US’ June base oils exports to Europe fall

US base oils exports to Europe fell in June to a four-month low at a time when demand in the region was starting to face a seasonal slowdown.

A surge in shipments to Europe during the previous three months also cushioned the impact of the slowdown in June.

Base oils exports of 299,840bl (42,230t) to Europe in June fell by more than half from more than 760,000bl the previous month, government data showed.

The volume was the lowest since February and coincided with an almost complete halt in shipments from the district of San Francisco.

The US is a key source of premium-grade base oils for Europe.

The role has been even more important this year because of stronger demand in Europe for premium-grade base oils. The rise in demand coincided with a slump in base oils production in the Netherlands.

Record-high US base oil exports to Europe during the previous three months likely cushioned the impact of the slowdown in June supplies.

Even with the drop in supplies, US base oils exports of 1.71mn bl to Europe in the second quarter of the year was up 27pc from year-earlier levels and the highest since first-half 2018.

US base oils exports to Europe had been higher at that time as demand for premium grades rose and before the start-up of a new Group II plant in the Netherlands in 2019.

The drop in shipments in June preceded a seasonal slowdown in European demand during the summer months.

European base oils prices have faced downward pressure in recent weeks in response to more muted demand, easing supply tightness and lower crude prices.