Israel’s Aug base oils imports stay low

Israel’s base oils imports stayed unusually low in August even as they edged up to a four-month high.

Imports of 7,630 kilolitres (6,760t) in August rose from 4,870kl the previous month to the highest since May, government data showed.

The volume was still down 60pc from year-earlier levels.

The fall in imports for an eighth straight month cut the country’s total shipments to 70,110kl in the first eight months of the year.

The volume was down more than 70pc from 237,780kl during the same period last year.

Base oils imports fell even as Israel’s economy enjoyed healthy growth and manageable inflation, especially compared with Europe.

Falling car sales contrasted with that strength, although the August sales volume was the highest since the start of the year.

The fall in base oils imports instead followed the imposition of taxes on base oils and lubricants from the start of this year. The move limited the attraction of imports to base oils for lubricants production.

The drop in imports this year coincided with a sustained slowdown in Indian demand for very-light grade base oils.

Israel had previously also been an outlet for very-light grade base oils.

The trend complicated moves by producers in markets like South Korea to clear their surplus volumes of the light-grade supplies.

Israel’s share of imports from Europe also fell sharply this year. The trend partly reflected tighter supply in that market.

High European base oils prices compared with other markets also incentivized buyers to cover requirements with shipments from other regions instead.

Israel’s imports from Spain, Greece and Italy combined accounted for 7pc of its total deliveries in August. The share was down from typical levels of closer to 15pc of monthly volumes in 2021.

Its August supplies instead included some 1,700kl of base oils from Turkey and a 1,150kl shipment from UAE. The shipment from Turkey was the largest this year from that market.

Supplies from US and India added to the August volume.

Easing supply tightness and waning demand in Europe boosted surplus supplies in that market during the third quarter of the year.

The trend increased the need to make more feasible the arbitrage to outlets like Israel to clear the surplus.

Any such volumes faced competition from a large number of other sources.