US’ December Base Oils Exports Stay Low Amid Mexico, India Slump

US base oils and lubricants exports stayed low in December, extending a seven-month slump in shipments and keeping pressure on domestic refiners heading into 2026.

Total base oils and lubricants exports came to close to 3.0 million barrels (421,000 tonnes) in December, up from a near-three-year low of 2.30 million barrels in November but down 20% year on year, Census Bureau data showed.

The sustained weakness in overseas demand increased the reliance on the recovery in domestic consumption to absorb more supply and limit a build-up of surplus volumes, especially at year-end.

Key Highlights

·         Monthly shipments held close to or below 3.0 million barrels for the fifth time in six months, after averaging close to 3.7 million barrels during the two years to June 2025.

·         Exports to Mexico fell 52% year on year in the second half of 2025, slashing flows to one of the largest outlets for surplus US base oils supply.

·         Fourth-quarter exports to India dropped to around 38,000 barrels, down from more than 155,000 barrels in each of the first three quarters of 2025 and the lowest in more than a year.

·         Total fourth-quarter exports slid to 8.6 million barrels, the lowest since 2022 and well below typical quarterly levels of more than 10 million barrels in the two years to mid-2025.

·         Full-year 2025 exports fell to around 40 million barrels, down 12% year on year and also the lowest since 2022.

Market Repercussions

The slump in shipments to Mexico and India — two of the US’ most important markets for surplus base oils  — put pressure on refiners to seek alternative overseas outlets.

That task has become harder as new base oils production capacity starts to come onstream across Asia, the Middle East, Europe and within the US itself, intensifying competition for export outlets.

Rising global supply instead increased the strategic value of a large, growing domestic market.

A sustained slump in the US’ domestic demand began to reverse from mid-2025, helping to offset the impact of weaker export flows and absorb surplus supply.

That recovery will need to hold.

Any further drop in exports, combined with mounting competition overseas, would increase pressure on refiners to rely even more heavily on sustained domestic demand growth.