Dangote Refinery becomes key jet fuel supplier to U.S., eyes Europe

Nigeria’s Dangote refinery is making waves in global fuel markets, with its jet fuel exports to the U.S. hitting a two-year high in March, showing its growing influence beyond Africa.

Though the U.S. remains a key destination, the refinery is now turning its sights to Europe, potentially competing in the region’s supply chains.

Dangote’s 650,000-barrel-per-day (bpd) refinery has already shipped six vessels carrying 1.7 million barrels of jet fuel to the U.S. this month, according to ship-tracking service Kpler. Another vessel, Hafnia Andromeda, is expected to arrive at the Everglades terminal by March 29 with an additional 348,000 barrels.

Despite facing challenges at home and uncertainties amidst the sale of crude in foreign currencies rather than the initial agreement of local currency, the refinery is likely to become a regular jet fuel supplier to the U.S., pending a maintenance-related shutdown of the Phillips 66 (PSX.N) refinery in New Jersey, Sparta Commodities analyst James Noel-Beswick said.

The Dangote refinery started production last January after years of construction delays and ramped up to about 85% of capacity in early February, allowing it to sell more fuel to international markets.

Although the surge in U.S. imports was triggered by a maintenance-related shutdown of the Phillips 66 Bayway refinery in New Jersey, analysts believe Dangote’s presence in the international market is just beginning. Having successfully challenged European refiners in gasoline exports, the Nigerian refinery is poised to expand further into Europe’s jet fuel market.

With European refiners facing higher production costs and increasing competition, Dangote’s entry could drive down prices and disrupt traditional supply chains.

America will benefit from Dangote’s influx ahead of the peak summer travel season if imports go smoothly between Dangote and the North American country, Barsamian said to Reuters.

Meanwhile, U.S. demand for jet fuel storage has surged, with storage requests in Houston and New York Harbor for April reaching five to six times the usual monthly average, according to storage broker TankTiger.