US Aug base oils exports to Africa slump

US base oils exports to Africa fell to a six-month low in August amid a slowdown in shipments to Nigeria and South Africa.

Rising availability from other sources at competitive prices provided buyers in those regions with a growing number of alternative supply options.

Total US base oils exports of 2,210bl (310t) to Africa in August fell from 184,810bl the previous month to the lowest since February.

Even with shipments almost halting, total exports of 1.04mn bl to Africa in the first eight months of the year were more than double year-earlier levels of less than 480,000bl.

US base oils exports to the region had surged in the five months to July. The period coincided with unusually tight supply availability in Europe and a slowdown in shipments from Russia.

The two regions are typically key sources of spot shipments for markets like Nigeria.

The supply tightness in those regions eased during the third quarter of the year as base oils output rose in several key markets in Europe.

The rise in supply coincided with a seasonal slowdown in lube demand in that region. Waning economic growth compounded the slowdown.

European base oils prices fell in response to the improving availability of supply.

The trend boosted the competitiveness of European base oils prices compared with the US, where refiners’ posted prices only fell from September.

Surplus availability in other regions like Mideast Gulf added to supply options for buyers in markets like Nigeria.

Signs of rising supplies from Saudi Arabia to South Africa also added to competition in that market.

US base oils exports to India held at less than 1,000bl in August for a fourth month.

Exports of little more than 2,100bl to the country in the four months to August contrasted with shipments of more than 530,000bl to India in the previous four months to April.

The drop in shipments reflected the closed arbitrage to India from the end of the first quarter of the year.

Weaker consumption of very-light grade base oils in India compounded the drop in demand for supplies from the US.