A new report by Reuters reveals that the Dangote Petroleum Refinery retained 13% of Nigeria's crude oil exports for domestic supply in 2024. This development increased Nigeria's domestic share of oil exports from the previous year and slightly reduced exports to Europe. Despite being a major net exporter of crude, Nigeria imported 47,000 barrels per day of US oil in 2024, a trend uncommon for crude oil exporting countries.
The Nigerian National Petroleum Company Limited is expected to continue servicing its crude-for-loan obligations until 2029 as domestic refineries' demand for oil rises. The company's debt burden stems from various crude-for-loan agreements that have linked volumes of Nigeria's oil production to financial commitments.
The report also highlights that the Dangote refinery, along with new refineries in the global south, has impacted the global flow of crude amidst sanctions on Russian oil. The 650,000bpd capacity Dangote Petroleum refinery contributed to increased imports of Nigeria's crude from the United States, with the refinery receiving multiple shipments in 2024.
In 2024, global crude export volume experienced a two per cent decline, the first drop since the COVID-19 pandemic. This decline is attributed to weak demand growth and reshuffled trade routes due to conflicts, sanctions, and infrastructure developments in the oil industry.
Wars in Ukraine and the Middle East led to rerouting of tanker shipments, while sanctions on Russia and Iran prompted European and South American importers to seek alternative suppliers. European refiners decreased imports from Russia but increased purchases from the U.S. and the Middle East. Attacks on vessels in the Red Sea and other geopolitical tensions further influenced trade routes.
Changes in oil trade routes were also influenced by factors such as the expansion of Canada's Trans Mountain pipeline, falling oil output in Mexico, and disruptions in Libyan oil exports. India and China increased imports of Russian oil, while Europe and South America sought alternative sources.
