Aliko Dangote's refinery is exporting less ship fuel as marine prices jump 76%

Fuel oil exports from Aliko Dangote's refinery outside Lagos have fallen while its shipments of petrol, diesel and jet fuel have risen, according to data from the commodity analytics firm Kpler cited by Reuters.

Fuel oil is the heavy residue left at the bottom of the refining process, and its main use is powering ships. The 650,000 barrel-a-day plant at Ibeju-Lekki is not simply making less of it. Dangote and other refiners can feed that residue back into secondary processing units and convert it into diesel, petrol and jet fuel, which sell for considerably more.

The incentive to do that has rarely been stronger. Very low sulphur fuel oil, the grade ships burn to meet international emissions limits, reached just under $825 a tonne in Singapore on Sept. 1, equivalent to $130 a barrel, according to the bunker pricing platform ZeroNorth. That is a rise of 76 percent since the Iran war began, against 40 percent for Brent crude over the same period.

"The extraordinary profitability of diesel" is pushing refiners toward upgrading heavy residue rather than selling it as marine fuel, market observer Sunil Reddy told Reuters.

Dangote is one participant in a shift running across the industry, and the market is tightening from several directions at once.

Industry estimates cited by Reuters put the third-quarter fuel oil deficit near 218,000 barrels a day, against 6,000 barrels a day in the same period last year. Stocks at the three main trading hubs, Singapore, Amsterdam-Rotterdam-Antwerp and Fujairah, sit roughly 30 percent below their three-year seasonal averages. Middle Eastern exports fell 45 percent between March and August compared with 2025, as attacks on Russian refineries and restrictions on Gulf tanker traffic removed further supply.

Asia will feel it most. Singapore is the world's largest bunkering hub and imports more than half of its roughly one million barrels a day of demand, according to Kpler.

Ships are also burning more fuel than they were. Vessels avoiding the Bab el-Mandeb strait and the Red Sea because of Houthi attacks sail considerably longer routes, which raises consumption at the same time supply is falling.

Marine fuel is among the largest costs a shipping line carries, and higher bunker prices eventually reach freight rates. That matters for African ports because the continent imports most of what it consumes by sea, from food and vehicles to machinery and manufactured goods.

The connection should not be drawn too tightly. Nothing indicates that Dangote's product mix has itself raised African freight rates. The refinery is one supplier in a global market being reshaped by two wars.

Nigerian seaborne exports of refined products have grown sharply since the plant came online. They rose from 46,000 barrels a day in 2023 to about 350,000 in the second quarter of 2026, according to United States Energy Information Administration figures drawn from Vortexa shipping data. Around 130,000 barrels a day went to Europe and close to 120,000 to other African countries.

Neither the refinery nor Dangote Industries announced the decline in fuel oil shipments, and monthly volumes have not been disclosed.