The Dangote refinery’s expansion to 1.4 mbpd by 2028, doubling its current output, is expected to reshape regional trade dynamics in the Atlantic basin. As European refinery runs decline amid a wave of closures, Dangote’s growing output could redirect diesel flows and position it as one of Europe’s major suppliers. With the reduction in US refinery runs, a majority share of diesel flows to Europe is likely to shift toward long-haul LR shipments from West Africa, reducing the reliance on MR cargoes from the US. Moreover, the Dangote refinery will capture the European gasoline export market in West Africa, which will be negative for product tankers as it will shift long-haul routes to short-haul routes. Dangote refinery’s plan to ramp up capacity from 650,000 bpd to 1.4 mbpd by 2028, effectively doubling output, will alter refined product trade across the Atlantic basin. The expansion is expected to proceed without major delays, supported by the company’s financial strength, operational experience gained from commissioning the world’s largest single-train refinery, and its planned 2026 public listing.
Assuming Phase 2 maintains a similar yield structure to Phase 1, Nigeria’s surplus of refined products would also double, positioning Dangote as a key regional exporter at a time when Atlantic supply hubs are weakening.
Europe’s contracting refinery runs create a gap and an opportunity for Dangote
European refinery throughput is set to shrink further amid a wave of plant closures, widening the region’s structural deficit in diesel and reducing export availability of gasoline and middle distillates. Meanwhile, US refinery activity has also lowered, limiting Europe’s access to Transatlantic diesel supply and increasing its dependence on longer-haul cargoes from the Middle East and Asia. As a result, Nigeria will emerge as a dominant supplier.
Gasoline market: West Africa pivot could hit tonne-miles
Currently, West Africa is the largest destination for European gasoline and a vital diesel intake region. Once Dangote reaches its full expanded capacity, it could displace Europe as the primary supplier of refined products to neighbouring West African markets.
Shorter voyages from Nigeria will replace the current long-haul shipments from Europe, reducing tonne-mile demand on LRs and shifting more trade to MRs operating within West Africa. This intra-African redistribution is likely to erode one of Europe’s most important gasoline export outlets.
North Africa’s imports may also shift
A reduction in Europe’s export surplus will also hamper trade flows to North Africa. If West African supply becomes more abundant and competitively priced, North African buyers may increasingly source gasoline from Dangote. Unlike the West African shift, this would replace short-haul intra-Med routes with longer West Africa–North Africa voyages—benefiting LR tonne-mile demand.
Diesel market: Nigeria to emerge as the new supplier of Europe
In diesel, the key variable is Dangote’s ability to consistently produce Euro-compliant, low-sulphur grades. If the refinery achieves this expansion capacity by the completion of Phase 2, it will be capable of structurally rerouting Atlantic diesel flows.
Europe’s diesel deficit is expected to widen as refinery closures accelerate, while demand declines more slowly than refinery runs. Following the Red Sea crisis, Europe relied heavily on US barrels rerouted via the COGH. However, with US refinery runs weakening, Europe will increasingly turn to the Middle East and Asia for imports, adding tonne miles and increasing cost.
Nigeria turns out to be a competitive alternative
Nigeria’s location offers a shorter, more economical supply option for Europe than both the Middle East and the US. As Dangote scales up, Nigerian diesel could replace much of Europe’s Transatlantic import volumes, reducing US-to-Europe MR employment and redirecting flows to long-haul LR routes from West Africa.
This marks a dramatic reversal: A region long dependent on European fuels could become a dominant supplier of Europe.
Conclusion
Dangote’s expansion will have mixed effects across the product tanker market.
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- Negative for tonne-miles: European gasoline flows to West Africa will reduce and shift to intra-African MR trades.
- Positive for tonne-miles: West Africa supplies more gasoline to North Africa and diesel to Europe, supporting LR utilisation.
Source: Drewry
