Dangote Refinery Projected to Challenge Europe’s Oil Sector and Alter Global Oil Flows– OPEC
The Organization of the Petroleum Exporting Countries (OPEC) has highlighted the profound influence of Nigeria’s Dangote Refinery on the global oil market, particularly its impact on Europe’s oil industry.
According to OPEC’s June 2024 Oil Market Report, the supply of diesel and jet fuel from the Dangote Refinery is set to disrupt Europe’s oil and gas sector, especially in Northwest Europe (NWE), a region heavily dependent on refined petroleum imports. The Dangote Refinery, which is the world’s largest single-train refinery, commenced operations in January 2024 and has quickly altered the dynamics of international crude flows.
With a production capacity of 650,000 barrels per day (bpd), the refinery has rapidly emerged as a significant player in the global energy landscape. Industry experts predict that the refinery’s output will not only pose a challenge to European suppliers but will also have a positive impact on Nigeria’s economy.
OPEC’s report underscores the “upside potential for higher production levels from Nigeria’s Dangote Refinery,” and notes that these new supplies, in conjunction with strong flows from the Middle East and Mexico’s Olmeca refinery, are likely to place downward pressure on NWE gasoil prices in the mid-term.
This development comes at a crucial juncture for Europe, which has been contending with supply issues following the European Union’s ban on Russian diesel imports. As one of the world’s largest consumers of refined petroleum products, Europe is expected to feel the far-reaching consequences of the Dangote Refinery’s entry into this market.
The refinery has already made a substantial impact, with Dangote Industries Limited exporting 90 percent of its 3.5 billion liters of jet fuel and diesel to Europe. This significant export volume is particularly noteworthy given the alleged lack of support from the Nigerian government, which led the refinery to seek international markets.
