Argentina’s March Base Oils Supply Lags Demand

Argentina’s base oils supply stayed low in March, lagging a marked rise in demand and shrinking the country’s buffer against supply disruptions emerging from end-February.

Total supply, or output and imports combined, came to 12,500 cubic meters (11,000 tonnes) in March, holding at the same level as February but down 42% year on year, Ministry of Economy data showed.

Falling demand in recent years reduced supply requirements and led buyers to rely more on domestic output.

The increasing self-sufficiency cushioned the country against expected supply disruptions over the coming months.

The recent pick-up in demand, especially in March, could begin to test that strategy.

Key Highlights

·         Base oils output made up 80% of total supply as domestic production edged up while imports fell to a four-month low.

·         Domestic output accounted for 69% of total supply in the first quarter, up from 56% in the fourth quarter of 2025.

·         The US accounted for more than 93% of total imports in the first quarter, up from 79% in the previous quarter.

·         Rangebound supply in February and March contrasted with a surge in demand, leaving a shortfall for the first time in four months.

Market Repercussions

Steady supply alongside surging demand mirrored a pattern across other markets, where buyers responded faster to expected supply disruptions than refiners and importers.

The mismatch supported short-term stock-building but accelerated the drawdown of upstream supplies.

Concerns about supply security and tighter overseas availability could prompt moves to raise domestic output or trim exports.

Any such moves had yet to materialize by April, when a large base oils cargo was exported to Brazil.

The shipment pointed to sufficient domestic availability, allowing suppliers to take advantage of stronger prices in overseas markets.