How Dangote Refinery became Europe's biggest jet-fuel supplier
By Aboki Forex —
Dangote Refinery has overtaken the United States as Europe's largest jet-fuel supplier, emerging as a major winner from global fuel trade disruptions. The Lagos-based refinery supplied more than 466,000 tonnes of jet fuel to Europe in June, helping Nigeria become the region's biggest external fuel source that month.
US and Indian refiners have also increased exports as supply disruptions hit Russia and the Middle East. But Dangote is now competing directly in Europe, expanding beyond Nigeria and other African markets.
Record US and Indian exports
US refiners exported a record 1.9 million barrels per day of distillates, including diesel and heating oil, in the week ended August 7. American jet-fuel exports reached 443,000 barrels per day, close to the record 455,000 barrels per day in May.
India has also strengthened its position. Export-focused refiners such as Reliance Industries and Nayara Energy are running at high utilisation rates to meet shortages across Asia.
Brazil, previously a major buyer of Russian diesel, imported 196,000 barrels per day from the US in July. That is more than twice its June volume.
Dangote's rise
The 650,000-barrel-per-day Dangote Refinery processed more than 700,000 barrels per day during a performance test in June, according to the company. That figure shows technical capacity but does not mean the refinery consistently operates at that level.
Kpler data shows Dangote's total fuel exports rising from 168,000 barrels per day in February to 353,000 barrels per day in April. Exports later fell to 285,000 barrels per day in May, reflecting changes in production, domestic demand and international buying.
Jet fuel has become the refinery's strongest export product. Kpler data shows Dangote delivered more than 400,000 tonnes to Europe in July, accounting for about 20% of the continent's jet-fuel imports. Dangote Refinery CEO David Bird said in August that the facility was Europe's largest jet-fuel supplier in both June and July.
Global disruptions driving opportunity
Conflicts are reshaping fuel trade. The Iran conflict has affected Middle East production and shipping, while attacks linked to the Russia-Ukraine war have disrupted Russian refineries. Russia has extended fuel export restrictions until January 2027.
Global refinery throughput fell to about 89 million barrels per day in July, around five million barrels below the year-earlier level, according to the International Energy Agency. With global oil demand still above 100 million barrels per day, tighter supplies have pushed margins higher. US diesel margins exceeded $102 per barrel on Monday, Reuters reported.
Dangote is well placed because its Lagos location keeps it outside the main conflict zones while giving it access to Atlantic shipping routes and Nigeria's crude resources. But the advantage may not last. US refiners are increasing shipments to Europe and Latin America, Indian refiners are supplying Asian markets, and China has relaxed export restrictions. Chinese refined-fuel exports jumped to 1.1 million tonnes in July from 240,860 tonnes in June, according to LSEG Research data cited by Reuters.
What it means for Nigeria
For Dangote, jet fuel could remain its strongest opportunity, especially as limited African demand leaves volumes for international markets. The current boom is driven partly by extraordinary disruptions. If shipping routes reopen, Russian and Middle Eastern supplies recover, or fuel demand weakens, margins could narrow sharply.
That will be an important test for Dangote as it prepares for a potential public offering. The company has applied to raise as much as $5 billion, though the final size has not been determined. Meanwhile, the cost of importing petrol into Nigeria has climbed above what Dangote charges for the same product. Figures from the Major Energies Marketers Association of Nigeria (MEMAN) show the spot landing cost of Premium Motor Spirit reached N1,218.54 per litre as of August 13.
Dangote has proven that an African refinery can compete in one of the world's toughest fuel markets. The bigger challenge will be holding onto its European foothold when the global supply crisis eventually eases.