How the Dangote and the Dos Bocas refineries will affect prices in Europe and US

• The Dangote refinery and the Dos Bocas refinery in Mexico will affect facilities in the US and Europe
• The Organisation of Petroleum Exporting Countries (OPEC) said that the two refineries will significantly affect the European  and the US markets
• The Dos Bocas refinery is a 340,000bpd-capacity refinery, and the Dangote facility can process 650,000 barrels per day

Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.

The Organisation of Petroleum Exporting Countries (OPEC) has revealed that the take-off of Dangote’s refinery in Nigeria and Dos Bocas refinery in Mexico would impact US and European plants.

Until now, the two countries and other African countries were the major destinations for petrol produced in the US and Europe.

Chairman of the Dangote Group. Aliko Dangote Credit: Bloomberg/Contributor
Source: Facebook

The US and European markets to be affected

Findings show that the Dos Bocas plant is a 340,000 bpd-capacity refinery, thus making Mexico self-sufficient in refined petroleum products.

Nigeria’s Dangote Refinery is a 650,000 bpd-capacity refinery to meet the petrol needs in Nigeria and West Africa.

OPEC revealed in its latest 2024 World Oil Outlook for 2050 that new mega projects are set to change the international downstream market. The organisation stated that the start of the Dangote refinery in Nigeria and the beginning of commercial operations of the Dos Bocas refinery in Mexico could affect the petrol market in the Atlantic basin.

OPEC said:

“Although both regions import significant volumes of gasoline from the international market, this could change when these two refineries reach full operation. This could negatively affect refineries in the US, especially Europe, as gasoline markets stagnate in these regions.”

Oil prices affected by geopolitics

According to the oil cartel, geopolitics still influences the downstream market and related trade dynamics. The EU embargo on Russian crude and product exports has changed inter-regional oil flows, with the EU raising crude oil imports from regions such as the US and the Middle East.

OPEC revealed that product imports of non-Russian origin also grew, especially from India, the US and the Middle East.

It said that newly commissioned plants in the Middle East, such as Jizan in Saudi Arabia and Duqm in Oman, have also begun exporting diesel to the EU

OPEC predicts effect of Dangote refinery on Europe

Legit.ng previously reported that the OPEC has predicted that Nigeria’s Dangote Refinery will impact Europe’s oil industry, especially in the Northwest European gasoil market.

The 650,000 bpd-capacity refinery in Nigeria is expected to disrupt traditional diesel and jet suppliers, putting pressure on Europe’s refined petroleum product market.

In its June Oil Market Report, OPEC identified the Dangote Refinery as a crucial player among global suppliers. Potential production increases are expected to challenge Europe’s reliance on established sources.

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Source: Legit.ng