Refining is a spread business, with profitability driven by the difference between product prices and crude costs. Complexity, crude flexibility and location determine how much of this spread a refinery can capture. Refining margins reached record highs in July–August 2026, with the US 3-2-1 crack at around $70–72/bbl at the peak and still at acute-stress levels of roughly $63–65/bbl in September. Refinery outages, offline Gulf capacity, reduced Russian refining capacity and permanent US closures have tightened product supply, making refining capacity rather than crude scarcity the key constraint.  

Against this backdrop, a medium-term capacity wave remains a key consideration. The IEA expects approximately 4.2 mb/d of new refining capacity by 2030, partly offset by around 1.6 mb/d of closures, leaving net additions of about 2.6 mb/d—above projected product-demand growth. This points to continued pressure on high-cost Atlantic Basin refineries and the potential for further capacity rationalisation. At the same time, refining demand is increasingly shifting toward non-OECD markets, including Africa, where population growth, urbanisation and relatively low EV penetration provide a different demand backdrop from mature OECD markets. 

The report identifies Dangote’s 700,000 b/d refinery as the most consequential development for West African refining, transforming Nigeria from a major fuel importer toward net-exporter status and reshaping Atlantic Basin trade flows. Dangote is already exporting jet fuel to Europe and gasoline as far as the US, reducing the traditional role of European and US Gulf suppliers in the region. The report highlights four factors to watch: the pace and location of new global refining capacity, Dangote’s domestic crude-supply security and pricing/monopoly dispute, African demand growth relative to the energy transition, and the return of offline Gulf and Russian refining capacity—which will influence how long current product-side margins remain elevated.

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