The Dangote Petroleum Refinery processes 13% of Nigeria’s crude oil exports for local supply in 2024, marking a significant increase from the 2% allocated domestically in 2023. This shift reduces Nigeria’s crude exports to Europe while contributing to a transformation in global oil trade routes amid geopolitical and economic pressures.
Despite being a major crude oil exporter, Nigeria imports 47,000 barrels per day of U.S. crude oil in 2024. Analysts describe this as unusual for an oil-producing nation. The Dangote Refinery plays a central role in this development, importing U.S. West Texas Intermediate (WTI) crude to meet operational demands as the Nigerian National Petroleum Company faces challenges in supplying adequate crude oil.
Global crude oil exports decline by 2% in 2024, marking the first drop since the COVID-19 pandemic. This decline is driven by weaker demand growth, disruptions in trade routes due to conflicts, and the emergence of new refineries in developing nations.
Geopolitical tensions, including wars in Ukraine and the Middle East, disrupt global supply chains. Sanctions on Russia and Iran push European and South American buyers to seek alternative suppliers, increasing crude imports from the United States and Guyana. However, higher shipping costs, caused by Red Sea vessel attacks linked to the Gaza-Israel conflict, complicate trade logistics further.
While Europe and South America reduce Russian oil imports, India and China ramp up their purchases. Other contributing factors include reduced oil production in Mexico, Canada’s pipeline expansion to its west coast, and halted exports from Libya.
With a processing capacity of 600,000 barrels per day, the Dangote Refinery remains Africa’s largest single-train refinery. While not yet operating at full capacity, it significantly boosts Nigeria’s domestic fuel supply and exports refined products, such as Premium Motor Spirit, to countries like South Africa, Ghana, and Angola. It also exports diesel and jet fuel to Europe, contributing to regional and global energy markets.
The global oil market enters 2025 with significant uncertainties. Analysts are divided over China’s oil demand projections, while India’s demand is expected to grow. A global shift toward renewable energy and gas continues to reduce reliance on crude oil, and potential policy changes under the U.S. administration regarding sanctions on Iran and Russia add further unpredictability.
Experts agree that volatility has become the norm, reflecting ongoing shifts in energy consumption patterns and geopolitical influences.
According to recent data, crude oil exports account for 74.98% of Nigeria’s total export value in Q2 2024, totaling ₦14.56 trillion. The Dangote Refinery plays a vital role in meeting local energy demands while reshaping Nigeria’s position in the global oil trade.
