Base oils output fell to a two-year low in February, pushing the import share of supply above 71% for the first time since end-2023
More than 85% of imports were US-origin, increasing exposure to any tightening of US export availability
Rising import dependence left Brazil more vulnerable to tightening global supply
Brazil’s base oils output fell to a two-year low in February, increasing the country’s reliance on imports as global supply tightened.
Total output fell to 34,000 cubic meters (30,000 tonnes), down from more than 47,000 cubic meters in January and the lowest since end-2023, ANP data showed.
The slowdown reflected lower production at Petrobras’ Group I unit at its Reduc refinery, where output slipped to a twenty-seven-month low of 26,000 cubic meters.
The plant had been operating at lower levels of less than 38,000 cubic meters/month in the six months to January, down from more than 44,000 cubic meters/month during the year to July 2025.
Higher imports during the final months of last year helped offset weaker domestic output, with that trend extending through February.
The growing reliance on imports left Brazil more exposed to overseas supply risks as disruptions linked to the Middle East conflict tightened global availability.
Key Highlights
· Total February supply fell to around 121,000 cubic meters, slipping from more than 124,000 cubic meters in January to a five-month low.
· Imports accounted for more than 70% of supply, rising from around 60% in 2024 and 2025 to the highest since late-2023.
· More than 85% of imports were of US origin, up from around 75% in 2024 and 2025.
· Brazil’s February lubricants consumption fell for a fourth straight month year on year, cushioning the impact of lower supply.
· Supply and demand almost matched each other in February, following a small shortfall in January.
Market Repercussions
Brazil’s lower base oils output pointed to ongoing production issues at the Reduc refinery.
Even with weaker demand, any extension of the output slowdown would sustain the country’s already-high reliance on imports.
That reliance was more manageable in recent months, with Brazil providing a ready outlet for surplus US supplies during the winter months.
The reliance on US imports could become more problematic in the coming months as seasonal demand in the US picks up and refiners prioritize motor fuel output, reducing surplus supply for export markets.
Any slowdown in US flows would leave Brazil competing with other markets for a smaller volume of export cargoes.