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Base oils imports hold at second-highest level in thirteen months on strong US flows
Group III base oils shipments rise to four-year high in 2025, accounting for growing share of Brazil's imports
Demand for overseas shipments could ease after higher imports boosted supply at end-2025
Brazil’s base oils imports stayed higher than usual in December for a second month, supported by a sustained flow of shipments from the US.
Total imports reached around 68,000 tonnes in December, easing from a fourteen-month high of almost 74,000 tonnes in November, government data showed.
The December volume was still the second-highest in thirteen months, highlighting the sustained pick-up in flows.
The elevated imports raised the prospect of supporting Brazil’s base oils supplies into the start of 2026, after the country flipped in November to its largest surplus in more than a year.
Key Highlights
· Imports from the US held at more than 50,000 tonnes for the third time in four months, after exceeding that level just once in the first eight months of 2025.
· The rise in US exports to Brazil partially cushioned the impact of a slowdown in shipments to Mexico.
· US exports to Brazil showed signs of easing in December, before picking up again in January.
· US supplies accounted for 79% of Brazil’s imports in December and 74% in 2025, down from 76% in 2024.
· Shipments from major Group III producers rose to a four-year high in 2025, boosting their share of Brazil’s total imports to 21%, the highest in at least five years.
· Rising Group III imports mirrored a broader global shift towards premium lubricants and the feedstock needed to produce them.
· The US could start to cover more of those requirements following an expected rise in US Group III base oils production capacity over the coming year.
Market Repercussions
The strong import flows in November and December could leave Brazil with larger surplus supplies at the start of 2026.
Any further softening in domestic lubricants demand would amplify rising inventories, contrasting with blenders’ preference to maintain lean stocks.
The dynamic could dampen import requirements from overseas sources just as US refiners face pressure to place surplus supplies during the winter months.
