Dangote expands crude sourcing with Brazilian supplies

Market: Crude oil
18/03/25

Nigeria's 650,000 b/d Dangote refinery has tapped the Brazilian crude market for the first time as it expands its global reach with a diversified crude slate and further reduces dependency on domestic grades.

Sources told Argus Dangote bought a 1mn bl shipment of medium sweet Buzios this week for delivery between 25 March–5 April, from trading firm Vitol. The equity producer of the Buzios shipment was said by sources to be China's CNOOC. Details on price levels were kept under wraps.

Brazilian grades typically trade as a differential to North Sea Dated in the month of delivery. European buyers took less Brazilian supply for delivery in April than in March, as refiners turned to competitively priced Mediterranean grades, according to traders.

Buzios for April delivery to Europe was priced at around a $2/bl premium to the average of Dated in the month of delivery. Key medium sweet Nigerian grades Forcados and Escravos were assessed on a fob basis at a $1.70/bl and a $1.50/bl premium to Dated, respectively, with shipping costs yet to be added. This makes Brazilian supplies more appealing despite a much longer voyage.

Around 30pc of Buzios exports, or 96,000 b/d, found an outlet in China in 2024, according to data from Vortexa, while 22pc went to Spain and 14pc to Portugal.

Dangote's purchase of Buzios comes as the refinery looks to widen its crude procurement strategy and reduce dependency on supplies from Nigeria. The refinery could be considering other west African grades, sources with knowledge of the matter said.

Refinery sources told Argus in January that Dangote will source at least 50pc of its crude needs on the import market, and it is building eight storage tanks to facilitate this. The tanks will add 6.3mn bl of storage capacity to around 12mn bl in place, serving as a buffer for the additional shipping times compared to domestic grades.

Dangote has of late diversified its crude sources to include a broad array of regions. Last week it bought a first cargo of Equatorial Guinea's medium sweet Ceiba, for loading over 12-13 April from BP, after an earlier purchase of Algeria's light sweet Saharan Blend from trading firm Glencore arriving over 15-20 March.

Dangote recently bought 2mn bl of US light sweet WTI for arrival over 10-20 April from Glencore, sources said.

On purchases closer to home, the refinery has bought 950,000 bl cargoes of April-loading Amenam, Yoho, Qua Iboe and Egina from state-owned NNPC. This is unconfirmed.

By Sanjana Shivdas and Lina Bulyk

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State of emergency after Nigeria pipeline attack:Update

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