Dangote Refinery’s Impact on Europe’s Petroleum Market Highlighted by OPEC

By DAYO ADESULU

The Organisation of the Petroleum Exporting Countries (OPEC) has acknowledged the significant impact of Nigeria’s Dangote Petroleum Refinery on global petroleum markets, particularly in Europe.

Key Highlights

1. Reduced European Exports to Nigeria
   • Since commencing operations in January last year, the 650,000-barrel-per-day refinery has ramped up production, including Premium Motor Spirit (PMS).
   • OPEC noted that the refinery’s output has curtailed Nigeria’s reliance on petroleum product imports from Europe.
   • This shift has introduced adjustments in global fuel flows, particularly affecting European gasoline markets.
2. Exports Beyond Africa
   • The refinery has expanded its influence by exporting petrol, diesel, and aviation fuel to countries within and outside Africa.
3. Market Effects in Europe
   • According to OPEC’s report, the increase in Nigeria’s gasoline production has contributed to an oversupply in the Atlantic Basin.
   • This surplus, coupled with high gasoline inventories in storage hubs like Amsterdam-Rotterdam-Antwerp, has led to bearish market sentiments.
4. OPEC’s Observations
   • OPEC highlighted that the ramp-up in refinery outputs is likely to continue reshaping international trade flows.
   • It noted a decline in Nigerian oil product imports in Q4 2024, bolstering the country’s external sector outlook.

Nigeria’s Crude Production Increase

• OPEC’s Monthly Oil Market Report revealed that Nigeria’s average daily crude oil production reached 1.507 million barrels per day (bpd) in December 2024, up from 1.477 million bpd in November.
• The Nigerian government reported a slightly lower figure of 1.485 million bpd for December, aligning with the Nigerian Upstream Petroleum Regulatory Commission.

Global Ranking of Dangote Refinery

• The $20 billion refinery surpasses Europe’s largest refineries in capacity, with its 650,000 bpd output.
• Comparative figures include Shell’s Pernis refinery in the Netherlands (404,000 bpd) and BP Rotterdam (380,000 bpd).

Implications of Dangote Refinery’s Operations

• The refinery’s capacity not only positions it above Europe’s top refineries but also underscores Nigeria’s potential to shift from an importer to a significant exporter of refined petroleum products.
• As the refinery continues to ramp up operations, it is poised to further influence global petroleum trade dynamics.