• US base oils output eased in April but remained above its long-term average

• Domestic production is set to cover a larger share of US demand as imports weaken, increasing reliance on local refineries

• The shift could limit future export availability unless domestic demand continues to soften

US base oils output stayed relatively firm in April, with domestic refiners set to cover a larger share of demand as imports weaken in the coming months.

Base oils production slipped to 4.96 million barrels (698,000 tonnes) from 5.24 million barrels in March, EIA data showed. The volume still rose by 27% from year-earlier levels and remained above its longer-term monthly average.

US output and imports have together covered domestic demand. That balance was beginning to shift.

Middle East imports were set to slump in the coming months, leaving domestic output to cover a larger share of domestic requirements.

Key Highlights

·         Output less exports accounted for 44% of domestic demand in April, down from 46% in the first quarter and 52% in 2025.

·         Imports’ April share of domestic demand rose to more than 54%, climbing to an eight-month high and up from 47% in 2025 and more than 53% in 2023 and 2024.

·         Output less exports fell to a six-month low as overseas shipments rose to an eleven-month high.

·         Total supply, combining output and imports, fell to 6.46 million barrels but remained above the one-year monthly average of around 6.20 million barrels.

·         Output’s share of total supply held steady at around 77%, similar to the first quarter and down slightly from 2025 levels.

Market Repercussions

The balance between domestic production and imports as a share of domestic demand is becoming more important than the overall level of supply.

Lower imports will require US refiners to supply a larger share of domestic demand over the coming months, increasing the importance of refinery operating rates and maintenance schedules.

As the market heads into the Atlantic hurricane season, any disruption to domestic production would have a larger impact on market availability than earlier this year.

The shift also changes the outlook for exports. April's export surge reflected weak domestic demand as much as healthy supply. As imports slow, sustaining those elevated volumes depended on demand staying soft.

The US market was entering the second half of the year with less flexibility than usual.

Domestic production was sufficient to cover domestic and overseas demand in April. But with imports set to weaken, a larger share of that output is likely to remain in the domestic market until Middle East premium-grade imports recover or supply from other sources increases.