KEY POINTS
- Indian refiners increase imports of Nigerian crude.
- Dangote refinery relies on US oil for feedstock.
- Price incentives drive shift in sourcing strategy.
Refineries in India are snapping up Nigerian oil even as Nigeria’s flagship Dangote Petroleum Refinery leans more heavily on shipments from the United States. It’s a twist that industry watchers say underlines the strange economics shaping today’s global crude flows.
India’s state-run refiners have returned to the spot market, picking up millions of barrels from non-Russian sources in recent weeks, including Nigeria. Meanwhile, the $20 billion Dangote refinery in Lagos is running mostly on American barrels — despite a deal meant to prioritise domestic crude.
Indian refiners boost Nigerian crude imports
Indian Oil Corporation recently bought one million barrels of Nigeria’s Agbami crude for September delivery in a tender awarded to Trafigura, according to industry sources cited by Reuters. Bharat Petroleum also secured barrels for September and October arrivals. In total, India has bought over two million barrels from Nigeria for the two-month window, alongside supplies from Angola, Abu Dhabi, and also the US.
The purchases come after Washington pressed New Delhi to curb Russian imports. India had been among the few major buyers of cheap Russian oil since the invasion of Ukraine in 2022, but scaled back in late July under US pressure.
Dangote refinery US crude imports hit record
In contrast, the Dangote refinery imported an average of 10 million barrels in July, with US crude accounting for about 60 percent of its 590,000 barrels per day (bpd) intake, data from Kpler shows. Nigerian grades made up the remaining 40 percent, largely from fields like Amenam, Bonny Light, and Escravos.
This marks the first time American supply has overtaken domestic crude at the plant, a shift driven by competitive US pricing and also challenges in securing Nigerian barrels. The refinery’s intake from local producers fell to 220,000 bpd in August from 275,000 bpd the previous month.
Capacity goals face operational hurdles
Dangote has further said it plans to raise throughput to 700,000 bpd, potentially lifting gasoline output to 322,000 bpd. But analysts caution that sustaining full capacity before late 2026 is unlikely due to ongoing maintenance and mechanical issues.
To maximise gasoline yields, the refinery has been importing around 22,000 tonnes of condensate naphtha each month to feed its hydrotreater, underscoring persistent constraints at its RFCC unit. Still, the facility is already exporting gasoline to Oman and Ivory Coast, and jet fuel to West Africa and Europe.
On the upstream side, Nigeria’s crude and condensate output held at 1.75 million bpd in July — its highest three-month average in more than five years — helped by fewer pipeline outages and rising onshore production.
