South Korea’s base oils exports to the US fell in April to the lowest in nearly six years, tightening an already strained Group III market as Middle East supply disruptions reduced availability from the largest source of premium-grade base oils into the US.

Total exports fell to 16,100 tonnes in April, sliding from close to 79,000 tonnes in March to the lowest since May 2020, Korea Customs Service data showed.

Average monthly shipments of around 47,500 tonnes across the two months remained close to typical levels over the past year, suggesting the swing reflected shipment timing rather than a structural shift in flows.

Even so, the reversal in April removed a key buffer for the US market just as Middle East shipments began to slow, reducing overall availability of Group III supplies.

Key Highlights

·         April exports to the US plunged 67% year on year, outpacing the 15% fall in South Korea’s total April exports, pointing to a Group III-heavy decline.

·         The US share of South Korea’s exports fell to 6% in April, the lowest since May 2020 and down from more than 15% during the previous three months.

·         South Korea’s exports to the US so far in May pointed to flows staying below typical levels.

·         South Korea supplied more than 25% of US base oils imports in the four years to 2025, with the share slipping below 10% in March.

Market Repercussions

The March surge provided temporary cover by building US inventories ahead of spring demand, partially offsetting the impact of slowing Middle East flows that covered at least 44% of US imports in recent years.

April's drop reversed that buffer, leaving the US market more exposed to Middle East supply losses and amplifying the impact of any further monthly variability in South Korean flows.

Any repeat of April’s dip in exports would magnify the impact, with US Group III prices already surging and supply constraints starting to squeeze availability of some engine oil grades.