How Africa's Biggest Refinery Can Help US Crude Oil Purchases
The Crude Truth about the Permian supplying Africa Energy
Nigeria’s Dangote Refinery, Africa’s largest crude oil processing facility with a capacity of 650,000 barrels per day (bpd), is reshaping global oil trade dynamics. Located near Lagos, this $20 billion megaproject, spearheaded by Africa’s richest man, Aliko Dangote, began fuel production in 2024 and is nearing full operational capacity. Surprisingly, a significant portion of its crude supply comes not from Nigeria’s domestic fields but from the United States, particularly West Texas Intermediate (WTI) crude. This trend is boosting U.S. crude oil exports and could have lasting implications for American producers, refiners, and global energy markets. In this article, we explore how the Dangote Refinery’s appetite for U.S. crude is driving export growth, supported by export data visualized in charts.
The Dangote Refinery’s U.S. Crude Connection
Despite Nigeria being Africa’s top oil producer, its domestic crude output has struggled to meet the refinery’s needs due to underinvestment, oil theft, and aging infrastructure. In 2023, Nigeria produced approximately 1.4 million bpd but exported nearly 1.5 million bpd, leaving limited supply for domestic refining. The Dangote Refinery, designed to process a variety of crude grades, has turned to U.S. WTI crude—specifically WTI Midland—for its technical and logistical advantages. WTI offers higher yields of reformate and better gasoline blending capabilities, making it ideal for producing high-quality fuels.
In 2025, U.S. crude accounted for about one-third of Dangote’s feedstock, with WTI Midland being a primary grade. Bloomberg vessel-tracking data indicates that U.S. crude imports to Dangote surpassed Nigerian crude in June 2025, a significant shift for a country historically reliant on its own oil.
Posts on X from sources like @BloombergAfrica and @BusinessDayNg confirm this trend, noting Dangote’s tenders for millions of barrels of U.S. crude annually. While these posts reflect market sentiment, they align with reported data, though claims of specific tender volumes (e.g., 24 million barrels) require verification.
This reliance on U.S. crude is a boon for American producers, particularly in the Permian Basin, where WTI Midland is sourced. The U.S., the world’s largest oil producer at 21% of global output, exported 9.52 million bpd of petroleum in 2022, with crude oil exports at 3.58 million bpd. Dangote’s demand could further elevate these figures, strengthening the U.S. position as a net petroleum exporter since 2020.
Why U.S. Crude?
The preference for U.S. crude stems from both economic and technical factors:
Reliable Supply: U.S. shale production has surged, with the Permian Basin alone producing over 6 million bpd in 2024. Unlike Nigeria, where oil theft and pipeline vandalism disrupt supply, U.S. crude offers consistency.
Quality Advantage: WTI Midland’s light, sweet profile yields more gasoline and diesel, aligning with Dangote’s goal to produce surplus fuels for export.
Logistical Efficiency: U.S. Gulf Coast ports are well-equipped to ship large volumes across the Atlantic, reducing transit times compared to other suppliers.
Competitive Pricing: With global oil prices volatile (Brent at ~$75/bbl and WTI at ~$71/bbl in June 2025), U.S. crude remains cost-competitive, especially after factoring in Nigeria’s domestic supply constraints.
Impact on U.S. Crude Exports
To understand the scale of Dangote’s influence, let’s examine U.S. crude oil export data. The U.S. Energy Information Administration (EIA) provides comprehensive statistics on crude oil exports by destination, which we can use to gauge potential growth driven by Nigeria’s demand. Below, we present two datasets: U.S. crude oil exports to Africa (2018–2023) and total U.S. crude oil exports globally (2018–2023), highlighting Nigeria’s emerging role.
Chart 1: U.S. Crude Oil Exports to Africa (2018–2023)
The following table shows U.S. crude oil exports to Africa, with Nigeria as a key destination. Data is sourced from the EIA and reflects annual averages in thousand barrels per day (kbpd).
Chart 2: Total U.S. Crude Oil Exports Globally (2018–2023)
For context, here’s how U.S. crude oil exports have grown globally, with Africa as a small but growing share. Data is in million barrels per day (mbpd).
Note: Africa’s share is calculated based on total exports to Africa divided by global exports. 2023 data is estimated.
Implications for U.S. Producers and Global Markets
The Dangote Refinery’s demand for U.S. crude has several implications:
Boost for U.S. Producers: Permian Basin producers benefit from steady demand, supporting jobs and investment in shale oil. In 2024, the U.S. oil and gas industry employed over 600,000 workers, and export growth could further stimulate this sector.
Trade Balance Improvement: Increased crude exports to Nigeria reduce the U.S. trade deficit with Africa, where Nigeria and Angola are key commodity exporters.
Global Fuel Market Shifts: Dangote’s surplus gasoline and diesel exports, made partly from U.S. crude, are disrupting European fuel markets, traditionally reliant on Nigerian imports. This could lower European refining margins.
Geopolitical Stability: By diversifying Nigeria’s crude supply away from domestic constraints, U.S. exports help stabilize Nigeria’s fuel market, reducing the risk of shortages and protests that have plagued the country.
Challenges and Risks
While the outlook is positive, there are risks:
Domestic Pushback in Nigeria: Some Nigerian stakeholders criticize Dangote’s reliance on U.S. crude, arguing it undermines local production. President Bola Tinubu has met with regulators to ensure domestic crude supply, which could reduce U.S. imports.
Global Oil Price Volatility: A significant drop in oil prices (e.g., below $60/bbl) could make U.S. crude less competitive, especially if Nigerian production rebounds.
Environmental Concerns: The refinery’s emissions (part of the global 1.3 gigatonnes CO2 from refining in 2018) and potential spills raise local concerns, which could lead to regulatory hurdles.
The Crude Truth
The Dangote Refinery’s pivot to U.S. crude oil is a game-changer for U.S. producers, driving export growth and deepening transatlantic energy ties. As the refinery approaches full capacity, its demand for WTI Midland could push U.S. crude exports to Africa beyond 150 kbpd, with Nigeria as the primary buyer. The provided charts and data illustrate this trend, offering readers a clear view of the numbers behind the story. For U.S. oil companies, the message is clear: Africa’s biggest refinery is open for business, and American crude is fueling its rise.
Just the thought of private oil producers in the Permian Basin selling oil to a refinery in Africa is very cool.
How do you see Dangote’s U.S. crude purchases shaping global oil markets? Let me know in the comments.