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Base oils exports to the US rose to a 19-month high in March, partly offsetting the loss of Middle East Group III shipments
First-quarter exports climbed to the second-highest level since 2022, reinforcing South Korea's role as a key Group III supplier
Feedstock constraints and motor fuels prioritisation pointed to a slowdown in shipments, limiting South Korea's ability to replace lost Middle East supply
South Korea’s base oils exports to the US rose to a nineteen-month high in March, partly offsetting a pause in premium-grade shipments from the Middle East that tightened global supply since late February.
Total exports rose to 80,000 tonnes in March, up from 49,000 tonnes in February to the highest since August 2024, Korea Customs Service data showed.
South Korea’s base oils exports to the US trended lower in recent years as rising Middle East shipments accounted for a growing share of US Group III supplies.
The disruption to Middle East flows from end-February pointed to a reversal of that trend.
Key Highlights
· March exports to the US rose 70% year on year, far outpacing average monthly levels of 43,000 tonnes in 2025.
· A large portion of the shipments was set to reach the US Gulf coast in the coming days.
· First-quarter exports to the US rose to close to 184,000 tonnes, up from 118,000 tonnes in the fourth quarter to the highest since 2024 and second-highest since 2022.
· South Korea’s shipments accounted for 35% of US base oils imports in February, up from 26% in 2025.
· South Korea last covered more than 30% of US imports in 2019, with Middle East shipments accounting for a growing share since then.
Market Repercussions
US reliance on Group III shipments from South Korea was likely to rise over the coming months in response to the loss of Middle East supplies.
But South Korean refiners also faced growing constraints.
Tightening feedstock supply and a focus on motor fuels output were likely to limit their ability to sustain earlier export volumes, let alone increase them.
South Korea’s exports to the US in April already showed signs of a marked slowdown from March, pointing to those constraints beginning to feed through.
An extension of the slowdown would limit South Korea’s ability to recover market share in the US and aggravate Group III supply tightness in that market.
