Dangote refinery data trends in light of startup

Monitoring Dangote imports with Kpler

While the market is aware that there exists a deal with the U.S. to provide the Dangote refinery with Midland crude for a year, the flows represent an important signal for the global markets. One can observe with Kpler’s data that there has been an increase in the stability of U.S. imports to Dangote specifically, implying that they will be a continual partner thereby providing the market with a degree of certainty in this crude supply.

In fact, if one looks at Kpler’s real time on the ground crude oil storage, one finds that the Dangote refinery has inventory which has predictably shot up in recent months. Worth noting is that just until May this year Dangote experienced an inventory rise to 6.02 MMbbl and subsequently a draw down to 5.13 MMbbl at the time of this writing. 

One can continue this analysis with Kpler’s supply & demand model. When viewing the current data, the model produces some significant recent developments. The model bears out that Nigeria’s net balance dropped significantly from March to April 2024, due to the significant refinery run increase from 88 kbd in March 24 to 254 kbd in April 24. This shift quickly normalized in terms of levels, but Kpler’s projection shows the net balance continuing to decrease in the coming months as runs increase due to the ramp up of the Dangote refinery. This trend can be seen clearly with Kpler’s refinery run metrics below and contains implications for the wider crude oil market. As Nigerian crude comes off the global market, there will be increasing demand driven by the Dangote refinery.

One can continue to investigate the refinery’s performance and the implications for the wider market by using Kpler’s refineries intelligence model that takes into account its proprietary data, but also is informed by a partnership with IIR. Below one can see that there will be a slight increase in Diesel production this coming month, but the larger implication is that the refinery will produce its largest total of overall refined product to date.

This in turn represents a steady increase of the refining operations of Dangote, which will certainly have major implications on the crude market across the West African region and the interplays with the Northwest European market as the vacuum in Nigerian exports begins to be felt across these refiners in Europe.