Nigeria Turns to U.S. Oil to Power Dangote Refinery, Despite Own Crude Wealth
Despite being Africa’s top crude oil producer, Nigeria has significantly increased its purchases of West Texas Intermediate (WTI) crude from the United States to supply the massive Dangote Oil Refinery.
This facility marks a landmark achievement in African industrial development, boasting a processing capacity of 650,000 barrels per day and ranking among the world’s most substantial refining operations.
The enterprise is owned by billionaire Aliko Dangote, whose estimated net worth of approximately $28 billion makes him the continent’s wealthiest individual.
Data from Bloomberg’s vessel monitoring systems reveals that the Lagos-area refinery has sourced roughly one-third of its crude requirements from American suppliers, with West Texas Intermediate Midland grade being the preferred selection. This proportion has shown remarkable growth, nearly doubling since the facility began scaling up production in 2024.
Industry experts cite several strategic and practical reasons behind this shift toward American oil procurement.
Member nations of the Organisation of Petroleum Exporting Countries (OPEC) face challenges in cost-effectively expanding crude output while navigating intense global market competition. This has created opportunities for the 650,000-barrel-per-day facility to secure greater volumes of American crude, particularly WTI, as it moves toward maximum operational efficiency.
WTI crude offers superior gasoline and refined product yields, making it particularly attractive to Dangote’s operations.
Market dynamics in Asia have also played a role, with reduced demand for WTI in that region due to persistent U.S.-China trade disputes, thereby increasing supply availability for African buyers.
The surge in American crude purchases coincides with reduced access to domestic Nigerian oil supplies. Bloomberg analysis indicates that U.S. crude will constitute a greater share of Dangote’s June imports compared to locally sourced material.
Commercial fuel production at the Dangote facility began in 2024, with diesel and naphtha manufacturing starting in January, followed by gasoline production in September.
The preference for American oil reflects both the refinery’s expanding processing capabilities and the reduced availability of Nigerian crude in the market.
Among the six recognised benchmark crude categories, WTI Midland now represents the most substantial supply stream. Its inclusion in pricing mechanisms addresses concerns about the potential depletion of the remaining five North Sea sources—Brent, Forties, Oseberg, Ekofisk, and Troll, which could otherwise destabilise market conditions.
Industry sources tracking Dangote’s procurement activities project that WTI Midland purchases will total 14 million barrels during the summer months. Shipping records indicate that Vitol Group serves as the primary supplier of these American crude deliveries.
