The Dangote refinery, recognized as the largest on the African continent, has commenced exporting petrol and urea to African countries experiencing supply shortages due to the ongoing conflict involving Iran. Aliko Dangote, the refinery's owner, stated on Monday that the facility, operating at its full capacity of 650,000 barrels per day, is helping to alleviate the effects of the international crisis within Nigeria and across Africa.
During a tour of the refinery located on the outskirts of Lagos, Nigeria's commercial hub, Dangote assured that the facility possesses the capability to supply petrol to Nigerians, as well as consumers in West, Central, and East Africa. He further disclosed that approximately 17 shipments of petrol have been dispatched to other African countries, with recent increases also observed in urea fertilizer exports as buyers actively seek alternative supply sources.
Dangote noted a shift in export focus, stating, "In the last couple of days, we’ve been looking to mostly African countries, which we were not doing before," referring specifically to fertiliser shipments, although precise figures were not provided.
The refinery has the production capacity for up to three million metric tons of urea annually, with a significant portion typically exported to the United States and South America, according to officials.
Despite the increased output, fuel prices in Nigeria, an oil-producing nation, have reached record highs. Industry data suggests that the maximum output from the Dangote refinery has not been sufficient to counteract the impact of elevated crude oil prices.
Dangote expressed the refinery's interest in acquiring more crude oil cargoes priced in local currency as a strategy to help reduce fuel costs. According to two trade sources and a refinery official who spoke to Reuters last week, the Nigerian National Petroleum Company Limited (NNPC) is slated to allocate seven May cargoes to the Dangote refinery, an increase from the five cargoes provided in preceding months.
Meanwhile, oil prices saw a slight increase in fluctuating trade on Monday. Traders are closely monitoring developments in the talks between the U.S. and Iran, while remaining cautious about potential sustained supply reductions stemming from shipping disruptions. Brent crude futures rose by 0.1 percent to $109.13 a barrel, and U.S. West Texas Intermediate (WTI) crude futures climbed 0.69 percent, or 77 cents, to $112.31 per barrel.
Reports indicate that the U.S. and Iran have received a preliminary framework for a plan to de-escalate hostilities. However, Iran has reportedly rejected the immediate reopening of the Strait of Hormuz, a critical shipping route, following threats from President Donald Trump regarding potential severe consequences if a deal was not reached by Tuesday. Iran has also communicated its positions and demands in response to recent ceasefire proposals relayed through intermediaries.
The Strait of Hormuz, a vital passage for oil and petroleum products from Iraq, Saudi Arabia, Qatar, Kuwait, and the United Arab Emirates, has been largely impassable since Iranian attacks on shipping commenced following the outbreak of war on February 28. Despite this, shipping data from Thursday onwards has shown some vessels, including an Omani-operated tanker, a French container ship, and a Japanese gas carrier, successfully navigating the strait. This suggests Iran's policy of permitting passage for ships from countries it considers more amicable, as reported by Reuters.
The disruptions in Middle Eastern supply chains have prompted refiners to seek alternative crude sources, particularly for physical cargoes in the U.S. and the North Sea. The premiums for spot West Texas Intermediate crude have surged to unprecedented levels due to competition among Asian and European refiners.
On Sunday, OPEC+ announced an agreement for a modest production increase of 206,000 barrels per day for May. Saudi Arabia also set the official selling price for its May Arab Light crude oil destined for Asia at a record premium of $19.50 a barrel above the Oman/Dubai average, representing an increase of $17 from the previous month, as confirmed by Aramco.
Concurrently, Iran rejected a 45-day ceasefire proposal on Monday, advocating for a permanent end to the conflict. This occurred amidst reports of Israeli attacks on a major gas field and the looming deadline set by President Trump for the opening of the Strait of Hormuz.
Mojtaba Ferdousi Pour, the head of Iran's diplomatic mission in Cairo, stated that Iran would only accept an end to the war with assurances against future attacks. He also expressed a lack of trust in the Trump administration, citing past U.S. military actions against Iran during previous negotiation rounds.
Iran's state-run IRNA news agency reported that Tehran conveyed its response through Pakistan, a country actively involved as a mediator.
Despite these developments, a regional official involved in the talks indicated that negotiations had not completely broken down, stating that discussions were ongoing with both parties, speaking anonymously to preserve the confidentiality of diplomatic efforts.
President Trump intensified his rhetoric against Iran, remarking at a press conference that the country could be "taken out in one night, and that night might be tomorrow night."
Iranian and Omani officials are reportedly collaborating on a framework for managing the strait, through which approximately one-fifth of the world's oil is transported during peacetime. Iran's control over this waterway has significantly impacted the global economy. Tehran has denied passage to U.S. and Israeli vessels since the commencement of hostilities on February 28.
News of Iran's rejection emerged while President Trump was addressing an Easter event at the White House, and it remains unclear if he was immediately aware of this development.
Trump further elaborated on his stance regarding Iran, suggesting a desire to seize the country's oil if he had the option, though acknowledging the U.S. public's preference for troop withdrawal. When questioned about Tuesday evening being his final deadline, Trump responded affirmatively.
Emmanuel Addeh
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