Dangote Refinery is ramping up Nigerian crude purchases as the Iran war disrupts global oil markets

The Dangote Petroleum Refinery is increasing its purchases of Nigerian crude oil as overseas buyers pull back from West African grades amid uncertainty over the resumption of oil shipments from the Middle East, Bloomberg reported on June 12, 2026, citing ship-tracking data and commodity market analysts.

The shift is having a direct effect on crude pricing across West Africa. Dangote's increased domestic buying has lifted premiums for Nigerian crude grades relative to Angolan grades, creating a divergence in the two countries' crude markets. Nigeria and Angola together form the backbone of West Africa's oil export market, but their crude grades have moved in opposite directions as the Iran war drags on and buyers reassess supply chains.

The dynamic reflects a broader realignment in global crude trade driven by the ongoing conflict in the Middle East. As uncertainty over Middle East oil flows has pushed some Asian buyers to reduce purchases of Atlantic Basin crude and position for potential resumption of Iranian and regional supplies, demand for West African grades in those markets has softened. Dangote's refinery, operating at an expanding scale, has stepped into the gap as a domestic buyer, absorbing Nigerian crude that might otherwise have been competing for Asian takers.

Mick Strautmann, market analyst at Vortexa, told Reuters that a clear shift toward regional barrels is underway. "We're seeing a clear shift toward regional barrels, with Dangote steadily increasing its share of Africa's seaborne fuel imports," he said.

The development represents a structural shift in Nigerian crude's commercial pathway. When the Dangote Refinery was planned and built at a cost of $20 billion in Ibeju-Lekki outside Lagos, one of the arguments made for it was that it would reduce Nigeria's exposure to the volatility of exporting raw crude and importing refined products. The refinery has validated that argument more quickly than most analysts anticipated. As global crude trade is disrupted by geopolitical events, the presence of a 650,000 barrel-per-day domestic refinery gives Nigeria an additional outlet for its crude production that insulates the country from the worst effects of overseas demand softness.

The refinery, owned by Aliko Dangote, Africa's richest man, has been processing at record levels. Process licensors certified a test run at 700,000 barrels per day in June, exceeding the nameplate capacity of 650,000 barrels per day for the first time. Dangote Industries vice president Devakumar Edwin confirmed that a new phase of construction has begun at the Lekki site for an additional facility capable of processing 700,000 barrels per day, which will bring the complex's total capacity to 1.4 million barrels per day by the end of 2028 and potentially make it the largest refinery in the world by any configuration.

Dangote Refinery CEO David Bird confirmed the refinery has built up a large surplus of jet fuel that it can supply to global markets, and said rising output is attracting growing interest from international crude suppliers and commodity trading firms. The refinery exports to African countries and Europe including the United Kingdom, France and the Netherlands, and has also shipped products to the United States and Saudi Arabia.

The refinery's crude sourcing has evolved significantly since it began production in 2024. At one stage it was sourcing approximately one-third of its crude from the United States, primarily West Texas Intermediate Midland grade, chosen for its higher gasoline yield relative to local Nigerian grades and its commercial availability as US-China trade tensions reduced Asian demand for American crude. That proportion of US crude is expected to decline as domestic Nigerian supply is increased. Two officials of the state-owned Nigerian National Petroleum Company Plc confirmed to Bloomberg that Nigeria is increasing the number of crude cargoes allocated to the Dangote Refinery to boost domestic supply of refined products as the Iran war disrupts traditional global energy routes.

The dual effect of reduced Asian demand for West African crude and increased Dangote domestic buying has positioned Nigeria more favourably in the short-term crude pricing environment relative to Angola, whose grades lack a comparable domestic refining buyer of equivalent scale.