US base oils imports rose to a one-year high in April as a surge in shipments from the Middle East countered a drop in supplies from Asia.Imports of 1.37 million barrels (193,000 tonnes) in April rose from 970,300 barrels the previous month, government data showed.Imports still fell by 11% and for a twelfth month from year-earlier levels.Almost 95% of the shipments originated from countries producing Group III base oils.The pick-up in imports mirrored a rise in US base oils exports to a four-month high in April.The rise in exports coincided with plant maintenance work that added to a drop in Group II supplies in the US market.The rise in imports of Group III base oils and drop in supplies of Group II base oils coincided with a seasonal pick-up in domestic demand in the US market at the start of the second quarter of the year.The trend pointed to growing domestic consumption of Group III base oils and the still-high share of consumption covered through imports of Group III base oils.The dynamic boosted the incentive for US refiners to produce more Group III base oils.The dynamic also showed signs of going too far at the start of the second quarter of the year.The premium of US Group III base oils relative to Group II prices narrowed steadily since the middle of last year. The premium then slumped in April and through the second quarter of the year to the lowest since early-2020.US Group III prices also fell sharply during the second quarter relative to prices in other markets like Europe and Asia.The trend boosted the incentive for refiners in markets like the Middle East to move more Group III supplies to those other markets.There were some signs of such moves, raising the prospect of a drop in flows to the US over the following months.Any slowdown in base oils shipments from the Middle East would follow a surge in US imports from the region to almost 950,000 barrels in April.The volume rose from typical levels of less than 500,000 barrels/month over the past year to the highest in nineteen months.The surge in shipments outweighed a fall in imports from Asia to less than 200,000 barrels in April. The volume was the lowest in more than three years.The slowdown mostly reflected a drop in shipments from South Korea, where a major Group III unit underwent around 40 days' maintenance work in March and April..US’ April base oils exports rise
