Europe’s Group III base oils supply stayed lower than usual in October as a dip in shipments from the UAE and Bahrain countered a pick-up in flows from Asia.The dynamic extended a trend throughout the year, pointing to signs of a structural change in trade flows of Group III base oils from the Middle East to Europe and the US.Europe’s total supply improved to more than 125,000 tonnes in October, from around 100,000 tonnes the previous month, government and port data showed.The September volume was the lowest in eight months. The October volume was the second-lowest in eight months.Supply dipped in September and October partly because of a drop in shipments from Spain, where a Group III unit underwent scheduled maintenance work from the end of the third quarter.A sustained slowdown in shipments from the UAE and Bahrain compounded the drop in supply.Europe’s imports of less than 8,000 tonnes in October from the UAE and Bahrain combined fell from close to 15,000 tonnes in September to an eleven-month low.The drop in shipments added to a fall in Europe’s imports from the two countries to around 195,000 tonnes in the first ten months of 2024.The volume was down from more than 260,000 tonnes during the same period in 2023.The drop in supplies contrasted with a nearly-40% rise in US base oils imports from Bahrain and UAE to close to 400,000 tonnes in the first ten months of the year.Europe’s imports from the UAE and Bahrain fell, and US imports rose, even with Europe Group III prices maintaining a steep premium to US prices since the start of the second quarter of the year.The dynamic pointed to other factors driving the change in trade flows.A change in logistics could be one factor.Shipments from Bahrain and UAE began to move to Europe and US via southern Africa rather than the Suez Canal from early this year.The new route had a much larger impact on flows to Europe than to the US in terms of distance travelled and freight time added.The move in turn cut the logistical attraction of moving more supplies to Europe rather than the US.Any reversion of shipments from the UAE and Bahrain to Europe via the Suez Canal would reverse that dynamic.Such a change shows little sign of happening any time soon..Europe’s Sept Group III supply falls.US’ October base oils imports fall.Netherlands’ Sept base oils output rises.UK’s Sept base oils output rises.Italy’s October base oils output falls
