The petrol producing unit at Nigeria’s massive 650,000 barrel-per-day Dangote refinery has been taken offline, with repairs expected to take at least two weeks.
According to two sources familiar with the matter who spoke to Reuters, the shutdown is due to catalyst leaks and other technical issues.
Industry monitor IIR Energy confirmed the outage in a note, stating that the refinery’s crucial 204,000 bpd Residue Fluidized Catalytic Cracking Unit (RFCCU) has been offline since around August 29.
“The sources requested anonymity to discuss confidential information,” the report noted. A request for comment from Dangote was not immediately responded to.
This development marks another operational challenge for the facility which has sharply ramped up operations since it opened last year, significantly reshaping global oil and fuel trade flows. Despite its profound impact, “the refinery has also struggled with frequent outages,” the Reuters report said. This is not the unit’s first problem; in May, Reuters reported that the plant’s RFCCU “was expected to run at lower rates through October after a string of issues earlier this year.”
The timing and anticipated length of this current outage are having a tangible effect on international fuel markets. The situation is “weighing on petrol availability in the Atlantic Basin, lifting U.S. refiners’ profit margins on the fuel,” market sources said.
This is occurring despite the recent unofficial end of the U.S. summer driving season. Demonstrating this impact, “The U.S. petrol futures crack spread – the difference in the price of the fuel versus the price of crude oil – gained nearly 3 per cent on Wednesday to the highest level since August 19. It had jumped more than 8 per cent on Tuesday.”
In a related development within the global oil industry, the Organisation of Petroleum Exporting Countries (OPEC) also bolstered its crude production last month. According to a Bloomberg survey, “OPEC raised output by 400,000 barrels a day — roughly the amount planned — to 28.55 million barrels a day.” The survey showed that group leader Saudi Arabia, which is working to manage a budget deficit, “accounted for just over half of the increase.”
The cartel and its partners, a group known as OPEC+, have been fast-tracking the return of shuttered production in recent months in a concerted bid to reclaim global market share. However, this strategy comes with risks. “The extra barrels have so far only put modest downward pressure on crude prices, but threaten to unleash a major surplus in the coming months,” according to the International Energy Agency (IEA). International benchmark Brent futures are down 9 per cent this year, trading near $68 a barrel in London.
Officials from the group are scheduled to hold a video conference on Sunday to assess world markets. “They will hold a video conference on Sunday to assess world markets, and may review another layer of idle supply — amounting to 1.66 million barrels a day — which is currently designated to remain offline until the end of 2026,” the report stated.
Furthermore, according to two sources who spoke to Reuters, “eight OPEC+ members will consider further raising oil production at a meeting on Sunday,” as the group continues its strategy to regain market share amid pressure from consumers like U.S. President Donald Trump to lower oil prices.
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