Brazil's base oils imports climbed to a 19-month high in April, as stronger inflows from major suppliers eased supply tightness built during the first quarter amid production disruptions and rising demand.

Total imports rose to almost 84,000 tonnes in April, up from around 62,000 tonnes in March and the highest since September 2024, MDIC data showed.

The April inflows mostly reflected cargoes arranged before end-February disruptions tightened supply and lifted replacement costs across all base oils grades.

Key Highlights

·         US shipments to Brazil reached a 19-month high, with their share steady at 76% of total imports.

·         US flows showed signs of holding firm into May, even as global competition for US export cargoes intensified.  

·         A rare shipment from Argentina helped supplement tight domestic Group I supply following refinery production issues early this year.

·         Middle East volumes rose to a four-month high, accounting for more than half of Brazil’s premium-grade base oils imports —  a rising share from a source whose flows subsequently paused.

Market Repercussions

The April import surge provided cover for a market where supply had lagged demand during the first quarter, with production issues compounding the shortfall.

Even so, growing competition for US export volumes and the ongoing pause in Middle East Group III shipments pointed to tight fundamentals ahead for a market reliant on overseas supplies to meet demand.

A sustained pause in Middle East flows would increase Brazil’s reliance on Asian supplies from sources that also faced their own supply constraints.