Europe's Oct Group III imports from Mideast Gulf fall

Europe’s Group III base oils imports from the UAE and Bahrain fell in October their lowest in more than two years, adding to a squeeze on the region’s availability of the premium-grade product.

A surge in premium-grade base oils supplies from Spain this year incentivized refiners in regions like the Mideast Gulf to redirect more shipments to other markets instead.

Slowing economic growth in Europe added to the attraction of targeting other markets.

European Group III base oils supplies tightened in response even as structural demand for the product continued to rise.

The slump in shipments from the UAE and Bahrain to Europe in October worsened the tightness.

Europe’s base oils imports of 6,720t in October from the two countries combined fell from 17,060t the previous month to the lowest since mid-2020, government data showed.

The drop in imports for the seventh time in eight months cut total supplies to 195,350t in the first ten months of the year. The volume was down 27pc from 267,420t during the same period last year.

Including Qatar, Europe’s base oils imports from the three countries fell in October to a five-month low of 30,640t.

Producers in the Mideast Gulf instead lined up more supplies for other markets such as the US.  

US base oils imports of more than 35,000t from Bahrain and UAE combined in October rose by 19pc from year-earlier levels. The increase was the third in four months.

US imports of 301,030t from the two countries in the first ten months of the year rose from around 296,000t during the same period last year.

Strong demand and high US prices relative to Europe attracted more supplies to that market.

The subsequent supply tightness in Europe in turn supported firmer Group III base oils prices in the region.

Group III prices strengthened in the fourth quarter of the year relative to diesel prices and rose relative to Group I and Group II prices.