India Snaps Up Nigerian Crude as Dangote Refinery Turns to US Oil

India’s state-run refiners are increasing purchases of Nigerian crude, even as the $20bn Dangote Petroleum Refinery in Lagos leans heavily on imports from the United States to power its operations.

Industry sources told Reuters that the Indian Oil Corporation recently acquired one million barrels of Agbami crude for September delivery through global trader Trafigura, as part of a wider shift toward sourcing from non-Russian suppliers. Bharat Petroleum Corporation Ltd (BPCL) also secured Nigerian cargoes through private negotiations for September arrivals.

In total, over two million barrels of Nigerian crude are set to be shipped to India for September and October, alongside other grades such as Angola’s Girassol, US Mars, and Abu Dhabi’s Murban.

This shift comes after India scaled back Russian oil purchases in late July under pressure from the US, marking a partial departure from the steep discounts that had drawn Indian refiners to Russian crude since 2022.

Dangote’s American tilt
While Indian refiners ramp up Nigerian imports, the Dangote refinery—Africa’s largest—has quietly increased its reliance on US-sourced crude.

Data from Kpler, a global commodities analytics firm, shows that in July, US grades accounted for about 60% (370,000 barrels per day) of Dangote’s total intake of 590,000 bpd, with Nigerian grades making up the remaining 40% (220,000 bpd), largely consisting of Amenam, Bonny Light, and Escravos.

This is the first time American crude has overtaken Nigerian supply in the refinery’s feedstock mix. Kpler attributes the shift to competitive US pricing, challenges in securing adequate domestic crude, and weak demand for certain US grades in Asia.

Dangote’s domestic sourcing difficulties have been an open issue, with the refinery and other local operators citing poor compliance with Nigeria’s Domestic Crude Supply Obligations.

Operational performance and exports
The refinery ran at about 85% of capacity in July and aims to ramp up to 700,000 bpd, which would raise potential gasoline output from 300,000 bpd to 322,000 bpd. Dangote Group President Aliko Dangote recently claimed the facility has turned Nigeria into a net exporter of refined products, with around 1 million tonnes of petrol exported between early June and late July.

Most gasoline output is sold domestically, while some volumes, along with jet fuel, have been exported to destinations including Oman, Ivory Coast, and parts of Europe.

However, analysts caution against expecting the refinery to hit and sustain full capacity before late 2026, citing possible maintenance downtime and mechanical constraints. Kpler also flagged “ongoing operational challenges” at the refinery’s 204,000 bpd Residue Fluid Catalytic Cracking (RFCC) unit, which has faced technical issues since January.

To optimise gasoline yields, Dangote has been importing condensate naphtha—around 22,000 tonnes monthly—to supplement feedstock for its hydrotreater.

Broader oil sector trends
Nigeria’s crude and condensate output averaged 1.75 million bpd in July, the highest three-month average in more than five years, helped by rising onshore production and fewer pipeline disruptions. Local producers such as Seplat and Renaissance Africa Energy are investing in new drilling and restarting shut-in wells to boost output in 2025.

Infrastructure is also expanding, with Green Energy’s Otakikpo terminal completing its first crude export in June—the first privately built onshore export facility in Nigeria in over 50 years.

Despite these gains, Kpler projects Nigeria’s production to hover around 1.65 million bpd for the rest of the year, with no major new fields expected to come onstream soon.