Mexico’s December Lube Demand Rises; US Export Link Strengthens

Mexico’s lubricants demand rose in December for the first time in three months, while base oils imports extended a seven-month surge – deepening structural shifts in trade flows with the US.

Mexico’s lubricants consumption rose to more than 55,000 kilolitres (49,000 tonnes) in December, up 8% year on year, INEGI data showed.

The recovery lagged the pace of the rise in the country’s base oils imports but reinforced an increasingly strong correlation with US base oils exports to Mexico.

Key Highlights

·         Automotive lubricants consumption rose 15% year on year, offsetting weak industrial oils demand that extended its decline for a twentieth straight month.

·         Full-year lubricants demand fell 3% to 673,000 kilolitres, extending its slide for a third straight year to the lowest level since 2020.

·         Mexico’s base oils imports jumped 25% year on year in December, extending a surge that began in mid-2025 and contrasting with weak shipments through most of the first half of 2025.

·         Rising imports coincided with a slump in US base oils exports to Mexico since July.

·         The diverging trends left imports accounting for a growing share of US exports to Mexico.

·         Imports accounted for more than 78% of US base oils exports to Mexico in October and November, with the share accelerating further in December.

·         The share rose from less than 35% in the year to June 2025.

·         Lubricants consumption accounted for more than 46% of US exports in November and December, up from less than 25% in the first half of 2025.

Market Repercussions

The strengthening correlation between US base oils exports and Mexico’s lubricants consumption and base oils imports since mid-2025 points to structural or regulatory changes that have remained in place.

The dynamic suggests that Mexico’s finished lubricants consumption has become the primary driver of US supply requirements, replacing alternative demand channels that previously supported higher export flows.

An extension of the trend could leave US base oils exports to Mexico structurally lower than in recent years.

But the increasingly tight link between domestic demand and US export volumes suggested that that the fall in shipments may have bottomed out, while any extended pick-up in consumption would boost requirements for additional US supplies.