In 2024, the Dangote Petroleum Refinery will process 13% of Nigeria’s crude oil exports for local supply, a significant rise from the 2% allocated domestically in 2023. This change decreases Nigeria’s crude exports to Europe and plays a role in reshaping global oil trade routes amidst geopolitical and economic challenges.
The Dangote Refinery is a key player in this development, importing U.S. West Texas Intermediate (WTI) crude to meet operational demands as the Nigerian National Petroleum Company struggles to supply enough crude oil. In 2024, Nigeria imports 47,000 barrels of U.S. crude oil per day, which analysts characterise as unusual for an oil-producing nation, despite being a major crude oil exporter.
Global crude oil exports decline by 2% in 2024, marking the first drop since the COVID-19 pandemic. This decline is driven by weaker demand growth, disruptions in trade routes due to conflicts, and the emergence of new refineries in developing nations.
Geopolitical tensions, including wars in Ukraine and the Middle East, disrupt global supply chains. Sanctions on Russia and Iran push European and South American buyers to seek alternative suppliers, increasing crude imports from the United States and Guyana. However, higher shipping costs, caused by Red Sea vessel attacks linked to the Gaza-Israel conflict, complicate trade logistics further.
While Europe and South America reduce Russian oil imports, India and China ramp up their purchases. Other contributing factors include reduced oil production in Mexico, Canada’s pipeline expansion to its west coast, and halted exports from Libya.
With a processing capacity of 600,000 barrels per day, the Dangote Refinery remains Africa’s largest single-train refinery. While not yet operating at full capacity, it significantly boosts Nigeria’s domestic fuel supply and exports refined products, such as Premium Motor Spirit, to countries like South Africa, Ghana, and Angola. It also exports diesel and jet fuel to Europe, contributing to regional and global energy markets.
The global oil market enters 2025 with significant uncertainties. Analysts are divided over China’s oil demand projections, while India’s demand is expected to grow. A global shift toward renewable energy and gas continues to reduce reliance on crude oil, and potential policy changes under the U.S. administration regarding sanctions on Iran and Russia add further unpredictability.
Experts agree that volatility has become the norm, reflecting ongoing shifts in energy consumption patterns and geopolitical influences.
Recent data shows that 74.98% of Nigeria’s total export value in Q2 2024, or ₦14.56 trillion, came from crude oil exports. Nigeria’s place in the world oil trade is being reshaped by the Dangote Refinery, which is essential to supplying local energy needs.
