CommoditiesIn plain sightWednesday 30 September 2026, 00:40
What the Gulf cannot sell, refiners in Africa and Asia now make
Diesel’s premium over crude reached a monthly record in September. BloombergNEF expects Africa and Asia to account for 95% of new refining capacity to 2030, led by Nigeria’s Dangote.
By The Notebook Desk
A barrel of diesel on the US Gulf Coast sold for an average of $92.80 more than a barrel of Brent crude in September, up to the 22nd. That is the widest monthly gap since the EIA’s series began in 2006, and more than six times the average for 2019. The gap is a rough measure of what a refinery earns for turning crude into diesel.
The reason is the Gulf. Before the war, its refineries exported large amounts of fuel. Now much of that fuel cannot leave, and some of the plants are damaged. Buyers pay whoever can still make fuel, and they have begun to build refineries of their own. BloombergNEF expects Africa and the Asia-Pacific region to account for 95% of the growth in global refining capacity to 2030, Semafor reported.
What the Gulf cannot sell
The fuel trade has taken a heavy hit. Exports of oil products from key suppliers have fallen by 30%, or about 4 million barrels a day, since the conflict began, according to S&P Global Energy data cited by The National. Shipments of jet fuel through Hormuz and the Bab al-Mandeb strait were down 88% in August from February.
Some of the capacity is gone for now. Bahrain’s Bapco declared force majeure after an attack on its 380,000 barrel-a-day Sitra refinery, and the 140,000 barrel-a-day Pearl gas-to-liquids plant in Qatar stopped after a strike on Ras Laffan. “Crude is surplus globally, but there is no refining capacity available to refine it and bring it to market,” Nikhil Agarwal of Globestar Energy said at a conference in Dubai. “That’s why there is a disparity between crude price and the finished derivatives.”
The same pattern shows in the tanker data. Crude exports from the Gulf are back near 80% of their pre-war level, but a barrel of crude is of little use to a country that has no refinery to process it.
Who gains
The clearest winner so far is in Lagos. The Dangote refinery, which started in 2024, can now process 700,000 barrels a day, above its nameplate capacity of 650,000, the company said. It sells fuel to several African countries and to Britain, France, Spain, Italy and the Netherlands, and its jet fuel has even reached Saudi Arabia.
The profits have followed the margins. Dangote made an after-tax profit of $1.82bn in the first half of 2026, against a loss of $476m for the whole of 2025, according to its IPO documents. Aliko Dangote acknowledged that the refinery had profited from supply disruptions linked to the conflicts in the Middle East and Ukraine, but said that its investments are for the long term. The company plans to spend $14.3bn to double capacity to 1.4 million barrels a day by 2029. That would make it one of the largest refining complexes in the world.
Nigeria is not alone. BloombergNEF expects Africa to add the equivalent of half of the continent’s existing capacity by 2030, led by Dangote. China and India account for more than two-thirds of the capacity that it expects the world to add in 2026 and 2027. Europe and the US, by contrast, face more closures.
Why it may outlast the war
Half of the growth that BloombergNEF expects is already operating or under construction, so much of it was planned before the war. What the war changed is the case for it. High margins pay for new plants, and a country that has run short of diesel once has a reason to make its own.
That is the part that is easy to miss. When Hormuz reopens, crude will flow back first and fuel later. Agarwal expects “a steep, steep fall” in the first quarter of 2027, but he says that refining capacity “will not come back so soon”. By the time the Gulf’s refineries can ship freely again, some of their old customers will be making fuel at home. A country with its own refinery imports crude instead of diesel. For Gulf exporters, some of the fuel market lost in the war may not come back.
What to watch
The Dangote share offer runs until 13 October, and the shares are due to start trading in Lagos in late November. The diesel premium is the number to follow for the refiners: a fall towards its 2025 level would suggest that the Gulf’s plants are back, and a rise would suggest that they are not.
Disclosure
This is analysis and opinion, not investment advice.