Weak European Demand Drives Dangote Refinery’s First Low-Sulfur Fuel Oil Shipment to Singapore

Date:

Dangote Refinery is poised to dispatch a shipment of low-sulfur straight-run fuel oil (LSSR) from Nigeria to Singapore this week, marking its entry into the Asian market. According to ship tracking data and market sources, this shipment establishes a new trade route from the recently opened refinery to Asia, which has a consistent demand for low-sulfur fuel oil for refueling ships at Singapore, the world’s largest bunker hub.

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The Dangote Refinery, which commenced operations in January following a $20 billion investment, has the capacity to process up to 650,000 barrels of products per day. Once fully operational, it will be the largest refinery in Africa and Europe. Since March, the refinery has ramped up its LSSR exports, primarily shipping cargo to the Americas and Europe, based on ship tracking data from Kpler and Vortexa.

The inaugural shipment to Asia is scheduled to arrive on Wednesday. The Glencore-chartered vessel, Front Brage, will deliver approximately 124,000 metric tons (787,400 barrels) of LSSR to Singapore. Market sources indicate that the cargo was redirected to Asia due to weaker demand in Europe. Data from LSEG shows that the east-west spread for front-month 0.5 percent LSFO, reflecting the price difference between these regions, remained above $40 per ton this week.

Dangote’s LSSR cargoes are priced against Rotterdam’s 0.5 percent LSFO quotes on a free-on-board basis, though the specific pricing differential for this shipment was not disclosed by market sources.

Another LSSR shipment from the Dangote refinery, carrying around 157,000 tons, is expected to reach Singapore in July aboard the vessel Stena Suede, according to ship tracking data.

LSSR is typically blended with other fuels to produce low-sulfur fuel oil (LSFO) for bunkering or used as feedstock in various refinery processes. In February, Dangote began exporting oil products and started purchasing crude oil, primarily from the Nigerian National Petroleum Company (NNPC) Ltd, in December 2023.

Godwin Okafor, The Naija247news
Godwin Okafor, The Naija247newshttps://naija247news.com
Godwin Okafor is a veteran Financial Journalist, Internet Social Entrepreneur, and the visionary Founder of Naija247news Media Limited. With an extensive career spanning over 16 years in financial journalism, Godwin possesses a wealth of experience that seamlessly bridges both traditional and digital media landscapes. His journey in journalism commenced at Business Day, Nigeria, where he laid the foundation for his prolific career. In 2010, Godwin took a bold step by founding Naija247news Media, a platform that has since become a prominent player in delivering timely and accurate news. Educationally, Godwin Okafor holds a Bachelor's degree in Industrial Relations and Personnel Management from the prestigious Lagos State University, Ojo, Lagos. His commitment to continuous learning led him to the Lagos Business School, where he further honed his skills. Additionally, he is recognized as a Fellow of the University of Pennsylvania, having successfully completed the Wharton Seminar for Business Journalists. Throughout his illustrious career, Godwin has earned acclaim by winning numerous journalism awards, a testament to his dedication to excellence in reporting. Beyond his role as a Financial Journalist, Godwin Okafor wears the hat of the Chairman at Emmerich Resources Limited, the publishing entity behind Naija247news. His visionary leadership has played a pivotal role in shaping the media landscape and establishing Naija247news as a trusted source of information. Godwin Okafor's multifaceted expertise, commitment to journalistic integrity, and leadership in the realm of business journalism underscore his influential presence in both the media and entrepreneurial spheres.

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