India’s May base oil imports edge down

India’s base oil imports fell in May to their second lowest in the past 11 months amid a slump in arbitrage flows from the US.

But domestic supply remained sufficient amid a seasonal slowdown in lube consumption and steady availability from other domestic and overseas sources.

Imports of 327,170t in May edged down from 335,680t the previous month and by 2pc from year-earlier levels, provisional customs data showed. The volume also lagged average imports of around 381,000 t/month over the past year.

Total imports of 1.79mn t in the first five months of the year were down 4pc from 1.86mn t during the same period last year.

Base oil imports have slowed as a boost in arbitrage shipments from the US began to fade.

The shipments slowed after US producers completed the removal of a swathe of surplus cargoes from late last year and early this year.

Even if US producers had surplus volumes to clear, the arbitrage to move cargoes to India was shut following the surge in US prices since late February.

High diesel prices also incentivized US producers to redirect feedstock supply to produce more of the motor fuel instead of light-grade base oils.

India’s bases oil imports from the US fell in May to more typical levels of 17,150t. These supplies consisted mostly of term shipments.

The volume slid from more than 45,000t in each of the previous three months. The larger volumes during those months reflected the wave of additional arbitrage shipments.