Dangote Refinery will disrupts Europe’s oil industry - OPEC

The Organisation of Petroleum Exporting Countries (OPEC) has forecasted that Nigeria’s Dangote Refinery will significantly impact Europe’s oil industry, particularly in the Northwest Europe (NWE) gasoil market.

The world’s largest single-train refinery, situated in Lagos, is expected to disrupt traditional diesel and jet fuel suppliers, exerting considerable pressure on Europe’s refined petroleum product market. In its June 2024 Oil Market Report, OPEC identified the Dangote Refinery as a key new player among global suppliers, with potential production increases expected to challenge Europe’s reliance on established sources.

“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.

The $20 billion refinery, owned by Africa’s richest man, Aliko Dangote, began operations in January 2024 and has already started influencing global oil flows.

According to Standard & Poor Global, the refinery’s full capacity could significantly reshape international crude markets. “Nigeria’s $20 billion Dangote refinery would shake up international crude flows when it reaches full capacity, having already made an impact since coming online in January,” S&P Global noted.

The refinery, with a capacity of 650,000 barrels per day, has its sights set on the European market after international oil companies ceased supplying it with Nigerian crude.

Devakumar Edwin, vice president of oil and gas at Dangote Industries Limited, recently confirmed the refinery’s first successful export of jet fuel to Europe.

“It is good to note that from the start of production, more than 3.5 billion litres, which represents 90 percent of our production, have been exported,” Edwin said.