NNPC Allocates Six Million Barrels Of Crude To Dangote Refinery Amid Surge In U.S. Imports.
The Nigerian National Petroleum Company (NNPC) has allocated six cargoes of crude oil, totalling approximately six million barrels, for delivery to the Dangote Petroleum Refinery in June 2025. This move comes as the refinery prepares to receive an unprecedented nine million barrels of U.S. West Texas Intermediate (WTI) crude, highlighting efforts to stabilise operations amid persistent feedstock supply challenges.
The NNPC’s June shipments include one medium sweet grade, Escravos, and four light sweet grades: Bonny Light, Brass River, Okwuibome, and Yoho. This allocation is part of a government-backed six-month supply agreement allowing Dangote to pay in naira, addressing months of supply shortages that have hampered the refinery’s operations. The agreement aims to bolster the refinery’s capacity to meet Nigeria’s domestic fuel demand and reduce reliance on imported petroleum products.
In parallel, Dangote is significantly increasing its imports of U.S. WTI crude, with plans to bring in nine million barrels in June, a sharp rise from a single shipment in May. The deliveries will be managed by traders Vitol and Petraco. Vitol will supply three shipments, each carrying two million barrels, while Petraco will deliver four million barrels, including one via a Suezmax vessel. This surge in U.S. crude imports underscores Dangote’s strategic shift to diversify its feedstock sources amid global market dynamics.
Pricing data for May reveals that Escravos was pegged at $1.63 per barrel above Dated Brent, while Bonny Light carried a 48-cent premium. These prices are now closely aligned with WTI, even before accounting for freight costs. In comparison, WTI commanded a 90-cent premium over North Sea Dated when delivered to Europe in May. While exact June pricing for Dangote’s imports remains undisclosed, the rates are believed to be comparable, reflecting competitive global crude markets.
The global crude oil surplus has created challenges for Nigerian producers, with cheaper alternatives like Kazakhstan’s CPC Blend offering a $3.20 per barrel price advantage over Nigerian crude in May. Despite higher shipping costs, CPC Blend has attracted refiners seeking cost-effective options. Sluggish demand in Europe, where some refineries are operating below capacity, and in Asia, where light crude oversupply persists, has further pressured Nigerian crude exports. Europe’s WTI intake is expected to drop to 1.5 million barrels per day in June, positioning Dangote as a key buyer for U.S. suppliers.
The Dangote Refinery, Africa’s largest, has faced ongoing hurdles in securing consistent crude supplies since commencing operations. The NNPC’s allocation and the influx of U.S. crude are critical steps to ensure steady production, particularly as Nigeria aims to reduce its dependence on fuel imports. The refinery’s ability to process both local and imported crude is expected to enhance its output of petrol, diesel, and jet fuel, supporting Nigeria’s energy security goals.
Industry analysts view the NNPC’s move as a positive signal of government support for the refinery, though questions remain about the sustainability of naira-based payments amid Nigeria’s foreign exchange constraints. The increased reliance on U.S. crude also highlights the competitive pressures facing Nigerian producers in a saturated global market.
As Dangote ramps up operations, the refinery’s role as a major buyer of U.S. crude and its partnership with the NNPC could reshape Nigeria’s oil industry landscape. Stakeholders will be closely watching how these developments impact domestic fuel prices and the broader economy.
