Italy's lubricants demand rose for a ninth straight month in February, contrasting with weaker European markets at the start of the year
Widespread demand weakness incentivised blenders to keep lean stocks, complicating response to March supply disruptions
Regional economic growth pressure and feedstock shortages left blenders with competing challenges on supply and demand
Italy’s lubricating oil demand rose in February for a ninth month, contrasting with weak consumption in other European markets that complicated blenders’ response to supply and price disruptions in March.
Italy’s lubricating oil consumption rose to 33,200 tonnes, climbing 1.5% year on year to a three-month high, Ministry of Environment and Energy Security data showed.
Italy’s relative resilience made it an outlier in Europe, limiting its reliability as a bellwether for the state of regional lubricating oil consumption.
But growth momentum still slowed in recent months, aligning with the broader European trend.
Widespread demand weakness encouraged blenders to maintain lean stocks, leaving them exposed to unexpected supply disruptions that followed in March.
Key Highlights
· Italy’s February automobile lubricants demand rose by 2.5% year on year, reversing a contraction in January and outpacing a 0.6% rise in industrial oils consumption.
· Industrial oils demand growth was the slowest in five months, mirroring a dip in Italy’s manufacturing index to a four-month low.
· The manufacturing index edged higher in March, contrasting with a slump in Italy’s consumer confidence to a two-year low.
· Italy’s three-month lubricants demand growth peaked at around 4% during the final five months of 2025 before easing in January and February.
· Europe’s lubricants demand recovery mirrored the trend, peaking at the start of the fourth quarter before slowing over the following months to January.
Market Repercussions
Italy’s slower demand growth, combined with shrinking consumption across Europe, reflected the region’s fragile economic backdrop.
Economic growth now faced additional pressure from rising energy costs and disruption to key supply inputs.
The slowdown left blenders with competing supply and demand-side pressures.
Slower economic growth and weak lubricants consumption encouraged blenders to maintain lean stocks.
Feedstock supply-side disruptions instead magnified the risk of low inventories and incentivized the need for higher stocks.
Such a disruption materialized in March, with a halt in shipments of Group III base oils from the Middle East and surging diesel prices that incentivized other refiners to prioritise motor fuel production.