Refiners in the United States and India have increased exports as attacks and restrictions disrupt supplies from the Middle East and Russia, Reuters reported on Wednesday, citing government statistics, shipping data, analysts and traders.
The disruptions have left major importing countries searching for alternative supplies of diesel, petrol and aviation fuel. They have also created an opening for the Dangote refinery, which has moved beyond serving Nigeria and other African markets to become an important supplier to Europe.
US refiners exported a record 1.9 million barrels per day of distillates, including diesel and heating oil, during the week ended 7 August, according to US government data.
American jet-fuel exports reached 443,000 barrels per day during the same period, just below the record of 455,000 barrels per day recorded in May.
India has also emerged as a key supplier when Asian markets face shortages. Large export-focused facilities operated by companies including Reliance Industries and Nayara Energy have maintained high utilisation rates, allowing them to respond quickly when regional supplies tighten.
However, the competition is no longer restricted to the world’s established refining centres.
Dangote enters Europe’s fuel market
The Dangote refinery, owned by Africa’s richest person, Aliko Dangote, has become one of the major refineries benefiting from the disruption.
The Lagos-based facility has an official nameplate capacity of 650,000 barrels per day. It processed more than 700,000 barrels per day during a performance test conducted by its process licensors in June, according to the company.
That test demonstrated the refinery’s technical capacity under controlled conditions. It does not necessarily mean that the facility processes 700,000 barrels every day.
Shipping data previously provided by Kpler showed that Dangote’s total fuel exports increased from 168,000 barrels per day in February to 353,000 barrels per day in April. Approximately half the April volume went to other African countries.
Exports subsequently declined to 285,000 barrels per day in May, demonstrating that monthly volumes can change depending on production, domestic demand and available buyers.
Jet fuel has become one of Dangote’s strongest export products.
The refinery supplied more than 466,000 tonnes of jet fuel to Europe in June, helping Nigeria overtake the United States as the region’s largest external supplier during the month, according to S&P Global Commodity Insights data previously reported by the media.
Kpler data subsequently showed that Dangote delivered more than 400,000 tonnes to Europe in July. The cargoes accounted for approximately 20% of Europe’s jet-fuel imports that month.
Dangote refinery chief executive David Bird said in August that the facility was Europe’s largest jet-fuel supplier in both June and July.
The figures place Dangote in increasingly direct competition with US refiners for European aviation-fuel buyers. They do not, however, demonstrate that the Nigerian refinery is displacing American suppliers permanently.
Wars create opportunities for refiners
The changing trade flows follow disruptions affecting two important sources of global petroleum supplies.
The conflict involving Iran has affected fuel production and shipping through the Middle East, while attacks connected to the war in Ukraine have disrupted Russian refineries and export facilities.
Russia has also extended restrictions on fuel exports until January 2027. Brazil, formerly a major buyer of Russian diesel, imported 196,000 barrels per day from the United States in July, more than twice its June volume, according to Kpler data.
Global refinery throughput fell to approximately 89 million barrels per day in July, five million barrels below the level recorded a year earlier, according to the International Energy Agency. Global oil demand remained above 100 million barrels per day.
The resulting shortage has pushed refining margins higher. US diesel margins exceeded $102 per barrel on Monday.
Dangote is exposed to the same favourable conditions. The refinery is located outside the areas directly affected by the Middle East and Ukraine conflicts and can export products through the Atlantic.
Its location also gives it access to Nigeria’s crude oil, although domestic supply problems have previously forced it to purchase some feedstock from international suppliers.
Competition could become more intense
The current market offers Dangote an opportunity, but it also brings formidable competitors.
US refiners are increasing shipments to Europe and Latin America. Indian refiners are acting as alternative suppliers to Asian buyers, while China relaxed export restrictions in July.
Chinese refined-fuel exports rose to 1.1 million tonnes in July from 240,860 tonnes in June.
Source: Africabusinessinsider