US’ July base oils exports to Europe rise

US base oils exports to Europe rebounded in July to the second-highest level in more than a decade at a time when lube demand in the region faced a seasonal slowdown.

Base oils exports of 710,500bl (100,070t) in July more than doubled from less than 300,000bl the previous month, government data showed.

The volume was the second highest since at least 2012. The highest volume since then had been in May.

The rise in shipments boosted total US exports to Europe to 3.73mn bl in the first seven months of the year.

The volume was up 9pc from 3.42mn bl during the same period last year and the second-highest level for that period in more than a decade.

US base oils exports to Europe had fallen in 2019 following the start-up of a new Group II base oils plant in the region at the beginning of that year.

Europe had previously been almost wholly reliant on the US for its Group II base oils requirements.

US exports to Europe fell further in 2020, when pandemic-related restrictions in the region cut demand.

US exports to Europe rose in 2021 amid a strong rebound in demand.

Exports extended that rise so far this year even as European lube demand ebbed in response to slowing economic growth.

The rise in shipments instead helped to meet an even larger drop in European base oils supply caused by plant maintenance work, lower refinery output and a slump in shipments of Russian origin.

The drop in supplies included lower output from Europe’s sole Group II base oils plant.

The rise in US shipments helped to cushion the impact of the fall in supplies and to boost availability of premium-grade base oils in the region.

The July shipments to Europe came as the supply tightness had begun to ease.

A seasonal slowdown in lube demand added to the pick-up in availability and to rising pressure on regional base oils prices.