The Dangote Refinery is set to construct 1.6 million-barrel fuel storage tanks in Walvis Bay, Namibia, aiming to supply petrol and diesel to several southern African countries.
Nigeria's Dangote Refinery, owned by Africa's wealthiest individual Aliko Dangote, has announced plans to build substantial fuel storage tanks in Namibia. The facility, with a planned capacity of 1.6 million barrels, will be located in the port city of Walvis Bay and is intended to supply petrol and diesel to Botswana, Namibia, Zambia, and Zimbabwe, with potential expansion to southern Democratic Republic of Congo.
This initiative, confirmed by sources briefed on the development and a Namibia Ports Authority official, underscores the Dangote Refinery's aggressive strategy to not only meet Nigeria's domestic fuel demands but also to establish a strong foothold in the broader African market and beyond.
The 650,000 barrels per day refinery, constructed at a staggering cost of $20 billion, commenced operations last year and has been steadily increasing its production output and exploring new markets. While the exact cost of the project remains undisclosed, construction is expected to commence shortly.
The expansion into southern Africa follows recent reports of Dangote's petrol cargo heading to Asia, marking the refinery's first foray into fuel sales outside the West African region. At full operational capacity, the Dangote Refinery aims to entirely satisfy Nigeria's fuel requirements, which has already led to a sharp reduction in the country's processed fuel imports, and export the surplus.
Meanwhile, the global oil market is experiencing significant volatility, with prices recently declining amidst escalating global trade tensions within the Organization of the Petroleum Exporting Countries and its allies (OPEC+). On Thursday, West Texas Intermediate (WTI) futures saw a drop of as much as 2.6%, trading below $67 a barrel. Similarly, Brent crude was trading at $68.90 per barrel.
The intensification of the US-led tariff war, spearheaded by President Donald Trump's latest round of tariffs, including a significant 50% rate on Brazil, has overshadowed previous trade deals and created an environment of uncertainty for global economic growth.
Adding to the complex geopolitical landscape, Houthi attacks in the Red Sea have resulted in the sinking of two cargo vessels and multiple fatalities. However, this escalation of maritime conflict has notably failed to inject a significant risk premium into oil prices, with investors appearing reluctant to factor in geopolitical developments after previous standoffs, such as those between the US and Iran, did not lead to major disruptions in energy infrastructure. The Dangote Refinery's strategic expansion into Namibia, therefore, occurs against a backdrop of both immense regional opportunity and considerable global economic headwinds.
