Nigeria: 13% of crude oil exports transit through Dangote

A recent report highlights the significant change in crude oil flows in Nigeria, influenced by the Dangote refinery. In 2024, around 13% of Nigeria's crude oil exports were dedicated to supplying this world-class facility, capable of processing up to 650,000 barrels a day.

Despite its status as a net oil exporter, Nigeria imported 47,000 barrels of US oil per day in 2024. This unusual trend is partly due to the Dangote refinery, which received its first supply of US crude (West Texas Intermediate - WTI) in November 2024. Due to the limited availability of Nigerian crude on the local market, the refinery was forced to turn to the international market, resulting in an increase in imports.

The commissioning of the Dangote refinery, as well as other new facilities in the south of the country, has helped to change global crude flows. The sanctions imposed on Russian oil have accelerated this reorganisation, making Nigerian supplies crucial to many international markets. However, the Nigerian National Petroleum Company Limited (NNPCL) has been unable to supply crude to the Dangote refinery, contributing to its dependence on US crude imports.

Faced with these challenges, Aliko Dangote, founder of the refinery, has announced plans to begin exploration and production of crude oil, with a timetable initially set for the fourth quarter of 2024. However, production is expected to start in 2025, following several months of discussions with Nigerian officials about crude supply. The aim of this initiative is to reduce dependence on imports and strengthen the country's energy autonomy.

The increased demand for fuel due to the activity of local refineries represents an additional challenge for NNPCL, which has to balance its financial commitments. The company's debt stems from several oil loan agreements linking domestic production volumes to repayment obligations. These commitments are expected to continue until 2029.

With increasing local refining capacity and oil exploration initiatives, Nigeria is well placed to reduce its dependence on imports while consolidating its position in the global market. The Dangote refinery, as the largest single-train refinery in the world, plays a central role in this transformation, offering significant potential for the Nigerian economy and for the global energy sector.