The Dangote Petroleum Refinery, a 650,000 barrels per day (bpd) behemoth located in Nigeria, experienced a series of operational hiccups between April and May 2025, significantly impacting both domestic fuel production and international crude oil trade. These disruptions, specifically an unplanned outage of the refinery’s gasoline-making residual fluid catalytic cracking unit (RFCC), contributed to a decrease in Nigeria’s domestic fuel supply, prompting a ripple effect felt across global energy markets. Consequently, Nigeria’s crude oil exports, particularly to the United States, experienced a substantial surge. This dynamic underscores the delicate interplay between domestic refining capacity, international trade flows, and global energy prices.
The reduced fuel production at the Dangote Refinery forced Nigeria to redirect its crude oil, previously destined for domestic refining, towards the export market. This resulted in a significant increase in crude oil exports to the United States, reaching the highest level in nearly six years. According to the Energy Information Administration (EIA), quoted by Reuters, US crude imports from Nigeria rose from 358,000 bpd to 364,000 bpd in the week ending May 23, 2025. This surge in imports, directly correlated with the Dangote Refinery’s production challenges, highlighted Nigeria’s importance as a crude oil supplier to the US and the potential for fluctuations in its refining operations to impact global energy markets. The increase in imports contributed to a decrease in US crude inventories, defying analysts’ predictions of a rise. This unexpected drawdown in US crude stocks, coupled with the increased imports from Nigeria, further emphasized the interconnectedness of global oil markets and the impact of localized refinery disruptions.
The operational issues at the Dangote Refinery centered around the RFCC unit, a crucial component in gasoline production. This unit experienced two separate shutdowns: first, from April 7 to May 11 due to damage to a part of the unit, and again from May 15 to May 25 due to a mechanical issue. While refinery officials denied these reports, asserting continuous fuel loading operations, the coinciding increase in Nigerian crude exports to the US and the decrease in US inventories strongly suggest a disruption in the refinery’s output. The repeated shutdowns of the RFCC unit indicate potential teething problems at the newly commissioned refinery, which could continue to impact its production capacity in the near future. These operational challenges, coupled with the delays in the commissioning of other downstream units like the sulfuric acid alkylation unit and the polypropylene unit, further underscore the complexities of bringing such a large-scale refinery online.
The Dangote Refinery, hailed as Africa’s largest and one of the world’s biggest single-train refineries, carries immense significance for Nigeria and the global oil market. Its projected full capacity of 650,000 bpd is expected to revolutionize Nigeria’s downstream sector, transforming the nation from a net importer of refined petroleum products to a major exporter. This shift has the potential to reshape global fuel markets by increasing competition and potentially forcing the closure of smaller, less efficient refineries in other regions, notably Europe. The refinery also promises to enhance Nigeria’s energy security, create jobs, and boost economic growth. However, the recent operational challenges and the subsequent increase in crude exports underscore the importance of ensuring the refinery’s stable and efficient operation to realize its full potential.
Despite the initial setbacks, the Dangote Refinery has gradually ramped up production. It commenced diesel and aviation fuel production in January 2024 and began producing petrol in September of the same year. Although the refinery’s crude processing unit has been running at approximately 85% of its throughput since mid-March, the planned target of reaching full capacity before June 2025 was not achieved. This underscores the significant challenges involved in operating a refinery of this magnitude and the importance of addressing the technical issues that have hampered its progress. The reduced operating rate of the RFCC unit, combined with the delays in starting other downstream units, indicates that the refinery will likely continue to operate below its full potential for the foreseeable future.
The ongoing issues at the Dangote Refinery highlight the complexities of managing large-scale industrial projects, especially in the energy sector. While the refinery holds immense promise for Nigeria and the global oil market, realizing its full potential requires overcoming operational challenges and ensuring the stable and efficient functioning of all its units. The ripple effects of the refinery’s initial struggles, manifested in increased Nigerian crude exports to the US and a decrease in US inventories, underscore the refinery’s significant role in the global energy landscape. As the refinery works towards full capacity, addressing the technical issues and optimizing its operations will be crucial for maximizing its impact on Nigeria’s economy and the global oil market. The refinery’s journey towards achieving full operational efficiency is a critical factor to watch in the coming months and years, as its success will have far-reaching consequences for global energy markets.
