Interestingly, even though Nigeria is a significant net exporter of crude, it still imported 47,000 barrels per day of U.S. oil in 2024, which experts find unusual for oil-exporting nations.
The Dangote refinery, along with other new refineries in the global south, has changed the dynamics of crude oil distribution, especially with the sanctions on Russian oil and ongoing conflicts in the Middle East.
With a capacity of 600,000 barrels per day, the Dangote refinery played a role in increasing Nigeria's crude imports from the U.S. Nairametrics noted that the refinery received its first shipment of U.S. WTI in November 2024.
The multiple shipments from the U.S. to the Dangote refinery led to a rise in Nigeria's imports from the U.S. in 2024, especially since the Nigerian National Petroleum Company couldn't supply crude to the refinery.
According to Reuters, global crude export volumes dropped by 2% in 2024, marking the first decline since the COVID-19 pandemic. This was due to sluggish demand growth and changes in trade routes caused by conflicts, sanctions, and new pipelines and refineries.
The wars in Ukraine and the Middle East have caused significant rerouting of tanker shipments, while sanctions on Russia and Iran pushed European and South American importers to look for new sources.
After the start of the war in Ukraine, European refiners cut back on Russian imports and increased their purchases from the U.S. and the Middle East. However, attacks on vessels in the Red Sea due to the conflict in Gaza led to higher shipping costs from the Middle East, prompting refiners to turn to the U.S. and Guyana instead.
Iraq experienced a decline in exports by 82,000 barrels per day (bpd), while the United Arab Emirates reported a reduction of 35,000 bpd. In contrast, Europe increased its imports by 162,000 bpd from Guyana and 60,000 bpd from the United States. While Europe and South America have turned away from Russian oil, India and China have welcomed it.
Several factors influencing the reconfiguration of oil trade routes include the expansion of Canada’s Trans Mountain pipeline to the west coast, a decrease in oil production in Mexico, and a suspension of oil exports from Libya.
Forecasting the global oil market for 2025 remains challenging. Suppliers express uncertainty regarding China's oil demand in the upcoming year, although some analysts anticipate an increase in demand from India.
Moreover, it is expected that more countries will reduce their oil consumption in the coming years as they shift towards gas and renewable energy sources.
Additionally, it remains uncertain whether President-elect Donald Trump will ease sanctions on Iran and Russia.
"This level of uncertainty and volatility has become the new normal—2019 was the last year of stability," stated Erik Broekhuizen, a marine research and consulting manager at Poten & Partners, in an interview with Reuters.
The Dangote Refinery stands as the largest single-train refinery in both Africa and Europe, with a production capacity of 600,000 barrels per day. However, it is not yet operating at full capacity. In addition to meeting domestic needs, the refinery exports Premium Motor Spirit to several African nations, including Cameroon, Angola, Ghana, and South Africa, as well as diesel and jet fuels to Europe.
According to the National Bureau of Statistics, Nigeria's crude oil exports were valued at N14,559.56 billion, accounting for 74.98% of total exports in the second quarter of 2024.