Base oils output fell to a nine-month low as severe winter weather disrupted refining operations
Imports rose to a 16-month high, offsetting the slump in output
Tightening global supply reduced the import buffer, raising exposure ahead of the summer hurricane season
US base oils output fell to a nine-month low in January as severe winter weather disrupted upstream production and refining operations, highlighting the exposure of domestic plants to extreme weather events.
Total base oils and lubricants output fell to 4.45 million barrels (627,000 tonnes) in January, dipping from 5.34 million barrels in December to the lowest since April 2025, EIA data showed.
Output fell despite the absence of major scheduled plant maintenance, which had been the main factor behind last April’s low.
The impact was limited as the disruption coincided with a period of seasonal demand weakness.
Similar disruptions in the coming months would coincide with a seasonal demand pick-up and a tighter global supply backdrop.
Key Highlights
· Paraffinic base oils output fell to 3.73 million barrels, dipping below levels last October when a major plant was offline for scheduled maintenance work.
· Paraffinic base oils output in the Texas Gulf coast district fell to a 27-month low, contrasting with the October drop that was concentrated in the Louisiana Gulf coast district.
· Base oils imports rose to a 16-month high, offsetting the impact of the drop in output.
· Total supply, or output and imports combined, fell to 6.24 million barrels, down from more than 6.60 million barrels in December but still above November levels.
· Base oils imports accounted for 29% of US supply, up from 20% in December and the highest share since late-2022.
Market Repercussions
The slump in base oils output showed the impact of extreme weather events, which have typically occurred during the Atlantic hurricane season rather than in winter.
The rise in base oils imports and their larger share of total supply in January pointed to the buffer those shipments provided against any unexpected drop in domestic output.
The disruption to global supply, especially of Group III base oils, reduced that buffer, limiting the capacity of overseas refiners to offset unexpected drops in US production.
The loss of that buffer would also amplify the impact of any weather-related disruptions to US output during the Atlantic hurricane season this summer.
Any such disruption could also have a larger-than-usual impact on overseas markets as global supply tightness increased buyers’ reliance on US base oils.