US’ Jan base oil exports to India surge

US base oil exports to India rose in January to a 17-month high as producers moved to clear a large surplus of supplies from the domestic market.

Exports to India rose to 234,550bl (33,000t) in January, government data showed. The volume was up from 53,860bl the previous month and the highest since August 2020.

The surge in shipments followed a slowdown in US base oil exports to India in second-half 2021 as US producers and buyers held onto supplies during the Atlantic hurricane season.

The move followed prolonged disruption to base oil production and supplies during the Atlantic hurricane season in 2020.

High US base oil prices relative to other markets also made the arbitrage hard to work. The high prices incentivized overseas buyers to target supplies from other sources instead.

A sharp drop in US prices in late 2021 made the arbitrage more feasible and prompted the fixing of a wave of shipments bound for India.