world’s largest purchasers of refined petroleum products and relied on imports from Asia and the US after the European Union banned the use of Russian diesel in the bloc.’’

Dangot refinery is eyeing the wider European market after International Oil Companies stopped supplying its crude oil.

Vice President of Oil and Gas at Dangote Industries Limited, Devakumar Edwin, announced the company had earlier exported its first jet fuel cargo to Europe as it rapidly scales production.

The refinery, accusing to the Gazette, is said to have exported 90 percent of its 3.5 billion litres of jet fuel and diesel to Europe over alleged lack of support from the Nigerian government.

Edwin said, “It is good to note that from the start of production, more than 3.5 billion litres, which represents 90 percent of our production, have been exported.”

OPEC stated that, “In June, the jet/kerosene crack spread in Rotterdam against Brent showed a slight decline, influenced by supply-side dynamics. Despite signs of improving air travel activities, subdued jet fuel demand from the aviation sector weighed on the product market

“Going forward, European jet/kerosene demand is expected to see upward pressure as consumption levels from the aviation sector continue to pick up in the coming months.”

According to report, Dangote Refinery in its first six months, scaled to 400,000 b/d and delivered diesel, jet fuel, naphtha, and fuel oil to both domestic and export markets, with Gasoline, Nigeria’s primary fuel type, being expected to be produced from mid-August

Notwithstanding, the refinery has already affected crude flows, with dozens of Nigerian cargoes remaining in-country and US WTI Midland, a comparable light, sweet grade, being imported

A West African crude trader told Commodity Insights that the mega-refinery could therefore tighten the light, sweet crude market. “Its diet is WTI and the lighter Nigerian [crudes] so if you were chasing those barrels you’d probably feel it quite keenly.”

“Once they get to 650,000 b/d without any WTI Midland, ‘severely disrupted’ [will be] the headline.”

WTI Midland crude initially emerged as the favored feedstock to supplement Nigerian supply, with the refinery signing long-term supply contracts for the US grade and noting its competitive pricing. Platyts, part of Commodity Insights, last assessed WTI Midland into Rotterdam at $82.36/b on July 31, while Nigeria’s Bonny Light was assessed at $82.80/b on the same day.

Crude flows in and out of the Dangote refinery have been felt in other markets, especially in Europe, the largest consumer of light, sweet Nigerian crude. The US grade has accounted for 30 per cent of crude delivered to Dangote, through 18 cargoes

President of Dangote Group, Aliko Dangote said the facility would broaden its feedstock sources with Libyan, Angolan, and Brazilian crude.

“The refinery was built to use Nigerian crude and add value to it within Nigeria. Why should we deviate from that focus?” said Dangote, adding that the crude supply issues were “getting resolved”, but that the refinery remained open to all opportunities “to supplement it.”

“Dangote refinery is designed to process a range of light and medium grades of crude oil, including Nigerian grades,” said Rasool Barouni, Associate Director and head of Refining at S&P Global Commodity Insights. “Other similar grades including other WAF grades could be an option.”

Recent Posts

Harsh Economy: Nigerians React As President Tinubu Spotted With Over 60-Vehicle Convoy In Lagos

In a video making waves on social media platforms, Nigerians have reacted with mixed feelings…

11 hours ago

Man Arrested For Insulting President Tinubu, Sanwo-Olu, IGP

A popular Nigerian TikToker identified simply as Seaking has been arrested by operatives of the…

17 hours ago

The Longest Prison Sentences Ever Served

Throughout history, some individuals have endured extraordinarily long prison sentences, with their stories reflecting the…

18 hours ago

Families Call For Help As DSS Arrests Lovers In Osun Community

There is growing tension in Modakeke, Osun State, following the alleged arrest of two lovers,…

22 hours ago

Ibadan Stampede: I Regret Not Heeding Spiritual Warning – Woman Who Lost Two Kids

A victim of the stampede that occurred in Ibadan, Oyo State capital, which has claimed…

22 hours ago

Trending Stories In Osun Today

The vibrant Osun State is no stranger to captivating events and headlines that draw attention…

23 hours ago

This website uses cookies.