Dangote Refinery has emerged as Europe's largest jet-fuel supplier, overtaking the United States in June 2024, as global conflicts reshape fuel trade flows and create opportunities for new market entrants. The 650,000-barrel-per-day refinery in Lagos supplied more than 466,000 tonnes of jet fuel to Europe in June, helping Nigeria surpass the US as the region's largest external supplier that month, according to S&P Global Commodity Insights data.
US and Indian Refiners Boost Exports Amid Supply Disruptions
Refiners in the United States and India have increased fuel exports as disruptions affect supplies from Russia and the Middle East, according to Reuters, citing government data, shipping records, analysts and traders. The supply squeeze has forced major fuel-importing countries to seek alternative sources of diesel, petrol and aviation fuel.
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 also reached 443,000 barrels per day, close to the record 455,000 barrels per day recorded in May.
India has similarly strengthened its position, with export-focused refiners such as Reliance Industries and Nayara Energy maintaining high utilisation rates to meet shortages across Asia.
Dangote Refinery's Jet-Fuel Breakthrough
The Dangote Refinery has become one of the biggest beneficiaries of changing global trade flows. The facility processed more than 700,000 barrels per day during a performance test conducted by its process licensors in June, according to the company. The figure demonstrates its technical capacity but does not mean the refinery consistently operates at that level.
Kpler data showed 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 emerged as a particularly strong export product. Dangote 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 that month, according to S&P Global Commodity Insights data. Kpler data showed the refinery delivered more than 400,000 tonnes to Europe in July, accounting for about 20% of the continent's jet-fuel imports, according to a report by Business Insider.
Dangote Refinery CEO David Bird said in August that the facility was Europe's largest jet-fuel supplier in both June and July.
Wars Reshape the Fuel Trade
The surge comes as conflicts disrupt major petroleum supply routes. The conflict involving Iran has affected production and shipping in the Middle East, while attacks linked to the Russia-Ukraine war have disrupted Russian refineries and export facilities. Russia has also extended restrictions on fuel exports until January 2027.
Brazil, previously a major buyer of Russian diesel, imported 196,000 barrels per day from the US in July, more than twice its June volume. Meanwhile, global refinery throughput fell to about 89 million barrels per day in July, around five million barrels below the level recorded a year earlier, according to the International Energy Agency.
With global oil demand still above 100 million barrels per day, tighter refined-product supplies have pushed margins higher. US diesel margins exceeded $102 per barrel on Monday, Reuters reported.
Opportunities and Challenges for Dangote Refinery
Dangote is well positioned to benefit because its Lagos location keeps it outside the main conflict zones while giving it access to Atlantic shipping routes and Nigeria's crude resources. However, the advantage may not last indefinitely.
US refiners are increasing shipments to Europe and Latin America, Indian refiners are supplying Asian markets, while 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.
For Dangote, jet fuel could remain its strongest opportunity, particularly as limited African demand leaves the refinery with volumes available for international markets. Yet the current boom is being driven partly by extraordinary global 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 the refinery prepares for a potential public offering. The company has applied to raise as much as $5 billion, although the final size has not been determined. Dangote has proved that an African refinery can compete in one of the world's toughest fuel markets, but the bigger challenge will be holding onto its European foothold when the global supply crisis eventually eases.
