Italy’s base oils output slipped to a three-month low in March, tightening Group I availability as domestic lubricants demand surged ahead of emerging supply disruptions and rising prices.

Total base oils output fell to 40,700 tonnes in March, down from close to 50,000 tonnes in February, ending a recovery that had followed maintenance-related lows in late 2025, Ministry of Environment and Energy Security data showed.

The slowdown coincided with scheduled plant maintenance in other markets, adding to a squeeze on Group I availability.

Tighter supply contrasted with stronger seasonal lubricants demand and a wave of inventory-building as buyers accelerated procurement plans and built stocks following supply disruptions that emerged from end-February.

Lower output and stronger-than-expected demand amplified the subsequent supply squeeze.

Key Highlights

·         The drop in base oils output contrasted with a surge in Italy’s March lubricants demand to a six-year high.

·         Base oils exports fell to a three-month low, limiting Group I availability for other markets.

·         Base oils accounted for 0.8% of refinery output, down from 1.1% in February.

·         Gasoil output accounted for 37% of refinery output, down from more than 41% in January-February.

Market Repercussions

Lower gasoil run rates in March pointed to refinery production planning arranged before the global supply disruptions emerged at end-February.

The surge in diesel crack spreads from early March incentivised refiners to boost motor fuels output.

That shift pointed to continued pressure on base oils production, adding to tightening conditions in Europe's Group I market.