Preliminary data from Kpler reveals that West Africa is poised to receive a record 730,000 barrels per day (bpd) of gasoline from Europe this month. This surge in imports, if fully realized, would mark a remarkable increase of over 70% compared to January and represents the highest volume since tracking began in early 2017. The bulk of these shipments are destined for Nigeria, the continent's most populous nation.
Europe's surplus gasoline production makes it a significant supplier to West Africa, as the region benefits from relatively low European prices. While Europe also exports to the United States, subdued demand and ample inventories in the U.S. have contributed to the downward pressure on European fuel prices.
The recent convergence of Eurobob gasoline barges and Brent crude futures to a two-month low in early January further incentivized the flow of European gasoline to West Africa. Analysts attribute this trend to favorable pricing differentials, particularly compared to counterparts in the U.S. and Asia.
Additionally, disruptions in Red Sea shipping have led to an abundance of cheap naphtha in Europe. This surplus naphtha, typically destined for Asia Pacific, has remained in the region, further enhancing the availability of gasoline blendstocks.
Notably, West African imports from the Netherlands, Europe's largest refinery hub, reached nearly 140,000 bpd in February, the highest level since April 2023. However, tighter regulations imposed by Dutch authorities last year have tempered export growth, and similar restrictions expected in Belgium may further impact future shipments to West Africa.
Looking ahead, the anticipated commissioning of the Dangote oil refinery in Nigeria, albeit delayed, is poised to alter Africa's reliance on European imports. While the refinery remains in its testing phase, its eventual operation is expected to reduce the region's need for European gasoline products.
In conclusion, West Africa's record-high gasoline imports underscore the region's strategic reliance on European markets, driven by favorable pricing dynamics. However, evolving regulatory landscapes and domestic refining capacities are poised to reshape the dynamics of West Africa's energy trade in the near future.
