Nigeria’s Dangote Refinery has sent its first shipment of low-sulfur fuel oil to Singapore, marking its entry into the Asian oil market. This is a critical step as the refinery begins to connect to worldwide markets.
This initial shipment establishes a new commercial route connecting the freshly completed refinery to Asia. Singapore, where the oil is headed, is a significant refueling port that requires a lot of low-sulfur fuel oil.
The refinery, which cost $20 billion to build, began operations in January. It can handle up to 650,000 barrels of oil products per day. When fully operational, it will be the largest refinery in Africa and Europe.
Since March, the refinery has exported more oil, primarily to the Americas and Europe. However, the most recent cargo indicates a shift toward Asia in response to changing European demand.
The first shipment to Asia is slated to reach Singapore on Wednesday. The ship, Front Brage, is carrying around 124,000 metric tons (787,400 barrels) of oil. Another cargo is scheduled for July, demonstrating the refinery’s commitment to supplying oil to Asia.
Lower demand in Europe prompted the move toward sending oil to Asia. Market data indicate that pricing in Asia are currently more favorable.
Although the specific price of this shipment was not disclosed, Dangote’s oil usually follows price levels established in Rotterdam.
Dangote’s oil is used not just to power ships, but also in several refinery processes. This demonstrates the importance of the refinery’s products in the global oil sector.
