The shutdown of refineries across Europe and North America has tightened global fuel markets and handed Nigeria’s Dangote refinery greater leverage in shaping refined product balances, according to energy intelligence firm Kpler.
In a report, Kpler said the scale of refinery exits in Europe and North America has structurally altered supply dynamics, noting that “around ~900,000 bpd of capacity in the West of Suez was permanently removed from the system.”
According to the report, these shutdowns have had far-reaching consequences for global fuel supply, as the erosion of baseline capacity reduced operational flexibility and amplified the market impact of outages, keeping refined product balances tight and margins elevated through much of the previous year.
Kpler said the closures have been particularly significant for the Atlantic Basin, where the removal of European capacity has increased reliance on late-cycle mega-refineries to stabilise supply.
The Atlantic Basin enters 2026 at a structural inflection point. The permanent closure of nearly 800,000 barrels per day of refining capacity across Europe and North America has materially tightened product balances, particularly for middle distillates. Against this backdrop, the market’s ability to rebalance increasingly depends on the operational normalisation of two late-cycle mega-refineries, 650,000 bpd Dangote and 340,000 bpd Dos Bocas, both of which were designed to anchor regional supply,” the report said.
However, it was noted that Dangote’s influence has so far been limited, saying the refineries have so far “underdelivered” despite progress on unit commissioning.
Kpler said the combination of European refinery shutdowns and Dangote’s delayed ramp-up has tightened fuel markets further, increasing the market impact of any operational progress at the Nigerian plant.
