Dangote Refinery Strengthens U.S. Economy, Oil Prices See First Weekly Gain Since Mid-May

The Dangote Oil Refinery’s increasing demand for U.S. WTI crude has led Nigeria, Africa’s top producer of crude oil, to expand its imports of the fuel.

The refinery has an installed capacity of 650,000 barrels per day, making it the largest in Africa and one of the most important crude processing plants in the world.

With an estimated net worth of $28 billion, Aliko Dangote is the richest man in Africa and the owner of the refinery.
About a third of the oil used at the Dangote Refinery, which is close to Nigeria’s commercial hub, has come from the United States, mostly the West Texas Intermediate (WTI) Midland grade, according to Bloomberg’s ship-tracking data. This percentage has almost increased since 2024, when the refinery started increasing its output.

According to analysts, a mix of operational and strategic considerations are responsible for the rise in the purchase of U.S. oil.

Global rivalry has made it challenging for OPEC member countries to grow up their crude supplies economically. As it approaches full operating capacity, this dynamic has enabled the 650,000-bpd refinery to purchase more stored U.S. crude, especially WTI.

Dangote also favors WTI because of its greater production of refined products including gasoline.

Additionally, because of the ongoing trade disputes between the United States and China, parts of the Asian market for WTI crude shrank this year, raising the supply of American petroleum for other regions, such as West Africa.

The rise in U.S. oil consumption coincides with a decrease in Nigerian crude supply. According to Bloomberg analysis, a greater share of Dangote’s June imports are anticipated to come from U.S. crude than from domestic sources.

In 2024, the Dangote refinery started generating fuel. In January, manufacturing of diesel and naphtha began, and in September, gasoline.

The use of U.S. oil is consistent with the refinery’s expanding processing capacity and the decline in the amount of Nigerian crude that is available for purchase.

WTI Midland: The Preeminent Level
The largest stream among the six benchmark crude grades is WTI Midland. It was added to the price basket because of worries that the slow depletion of the other five North Sea-sourced companies—Brent, Forties, Oseberg, Ekofisk, and Troll—could raise market volatility.

The refinery’s WTI Midland intake is anticipated to hit 14 million barrels this summer, according to merchants keeping an eye on Dangote’s buying trends. Based on vessel bookings, the trading behemoth Vitol Group is the biggest provider of these U.S. barrels.

Aliko Dangote, the president of Nigeria, recognized President Bola Tinubu’s continued support for the project and for privately-led infrastructure development by dedicating the primary access road to the new refinery after him. The Deep-Sea Port Access Road, which links the Dangote Fertilizer Plant to Eleko Junction in Lagos State, was formally commissioned during the announcement.

“You are largely responsible for the Dangote Refinery complex,” Dangote remarked in an address to President Tinubu. Mr. President, I would like to announce that the main route to our refinery will now be Bola Ahmed Tinubu Road.

“President Tinubu has inspired investor confidence despite difficult economic conditions,” he continued. “You are an inspiring leader, Mr. President.” I hope you keep up the fantastic job. I am grateful for your encouragement and support.

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The renamed access route is a component of a broader infrastructural network connected to the refinery, according to Dangote. Nigeria is anticipated to be connected to neighboring nations like Chad and Cameroon via this network.

The infrastructure also connects to the Sagamu–Benin Expressway via the Epe–Ijebu–Ode sector, which is a vital logistical route.

The first weekly gains in three weeks are reported by Crude.
The two biggest economies in the world are expected to grow faster than expected due to a solid U.S. jobs report and the restart of trade negotiations between the US and China.

Crude oil saw its first weekly increase in three weeks as it finished up $1 per barrel in the week’s last trading session. With a 2% increase, West Texas Intermediate crude closed the day at $64 a barrel.

The global oil market’s supply dynamics also helped to sustain the price increase. Nine OPEC nations that are subject to production targets saw lower-than-expected output growth in May.

Production was either hardly increased or not at all in Iraq and the United Arab Emirates.

One of the three OPEC countries exempt from limits, Libya, increased its output to a 13-year high of more than 1.3 million barrels per day in the meanwhile. In May, OPEC’s total production was 27.54 million barrels per day, which was almost 200,000 barrels more than in April.