Argentina’s base oils supply rose to a nine-month high in May amid still-elevated domestic output, a rebound in imports and a pause in exports.The dynamic pointed to a sustained incentive to maintain high domestic Group I base oils output, with firm overseas demand providing a regular outlet to clear any surplus volumes.Any slowdown or pause in shipments to overseas markets by contrast supported a recovery in domestic supply in response to any signs of tighter-than-expected availability.The strategy worked while overseas demand for Group I base oils held firm and supply tight.Any softening of Group I supply-demand fundamentals in overseas markets could instead complicate those moves.Argentina’s base oils output held firm at 13,500 cubic meters (12,000 tonnes) in May and at average levels of more than 14,300 cubic meters/month in the three months to May, government data showed..The volume was up from around 10,000 cubic meters/month in 2024 and 7,500 cubic meters/month in 2023.The higher output in 2024 contrasted with a sustained drop in the country’s lube consumption.Falling consumption at that time boosted the attraction for blenders to procure smaller volumes more regularly from domestic sources rather than from overseas markets.The higher output in more recent months coincided with an unusual surge in the country’s base oils exports to markets like Brazil and Nigeria.Firm buying interest in markets like West Africa partly reflected the tight availability of Group I supplies in Europe.An extension of that dynamic could sustain firm demand for Group I supplies from Argentina, supporting domestic output at higher levels.The dynamic could conversely flip into reverse in response to tighter domestic supply or any improvement in Group I supplies from Europe or from other sources.Such a scenario materialized in April, when an extension of Argentina's high exports added to a fall in the country’s base oils stocks to an eighteen-month low.Argentina’s base oil exports then paused in May, magnifying the impact of high domestic output that month.The country’s supply got a further boost in May from a rise in base oils imports to more than 10,600 cubic meters.The volume was the highest in nine months and consisted almost entirely of supplies from the US.Even with the rise in imports, Argentina’s domestic output accounted for more than half the country’s total base oils supply of more than 24,000 cubic meters in May.The last time that imports consistently accounted for more than half of Argentina’s supply was in late-2023..Brazil’s May base oils supply matches demand .US April base oils exports to S America stay high.Argentina’s April base oils supply falls
