Dangote Refinery Imports One-third of Its Crude Supply from US

*Set to buy 14 million barrels in June, July 

*Brazil’s Petrobras eyes return to Nigeria’s oil sector

Emmanuel Addeh in Abuja

As Nigeria’s stunted oil production growth as well as challenges with the Domestic Crude Supply Obligation (DCSO) continue to hobble the Dangote refinery’s chances of sourcing feedstock locally, the 650,000 bpd facility in Lagos, has now imported a third of the commodity from the US in 2025.

This year alone, the lion’s share of the oil has been the grade, West Texas Intermediate  (WTI) Midland, ship tracking compiled by Bloomberg showed, with the proportion having almost doubled what it was in 2024, the ramp-up year.

Dangote’s elevated purchases “probably at the margin, supported the Brent market a little,” said Neil Crosby, Sparta Commodities analyst. “I expect WTI to keep flowing to Dangote to some degree in the future, but the volumes will depend on price,” Crosby told Bloomberg.

The heightened flows are logical as no two crudes are identical and the profits from running them vary depending on what fuels each one churns out, the report said.

WTI offers Dangote advantages over Nigerian crude that result in improved yields of reformate and better gasoline (petrol) blending capabilities, according to Senior Refinery analyst at Energy Aspects Ltd, Randy Hurburun.

A spokesman for Dangote said the increased use of US oil reflects the refinery’s rising processing levels and a reduction of Nigerian crude that’s available to buy.

WTI Midland is by far the largest stream of six grades that set Dated, as the benchmark is known among traders. It was added to the benchmark because of concerns that the other five — North Sea grades Brent, Forties, Oseberg, Ekofisk and Troll — were slowly running out, making trading potentially more volatile.

In June and July alone, Dangote is expected to take in 14 million barrels of WTI Midland, according to traders who monitor the company’s buy tenders closely. Trading giant Vitol Group was the biggest supplier of US barrels, lists of vessel bookings showed. A spokesperson for the company declined to comment, according to the report.

The extra WTI flows to the plant also coincided with relatively weak demand for the WTI Midland in Asia in recent months due to Chinese tariffs on US crude and availability of competing supplies of Abu Dhabi’s Murban crude, Crosby said.

Nigeria’s oil sector continues to face significant structural and logistical hurdles, leading to stunted growth, despite the country’s status as Africa’s largest crude producer. One of the core issues is the persistent challenge in ensuring reliable and adequate domestic supply of crude oil, a problem that has not only weakened local refining efforts but has also affected major players like the Dangote Refinery.

At the heart of this issue is a disconnect between crude production and in-country utilisation. Although Nigeria produces nearly 1.7 million barrels of crude and condensate per day, a substantial portion is exported, often under long-term contracts or hitherto, swap arrangements that prioritised foreign exchange earnings.

This has left local refineries, including modular facilities and the Dangote Refinery, struggling to secure sufficient feedstock.

Meanwhile, Petrobras aims to make Africa its main region of development outside Brazil, the state-run oil giant’s Chief Executive, Magda Chambriard, told Reuters during a wide-ranging interview about the company’s strategy.

Ivory Coast has already extended the “red carpet” for Petrobras to explore deep and ultra-deep waters off its coast, when it gave the company preference in buying nine offshore exploratory blocks last Wednesday, said Chambriard.

She added that Nigeria, Angola, and Namibia have also expressed interest in working with the Brazilian giant.

“We are experts in the eastern margin of Brazil,” said Chambriard, citing geological similarities between the region and Africa. “The correlation between Brazil and Africa is unequivocal, so we need to go to Africa,” she said.

In recent years, Petrobras has shown an interest in buying stakes in oil assets abroad, especially in Africa, as it looks to boost reserves while it faces delays in obtaining environmental permits to drill for new oil off the coast of the Amazon rainforest.

Petrobras was once active in Nigeria. The company entered the Nigerian oil and gas sector in the early 2000s through its international exploration and production arm, Petrobras International Braspetro.

Petrobras held interests in offshore oil blocks, particularly in deepwater assets. One notable involvement was in Oil Prospecting License (OPL) 324, which it operated in partnership with other international companies. 

By the early 2010s, Petrobras began to scale down its presence in West Africa, including Nigeria, largely as part of a broader global divestment strategy aimed at refocusing resources on more profitable assets, particularly in Brazil’s pre-salt fields.