Dangote’s crude shortage, dependence on surge from US imports
Aliko Dangote
Dangote’s crude shortage, dependence on surge from US imports
* Commends the naira-for-crude swap deal on the Nigerian economy.
The President of the Dangote Group, Aliko Dangote, says his 650,000-barrel capacity refinery is “increasingly” relying on the United States for crude oil.
This came as findings showed that the Dangote Petroleum Refinery is projected to import a total of 17.65 million barrels of crude oil between April and July 2025, beginning with about 3.65 million barrels already delivered in the past two months, amid ongoing allocations under the Federal Government’s naira-for-crude policy.
Dangote informed the Technical Committee of the One-Stop Shop for the sale of crude and refined products in naira initiative that the refinery was still battling crude shortages, which had led it to resort to imports from the United States.
In a statement from the firm on Thursday, Dangote stated this when the Coordinator of the OSS Technical Committee, Mrs Maureen Ogbonna, led a delegation to the refinery, which she described as a breath of fresh air, impacting virtually every sector of the economy.
According to the statement, Dangote applauded the technical committee for its role in supporting the implementation of President Bola Tinubu’s laudable naira-for-crude initiative.
He commended the positive impact of the naira-for-crude swap deal on the Nigerian economy, noting that it has led to a reduction in petroleum product prices, eased pressure on the dollar, and ensured the stability of the local currency, among others.
“However, he noted that due to a shortage of domestic crude oil, the refinery has increasingly relied on imports from the United States to meet its needs in recent months,” the statement read partly.
Recall that the refinery has been importing more cargoes of WTI in its bid to ramp up production. So far this year, US crude has accounted for a third of the purchases of the Dangote refinery, according to vessel-tracking data compiled by Bloomberg. A large part of the American crude feeding Nigeria’s refinery is the WTI Midland grade, the data showed.
Dangote stressed the importance of bold investment in strategic sectors as a key to industrialisation, revealing that building the refinery required extensive infrastructure development, including a world-class, self-sufficient marine facility capable of accommodating the largest vessels globally. He assured the delegation of the refinery’s commitment to national development.
Speaking, the Coordinator of the OSS Technical Committee, Ogbonna, hailed the $20bn facility as a symbol of the industrial revolution, driving Nigeria’s economic emancipation.
“This refinery touches all our lives. There’s scarcely any sector unaffected. From pharmaceuticals to construction, food to plastics, this project is transformational. God has used the President of the Dangote Group to liberate Nigeria. I see this as the beginning of an industrial revolution,” she said.
She noted that, in line with Tinubu’s vision of achieving full domestic sufficiency in petroleum products and positioning Nigeria as a major global exporter, the committee was committed to eliminating regulatory, operational, and logistical barriers that hinder the smooth supply and sale of domestic crude oil and refined products in naira.
Reflecting on the scale of the facility, Ogbonna added, “It is truly mind-blowing that one man could envision and execute such a project. As we toured the refinery, we thought we had seen everything until we reached the laboratory. That lab alone is an institution. I don’t know of any institution in Nigeria or even globally that boasts such a laboratory for petrochemicals.”
Ogbonna urged Dangote to remain focused and undeterred by detractors, emphasising that the project is a global achievement, not a personal enterprise.
“We feel truly honoured to have been warmly received by the President of the Dangote Group and his team. My advice to him is: do not be discouraged by critics. He was never self-centred. Despite the obstacles, he was driven by a vision for Nigeria’s future, reaching far beyond Africa,” she added.
The statement concluded that the refinery was designed to process a wide range of crude types, including African and Middle Eastern grades as well as US Light Tight Oil. “The refinery can meet 100 per cent of Nigeria’s domestic demand for petrol, diesel, kerosene and aviation jet fuel, with a surplus available for export,” the company reiterated.
Report had it that the refinery is projected to receive a total of 17.65 million barrels of crude oil between April and July 2025, beginning with about 3.65 million barrels already delivered in the past two months.
The refinery has started receiving crude allocation of the planned nine million barrels in June and is awaiting another five million barrels in July, with the lion’s share of it being the grade West Texas Intermediate – Midland from the United States.
The crude import is part of the refinery’s push to reach a full operational capacity of 650,000 barrels per day and intensified efforts to secure a steady supply of crude oil, including sourcing from international markets. While the refinery has historically sourced crude from countries like Brazil, Angola, and Libya, imports from the US now dominate.
Findings by one of our correspondents, based on recent data obtained from the Tanker Position Report compiled by maritime tracking firm Blue Sea Maritime, showed that 21 oil vessels berthed at ports in Lagos between April 6 and May 28, 2025.
These ships delivered a total of 3,652,214 barrels of crude oil to the $20bn refinery, owned by Africa’s richest man, between April and May. It also plans to receive nine million barrels from the same source in June and five million barrels in July.
Data showed that imports from the US have surpassed allocations received from domestic crude producers in recent months. A breakdown showed that the refinery has moved from total dependence on Nigerian crude in December 2024 to importing 27.1m barrels of crude from the US in seven months. This is compared to 46.2 million barrels obtained from the government within the same period.
An analysis of the Tanker Position Report revealed that between April 6 and May 28, 2025, at least 22 vessels delivered a cumulative 3.01 million barrels of crude oil to the Dangote Petroleum Refinery, mainly through the Lekki Deep Seaport.
Data showed that the crude imports began with 130,000 barrels received on April 1, followed by 135,909 barrels on April 5, and 270,250 barrels on April 6.
Additional shipments included 145,000 barrels on April 8, 294,076 barrels on April 9, 145,890 barrels on April 15, 145,890 barrels on April 19, 140,000 barrels on April 20, 136,124 barrels on April 23, and 140,000 barrels on April 30.
In May, the imports continued with 140,000 barrels received on May 3; 146,000 barrels on May 7; another 140,000 barrels on May 7; 125,000 barrels on May 15; and 125,200 barrels on May 21.
On May 23, the facility brought in two vessels conveying 273,454MT and 125,000MT, respectively. On May 24, 247,989 MT of crude oil handled by Agent WAPS arrived at 2:45 pm.
On the same day, a union peace ship carrying 273,454 barrels discharged crude at the refinery. 247,978 barrels berthed on May 27 and 125,000 barrels on May 28.
These shipments, which berthed at Lagos ports, further underscore the refinery’s growing reliance on imported crude amid concerns over inadequate domestic supply from the Nigerian National Petroleum Company Limited.
Meanwhile, a report by Energy in Africa said a key factor behind Dangote refinery’s preference for US crude lies in crude quality. The refinery is optimised to process light sweet crude, a type of oil with low sulfur content that is easier and cheaper to refine into high-value fuels like gasoline, diesel, and jet fuel.
While Nigeria does produce some light sweet grades such as Bonny Light and Qua Iboe, they are often more expensive on the spot market and subject to frequent supply disruptions and chronic underinvestment in infrastructure.
It said the refinery opted for WTI because strong domestic production, efficient logistics, and a reliable export supply chain often make it more competitively priced than comparable Nigerian grades.
“Feedstock predictability is critical. A facility of this scale cannot afford supply disruptions, even if the crude is sourced from right next door,” a senior analyst at Rystad Energy stated.
According to Randy Hurburun, senior refinery analyst at Energy Aspects Ltd, “WTI offers Dangote advantages over Nigerian crudes that result in improved yields of reformate and better gasoline blending capabilities.”
Also commenting on the situation, global oil markets expert Aleksandr Butov noted that, “The refinery’s reliance on US crude imports highlights Nigeria’s ongoing production challenges, despite repeated government assurances and the crude-for-naira exchange policy.”
In an earlier interview with Bloomberg, a spokesman for Dangote said the increased use of US oil reflects the refinery’s rising processing levels and a reduction of Nigerian crude that’s available to buy.
Earlier this year, the facility said it hoped to ramp up production with the target of hitting the 650,000 bpd mark by June this year. Officials said it planned to import more crude oil as supply and look beyond the shores of Nigeria for the feedstock.
The massive crude imports raise fresh questions about the crude allocation under the naira-for-crude oil agreement and concerns for the foreign exchange market due to scarce FX being used for crude oil imports.
The naira-for-crude deal between Dangote refinery and the government was recently revamped after the Federal Executive Council directed the full implementation of the suspended agreement with local refiners. The deal includes an initial volume of 350,000 barrels.
Recall that the first phase of the six-month deal involving the Federal Government, Nigerian National Petroleum Company Limited, and local refiners ended March 31, 2025. To restart the deal, the government said the initiative with local refineries is not a temporary measure, but a “key policy directive designed to support sustainable local refining.”
The refinery has repeatedly acknowledged the naira-for-crude deal as the reason for the reduction in petrol prices, which translates to reduced costs at the pumps. It affirmed that the prices of petrol would remain affordable and stable despite the fluctuations in global crude oil prices.
The company, in a release signed by its Group Chief Branding and Communications Officer, Anthony Chiejina, recently stated that the decision to maintain price stability reflects its unwavering commitment to supporting the Nigerian economy and alleviating the burden on consumers from the increase in fuel prices by maintaining price stability.
“We are immensely grateful to President Bola Tinubu for making this possible through the commendable naira-for-crude initiative, which has enabled us to consistently reduce the price of petroleum products for the benefit of all Nigerians,” it stated.
