Europe's July Base Oils Exports Fall To 11-Month Low

Europe’s base oils exports fell to an 11-month low in July, adding to unusually low export volumes across major supplying regions and leaving overseas buyers with fewer supply options.

Europe's base oils exports fell to less than 240,000 tonnes in July, from more than 255,000 tonnes in June and the lowest in 11 months, Eurostat and HMRC data showed.

The decline was led by a slump in UK shipments, which fell to less than 2,000 tonnes from more than 20,000 tonnes in each of the previous four months.

The lower European shipments added to falling US exports and unusually low Asian volumes, leaving combined exports from all three markets at their lowest since December 2022.

The ongoing loss of Middle East premium-grade supplies has added to the reduction in export availability, leaving importers with fewer sources of supply.

Key Highlights

·         Global exports from Europe, Asia and the US fell 10% year on year to less than 1.20 million tonnes, the lowest since December 2022.

·         Europe Group I exports fell to less than 45,000 tonnes, the lowest since March 2025, while exports of other grades combined edged up 3% year on year.

·         Exports to Singapore stayed low for a second month, at less than 400 tonnes, down from more than 14,000 tonnes in each of April and May and the lowest in more than five years.

·         Exports to the US fell to less than 3,000 tonnes, from more than 10,000 tonnes in each of the previous five months.

·         Italy’s exports rose 24% year on year as domestic output reached an 11-month high.

Market Repercussions

The ongoing loss of Middle East supply has increased the share of production needed to meet domestic demand across Europe, the US and Asia, leaving less supply available for export.

Upcoming maintenance in Asia, Saudi Arabia and North America will further reduce available supply. Strong diesel prices and refining margins could add to the pressure by encouraging refiners to prioritise fuel production over base oils.

With fewer exports from established suppliers across all three major regions, buyers had less scope to replace missed shipments or find alternative spot cargoes.

Spot buyers also missed the additional cargoes that typically become available during the summer months. That leaves inventories lower as seasonal demand rises in markets including West Africa.