India’s January base oils imports rise

India’s base oils imports rose in January on the back of a recovery in shipments from the Mideast Gulf and the arrival of arbitrage supplies from the US.

The rise in shipments was relative.

Imports rose from a 31-month low in December. The January volume was still the second-lowest since mid-2020.

The slump in imports since the second half of 2022 contrasted with India’s firm domestic lubricants consumption.

Domestic base oils production rose strongly during the final three months of last year especially. The higher output helped to cover some of the rise in demand.

But the rise in output lagged the size of the drop in India’s base oils imports.

The trend raised the prospect of tighter supply at the same time as domestic lube demand peaks at the end of the first quarter of the year.

India’s base oils imports of less than 240,000t in January rose from close to 194,000t the previous month, provisional customs data showed.

The last time that imports exceeded the 300,000 t/month level was in July 2022.

Before then, imports had fallen below the 300,000 t/month level just once in the two years to June 2022.

Base oils imports fell in January from year-earlier levels for a seventh month even as domestic lube demand rose.

Blenders covered more of their requirements with supplies from domestic producers instead.

Prices for domestic producers’ supplies were unusually competitive compared with prices for imported shipments.

The competitive prices followed Indian refiners’ procurement of increasingly large volumes of crude oil from Russia. The price for the crude was at a steep discount to market price levels.

The competitive prices highlighted the repercussions of the discounted crude on other oil product markets and on refiners in other countries.

India’s January imports got a boost from a rebound in arbitrage supplies from the US to a seven-month high of more than 23,000t.

The flow of additional large shipments from the US to India was likely to be limited.

Imports from Mideast Gulf producers rebounded to more than 70,000t in January.

The volume rose from little more than 30,000t in December to a six-month high.