David Bird, chief executive officer of Nigeria's Dangote oil refinery, said fuel shortages are likely to continue well past the end of the U.S. war with Iran. He pointed to physical damage to refineries and the subsequent need to rebuild inventories as reasons markets will take longer to stabilize.
Bird described an industry that entered the Iran conflict with refinery utilization rates already high. He said refineries in the Middle East have faced delayed maintenance and have sustained war-related damage while attempting to meet elevated demand levels. Those conditions, he said, reduce immediate spare capacity and extend the timeline for normalization.
In addition to damage, Bird noted that countries are discussing supply security and moving to increase stock levels. Those policy decisions add another layer of demand as inventories are rebuilt, which in turn lengthens the period required for global markets to return to balanced supply and demand.
Dangote's own business has benefited from disruptions tied both to the U.S.-Iran tensions and to the war between Russia and Ukraine. According to Bird, these conflicts have impaired refining capacity in some regions and interrupted exports, contributing to worldwide shortages of gasoline and diesel.
Operationally, the Dangote refinery is preparing to double its output to match the capacity of the Jamnagar Refinery in India. The company also has plans to develop a second refinery in Kenya, part of an expansion strategy aimed at increasing refining throughput.
On the financial front, Dangote reported a first-half after-tax profit of $1.82 billion, disclosed in an IPO prospectus released on Monday. That result represents a reversal from a $476 million loss reported for the previous full year.
Context and implications
Bird's comments emphasize two drivers that will delay market normalization: physical damage to processing infrastructure and the replenishment of national and commercial stockpiles. Both factors reduce near-term spare capacity and extend the horizon for rebalancing global fuel markets.
While the company is pursuing significant capacity growth and new projects, Bird's assessment underscores that rebuilding refining capability and inventories will take time, regardless of individual companies' expansion plans.