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US base oils and lubricants demand rose to a four-year high in March, with domestic consumption year-on-year growth running at 85% across the five months to March
Exports rebounded to a nine-month high, magnifying the pick-up in total demand
Consumption could ease in the coming months as blenders’ high stocks, elevated prices and demand destruction curb requirements
US base oils and lubricants demand surged to a four-year high in March as seasonal consumption and supply-disruption stock-building coincided with higher prices and stronger overseas demand.
Domestic demand rose to 4.03 million barrels (567,000 tonnes), the highest since October 2022, EIA data showed.
Exports also rose a nine-month high amid a pick-up in surplus shipments arranged before the market disruptions from end-February.
The rise in exports added to a surge in total demand to a four-year high of 7.46 million barrels.
The surge in demand highlighted the overlap between seasonal consumption gains, aggressive stock-building, and the reliance of major overseas markets on US supply.
Key Highlights
· Domestic consumption rose 81% year on year, extending a nine-month growth streak that countered a slump in exports.
· Demand rose by 37% in the nine months to March, with the pace accelerating to 85% in the last five months.
· Total demand rose 18% year on year and for a fifth straight month, with the pick-up in exports adding to already-strong domestic consumption.
· Exports’ share of total demand held below 50% for the fourth time in five months, down from 55% in 2025 and 62% in 2024.
Market Repercussions
The combination of drivers behind the surge in demand was unlikely to persist .
Blenders’ higher stocks and surging base oils prices raised the prospect of a slowdown in domestic and overseas requirements in the coming months.
Higher inventories could also reduce the need for additional hurricane season stock-building, limiting one source of near-term demand support.
The shortfall of Group III base oils was double-edged, supporting substitution with other grades while also accelerating demand destruction for the product amid tight supply and higher prices.
The recent pace of demand growth also added to the pressure on refiners already facing incentives to maximise motor fuels output.
But the impact of a demand slowdown could be limited, easing pressure on refiners facing increasingly tight inventories.
