“Dangote Refinery Hits Snags and Shifts Gears: Now Reselling Crude Amid Technical Glitches”

Babatunji Wusu –

Nigeria’s leading Dangote oil refinery is reportedly reselling cargoes of U.S. and Nigerian crude, according to four trade sources familiar with the situation, as reported by Bloomberg. This news comes amid ongoing operational difficulties at the refinery.

Three of these sources attributed the reselling to technical issues affecting the refinery’s crude distillation unit (CDU). However, a Dangote executive refuted these claims, insisting that the CDU is functioning properly. Additionally, the refinery’s spokesperson denied any allegations that Dangote was selling Nigerian crude.

The refinery, which began production in January, is on track to become the largest in both Africa and Europe once it reaches full capacity. This could significantly impact the profitable Europe-to-Africa fuel trade and elevate Nigeria’s role as a major fuel exporter.

Sources indicated that the resold cargoes included Nigerian Escravos and Forcados crude, as well as U.S. WTI Midland crude. Traders noted that the refinery has been importing several crude cargoes each month. While such resales by refineries are unusual, they are not unprecedented, according to traders.

The news led to a drop in crude prices, with Brent crude falling as much as 2.5% to around $80 per barrel before recovering to over $81 by 1700 GMT on Friday.

Built at a cost of $20 billion by Aliko Dangote, Africa’s richest man, the Dangote refinery aims to reduce Nigeria’s dependency on imported fuel. Despite being Africa’s largest oil producer, Nigeria continues to rely on fuel imports due to underperforming domestic refineries.