US’ April base oil exports hold firm

US base oil exports held firmer than usual in April even as they slumped from the previous month.

Exports had surged in March to their highest in more than a decade on the back of a wave of arbitrage shipments.

Export flows returned to more typical levels in April following the clear-out of those surplus supplies.

Total exports of 1.85mn bl (260,850t) in April fell from a more-than 10-year high of 2.34mn bl the previous month, government data showed.

The volume was still up 16pc from year-earlier levels and above average exports of 1.72mn bl/month in 2021.

US base oil exports held at firm levels even as surging diesel prices and tight middle distillates supply incentivized refiners to maximise production of the motor fuel. The supply and price dynamic raised concern that base oils supply would tighten.

Supply of spot volumes has tightened. The export flows in April suggested most of the shipments were to cover term commitments in core markets like Europe.

There was instead a sharp fall in exports to markets that typically attract surplus arbitrage cargoes.

The lack of spot shipments mirrored a similar trend in Europe, especially for overseas buyers. The drop in availability left increasingly exposed those buyers that relied more on spot shipments to cover their requirements.