OPEC: Increase in Dangote refinery petrol production will put pressure on European market

The Organisation of the Petroleum Exporting Countries (OPEC) says the increase in petrol production at Dangote refinery will put pressure on the European market.

In its monthly report published on Wednesday, OPEC said improved oil production from the Dangote refinery would most likely weigh heavily on the European market, which is already facing subdued demand and oversupply concerns.

The oil cartel highlighted that Dangote refinery, which recently exported its first batches of petrol to the international market, is contributing to the growing petrol surplus in Europe.

OPEC said the Amsterdam-Rotterdam-Antwerp (ARA) trading hub, which has already experienced an increase in petrol inventories, combined with seasonal demand pressures, added to the surplus of petrol in the region.

With the Dangote refinery now producing petroleum products for both domestic consumption and export, OPEC predicts that Nigeria’s increased petrol output will free up additional volumes for international markets, necessitating adjustments in trade flows and destinations.

“The ongoing recovery in gasoline refinery output levels will likely exacerbate the already bearish market sentiment,” OPEC said.

“Moreover, the ongoing operational ramp-up efforts at Nigeria’s new Dangote refinery and its first gasoline exports to the international market likely weigh further on the European gasoline market. 

“Continued gasoline production in Nigeria, a country that has relied heavily on imports to meet its domestic fuel needs in the past, will most likely continue to free up gasoline volumes in international markets which will call for new destinations and flow adjustments for the extra volumes going forward.”

In 2024, the Dangote refinery was a major highlight in Nigeria’s oil industry.

On January 12, 2024, Dangote Refinery commenced production of diesel and aviation fuel.

Nine months later, the refinery began petrol production.

On December 11, 2024, Dangote refinery exported its first petrol shipment to Cameroon.