Nigeria’s 650,000 b/d Dangote refinery has acquired its first cargo of Algeria’s Saharan Blend crude, a premium light sweet crude, from trading firm Glencore.
- Dangote refinery in Nigeria acquires first cargo of Algeria’s premium Saharan Blend crude from Glencore
- The deal signals a shift toward emerging markets and diversification of crude supply for Dangote refinery
- Refinery has been exploring long-term crude supply contracts from international markets, including the United States
The 1 million-barrel shipment is expected to arrive between March 15-20, marking a key step in Dangote’s crude supply diversification as it scales up production.
Argus, quoting market sources noted that Dangote bought the 1mn barrel cargo from trading firm, Glencore this week adding that the deal was not directly confirmed by either party and the price is unknown.
Saharan Blend, known for its high quality, boasts an API gravity of 45.3 and a low sulfur content of 0.1%, making it a highly sought-after grade.
Sourced primarily from the Hassi Messaoud region, it is one of Algeria’s top crude exports, traditionally supplied to European markets.
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However, this latest deal signals a growing shift toward emerging markets, with Nigeria’s Dangote refinery now tapping into Algeria’s premium crude to optimize its refining output.
According to Argus, tankers loaded in Algeria this February are not headed to Africa, suggesting the cargo for Dangote refinery will load in March.
A trader noted that Saharan Blend’s quality is well-suited for the refinery and is competitively priced compared to Nigerian crude grades.
Dangote Refinery’s hunt for crude oil
Beyond domestic sourcing, Dangote Refinery has been exploring long-term crude supply contracts from international markets, including the United States.
In September 2024, Dangote Refinery reached an agreement with the Nigerian National Petroleum Company Limited (NNPCL) for the supply of 15 cargoes of crude oil. However, only six cargoes were allocated by NNPC.
When the refinery approached International Oil Companies (IOCs) operating in Nigeria for additional supply, it was either directed to their international trading arms or informed that existing cargoes were already committed elsewhere.
“Consequently, we often purchase the same Nigerian crude from international traders at an additional $3-$4 premium per barrel which translates to $3-$4 million per cargo.” the refinery added
As a follow-up to the crude supply challenges, Dangote Refinery’s CEO and founder, Aliko Dangote, announced last year that the company would begin sourcing crude oil from other African oil-producing nations.
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“We will start importing crude oil from African countries. When we get to those countries, we’ll start negotiating with them and bringing in supplies from there,” Dangote stated.
He further emphasized that while the refinery has already purchased crude from the U.S. and Brazil, the scope will expand to include more African suppliers.
However, he noted that if crude oil were readily available in Nigeria, there would be no need to source from external markets.
