As Dangote Refinery ramps up production, its latest crude purchase highlights a broader shift in global oil trade dynamics.
The refinery has secured its first one-million-barrel cargo of Algeria’s Saharan Blend from Glencore, with delivery expected between March 15 to 20.
Market sources from Argus have confirmed that Dangote Refinery has successfully purchased its first shipment of Algeria’s Saharan Blend crude from trading firm Glencore.
However, despite this significant development, neither Dangote nor Glencore has provided official comments, and they have yet to disclose the price.
Shifting Trade Dynamics
Typically, Algeria exports Saharan Blend—renowned for its API gravity of 45.3 and ultra-low sulphur content (0.1%)—to European markets.
However, with this latest deal, the dynamics are shifting.
Dangote is now actively seeking premium crude from alternative sources to enhance its refining output.
Moreover, a trader emphasised that Saharan Blend’s superior quality and competitive pricing make it a strong alternative to Nigerian crude grades, further strengthening its appeal.
Challenges In Domestic Crude Supply
At the same time, Dangote continues to navigate significant challenges in securing domestic crude supply.
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In September 2024, the refinery reached an agreement with NNPCL to receive 15 cargoes.
However, despite initial commitments, NNPCL allocated only six.
Consequently, when Dangote approached International Oil Companies (IOCs) in Nigeria for additional supplies, the companies either redirected it to their global trading arms or revealed that their existing cargoes were already committed to other buyers.
Expanding Global Sourcing Strategy
As a result, Dangote has had to expand its crude sourcing strategy aggressively, turning to international markets such as the United States.
Now, with this new Algerian deal, the refinery is taking another critical step towards securing a reliable feedstock.
Ultimately, this move reinforces Dangote’s commitment to maintaining operational stability, optimising production, and meeting Nigeria’s rising fuel demand.
Going forward, as Dangote Refinery continues scaling up, global energy markets will closely monitor its evolving crude procurement strategy, eager to see how it shapes future trade dynamics.
