Dangote Refinery Resumes U.S. Oil Imports Amid Concerns Over Local Supply Shortfall

The Dangote Petroleum Refinery has resumed imports of U.S. crude oil after a three-month pause, a move that raises questions about the Federal Government’s naira-for-crude programme and the adequacy of domestic supply from the Nigerian National Petroleum Company Limited (NNPCL). According to a report from Bloomberg, the refinery has secured a shipment of two million barrels of WTI Midland crude from Chevron, expected to arrive next month.

Earlier this year, the Dangote Refinery reduced its dependence on foreign crude imports after reaching an agreement with the government to source up to 400,000 barrels of Nigerian oil per day, paid for in naira rather than dollars. This arrangement, intended to reduce foreign currency outflows, seemed to signal a new chapter in Nigeria’s refining capacity and self-sufficiency. Yet, this latest purchase of U.S. oil, facilitated by a supertanker from Chevron’s Gulf Coast facilities, suggests that the naira-based supply may not be meeting the refinery’s full demand.

This development comes at a time when Dangote’s ambitious refinery is intensifying its engagement with global crude markets, potentially adding to competition for oil among European and other international buyers. Meanwhile, a report from Sparta Commodities earlier this week indicated that lower shipping costs could have made U.S. crude relatively more attractive, potentially playing a role in the refinery’s decision to turn again to foreign suppliers.

The timing also coincides with an ongoing push by Aliko Dangote, chairman of the Dangote Group, to raise billions of dollars from commercial lenders, development banks, and oil traders to secure a steady flow of crude oil. A recent report noted that the refinery requires a minimum supply of 300,000 barrels per day to meet its operating capacity and continue producing refined products for both local and regional markets. Just this week, the plant commenced shipments of refined petroleum to West African nations, an indication of its operational readiness to play a pivotal role in reshaping fuel markets across the region.

Meanwhile, Dangote Industries’ Vice President of Oil and Gas, Devakumar Edwin, highlighted the significance of the refinery’s construction during a visit from the Senate Committee on Trade and Investment. Edwin took pride in the achievement, contrasting it with the reluctance of international oil giants to invest in large-scale refining within Nigeria. “Here, a Nigerian company took up the challenge which nobody like Shell or Chevron or ExxonMobil has ever done in any part of the world,” he stated, pointing to the plant’s status as the world’s largest single-train refinery.

During the same visit, Senator Sadiq Umar, the committee’s chairman, pledged legislative support, describing the $20 billion facility as a “national asset” that would receive ongoing backing from the National Assembly. He praised the refinery’s strategic importance, not only to Nigeria but to the broader West African region, where fuel supply challenges remain a persistent issue.

Located within Lagos’s Lekki Free Zone, the 650,000-barrel-per-day refinery began production in January, initially providing diesel and aviation fuel to the Nigerian market. In September, it expanded its output to include premium motor spirits (PMS), overcoming initial challenges with international oil companies (IOCs) who had reportedly resisted selling crude to the refinery. Following intervention by the Tinubu administration, the refinery started receiving crude in naira, positioning it as a linchpin in Nigeria’s ongoing efforts to reduce fuel imports and strengthen its energy security.

The return to U.S. crude, however, raises questions about the long-term feasibility of the naira-for-crude model, especially in the context of a fragile economy and fluctuating currency. While it remains uncertain whether this is a temporary measure or a sign of more structural issues with local supply, analysts suggest it could be a test of Nigeria’s capacity to meet rising demand domestically.