As travel activity ramps up ahead of the peak summer season, U.S. jet fuel imports surged to their highest levels in two years this past March. Analysts attribute this increase to a key factor: shipments from Nigeria’s Dangote refinery, the largest in Africa, which is reshaping global fuel markets and positioning itself as a major player in the Atlantic Basin.
A New Player in Global Fuel Markets
The Dangote refinery, with a capacity of 650,000 barrels per day (bpd), has begun making waves not only in domestic Nigerian markets but also on the global stage. This strategic facility is expanding beyond gasoline exports, making significant inroads into the U.S. jet fuel market and challenging established suppliers in Europe and North America.
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In March 2023, six vessels carrying approximately 1.7 million barrels of jet fuel from Dangote arrived at U.S. ports, according to ship-tracking data from Kpler. Additionally, the vessel Hafnia Andromeda is set to deliver a further 348,000 barrels to the Everglades terminal by the end of the month. This influx of jet fuel has pushed total U.S. imports to around 226,000 bpd, the highest level since February 2023.
Easing Aviation Fuel Prices
The implications of this surge are significant. Analysts and storage brokers suggest that these imports could help mitigate rising aviation fuel prices just as travel demand is expected to peak—critical for airlines facing tight operational margins. U.S. jet fuel stocks, which stood at 45.2 million barrels at the end of February—the highest for that month since 1999—offer a promising buffer as demand continues to grow.
A temporary shutdown of the Phillips 66 Bayway refinery in New Jersey created an unexpected arbitrage opportunity for Nigerian jet fuel, according to James Noel-Beswick, an analyst at Sparta Commodities. However, this window may be short-lived due to rising U.S. jet fuel inventories. Market dynamics suggest that Dangote’s involvement in U.S. fuel markets may not become a permanent fixture but rather an intermittent supplier during periods of high demand.
Impact on Storage and Future Consumption
The surge in imports has driven increased demand for jet fuel storage, particularly in Houston and New York Harbor. With U.S. refiners achieving record-high jet fuel yields last year, the trend of rising consumption is expected to continue. The U.S. Energy Information Administration (EIA) projects that American jet fuel consumption will reach an all-time high by 2026, driven by recovering travel patterns and seasonal demand.
Meanwhile, the Dangote refinery continues to scale its operations, sourcing crude from international markets to sustain its refining processes. Notably, over three million barrels of U.S. crude have been delivered to the refinery since the start of this month alone, highlighting not only a strong trade relationship but also the refinery’s growing influence on transatlantic fuel flows.
Nigeria’s Dangote refinery’s significant contribution to U.S. jet fuel imports in March underscores a transformative shift in global fuel markets. As the refinery strengthens its position, it is poised to challenge established fuel suppliers and reshape trade flows in the Atlantic Basin. This development will not only impact U.S. aviation fuel prices but also signal a shift in how energy is sourced and distributed globally. With the summer season approaching, the aviation industry will be closely monitoring how these changes influence operational costs and logistics.
