The Organization of Petroleum Exporting Countries (OPEC) has highlighted the Nigerian-based Dangote Refinery and Petrochemicals as a key player poised to disrupt the North West Europe (NWE) gasoil market.
In its June 2024 Oil Market Report, OPEC noted that the Dangote Refinery, along with strong flows from the Middle East and new supplies from Mexico’s Olmeca refinery, is expected to put pressure on NWE gasoil performance in the mid-term.
“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,” OPEC stated.
Europe, one of the world’s largest purchasers of refined petroleum products, has been relying on imports from Asia and the US following the European Union’s ban on Russian diesel. The Dangote Refinery, with a capacity of 650,000 barrels per day and owned by Africa’s richest man, Aliko Dangote, is set to capitalize on this opportunity by targeting the wider European market after International Oil Companies stopped supplying it with crude oil.
Devakumar Edwin, Vice President of Oil and Gas at Dangote Industries Limited, announced that the refinery has exported its first jet fuel cargo to Europe as it rapidly scales up production. The refinery has exported 90 percent of its 3.5 billion liters of jet fuel and diesel to Europe due to a lack of support from the Nigerian government.
“It is good to note that from the start of production, more than 3.5 billion liters, which represents 90 percent of our production, have been exported,” Edwin said.
BP is currently transporting its first jet fuel cargo to Rotterdam from Dangote, after being awarded part of a 120,000 metric tonnes tender offered for the end of May, according to S&P Global.
OPEC’s report further stated, “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.”
