The Dangote Refinery, a major player in the global oil industry, is projected to operate at its maximum capacity of 650,000 barrels per day (bpd) by the second quarter of this year. This significant development comes as China spearheads a surge in global oil demand, which is expected to rise by approximately two million bpd, reaching a total demand of about 103 million bpd.
According to a recent outlook by Wood Mackenzie, obtained by The Guardian, global refining capacity is set to witness a modest increase of 600,000 bpd this year. This increase is anticipated to be matched by high utilisation rates and the successful expansion of refining capacity in the Middle East.
The Dangote Refinery, in particular, is highlighted in the report as a game-changer for the industry. “The facility is expected to be ramped up successfully to its full capacity by the end of the second quarter, significantly impacting global oil refining dynamics,” stated Alan Gelder, Senior Vice President of Research at Wood Mackenzie.
According to a report by The Guardian, Gelder further emphasized the importance of economic factors such as easing interest rates and GDP rebalancing in sustaining the growth in distillate demand. He noted that the refinery’s yield of middle distillates, like jet and diesel/gasoil, will increase with the return of OPEC+ production and a heavier global crude slate.
The report, titled ‘Oil and Chemicals: Five Things to Watch in 2024’, highlights that China will account for over a quarter of the anticipated rise in crude oil demand. Besides China, emerging markets in Asia, including Indonesia, Vietnam, and Thailand, along with the United States, are expected to be key drivers of growth.
Gelder pointed out that most of this growth in oil demand is forecasted for the latter half of the year, driven by improving economic conditions and lower interest rates.
However, the report also cautions that oil supply might lag behind demand growth due to OPEC+ supply cuts. This restraint is critical to prevent a potential oversupply, particularly if demand growth falls short of expectations.
This development underscores the pivotal role of the Dangote Refinery in the global oil market, as well as the dynamic nature of global energy demand and supply.
