UK’s March base oils output falls

The UK’s base oils output almost ground to a halt in March at a time when European supply of the lubricant feedstock was unexpectedly tight.

Base oils output of 1,650t in March fell from around 42,000t the previous month, government data showed. The volume was the lowest since late 2019.

The drop in output cut the UK’s total base oils production to 60,000t in the first three months of the year.

The volume was down from 90,000t during the same period last year and the lowest quarterly volume since the beginning of 2020.

The lower production coincided with a drop in supplies from other European markets like Poland and Italy because of planned and unexpected maintenance work.

A slowdown in base oil shipments from Russia compounded the supply tightness.

Regional Group I base oil prices have surged in response to the tighter supply. The lack of availability and high prices have curbed export spot volumes for more regular outlets like West Africa.

The high prices have also boosted the attraction and feasibility of moving shipments from Asia-Pacific to the region.

The UK’s base oils output fell in March even as the country’s total refined products output rose. Production of road diesel climbed to a seven-month high.