US’ Nov base oils exports to Africa rise

US base oils exports to Africa rose to a four-month high in November amid a resumption of arbitrage shipments to Nigeria.

The cargo was the first such shipment to Nigeria since July. It was also likely to be the last for a while.

Rising supply and lower prices in Europe from the start of the third quarter of last year boosted shipments to Nigeria from that market instead.

A resumption of shipments from the US in November likely reflected more competitive prices as suppliers sought to clear surplus volumes before year-end.

It also followed a slowdown in shipments from Europe to Nigeria in October.

The shipment of additional volumes from the US to west-coast Africa early this year was unlikely in view of the US market’s more limited surplus supply at the end of last year.

A resumption of US shipments to the region would be more feasible if European base oils prices rebounded in the coming months in the same way that they did in first-half 2022.

Total US base oils exports of 130,380bl (18,360t) to Africa in November rose from 107,400bl the previous month to the highest since July, government data showed.

Most of the October supplies moved to South Africa and likely consisted mostly of term volumes.

Almost all of the November supplies moved to Nigeria and likely consisted of spot volumes.

The November shipment likely consisted mostly of Group I base oils.

Earlier shipments to Nigeria in 2022 had also consisted of Group II base oils. The supplies reflected the US’ large surplus supply of Group II base oils during the first few months of 2022.

The lack of Group II base oil shipments to Nigeria during the final months of last year partly reflected the closed arbitrage for those supplies.

It also reflected the smaller-than-usual surplus availability of the product at the end of the year following a protracted round of US plant maintenance work.