India’s very-light grade base oils imports fell in December to their lowest in more than two years as signs of tighter supply coincided with more muted demand.Supply tightened as plant-work and lower production cut Asia-Pacific base oils exports throughout the fourth quarter of last year.The drop in availability extended to the Mideast Gulf, where plant maintenance work and lower exports also curbed supply.The US market also had a smaller volume of surplus supplies to clear during the final months of last year..US' October base oils output falls.The lower supply partly reflected high diesel prices relative to crude that continued to incentivize refiners to divert feedstock or base oils supplies back into the middle distillates pool. These moves typically have the largest impact on very-light grade base oils.Most of these factors extended into the start of this year, raising the prospect of limited additional supplies in the coming months.India's imports of very-light grade base oils fell to less than 100,000t in December, provisional customs data showed.The volume was down from typical levels of more than 150,000 t/month in the first eleven months of last year.The drop in shipments for a ninth month cut total imports to 1.74mn t in 2022, down 27pc from 2.38mn t the previous year..The slump in imports also reflected weaker buying interest.Demand for overseas supplies of very light grades had surged in 2021; in some months they accounted for more than 60pc of India’s total imports.Their share of imports fell to less than 48pc of the total in 2022.The surge in imports in 2021 had coincided with an unusually steep premium of domestic retail diesel prices over light-grade prices.The fall in imports in 2022 coincided with a much narrower diesel premium to light-grade prices.The size of the drop in shipments suggested that most of the remaining demand was for lubricants production rather than for other purposes.Such a scenario raised the prospect of a reversion to steadier demand for these supplies.Any further drop in imports from current levels could in turn leave blenders with increasingly tight feedstock supply to maintain stable lubricants production..India’s Dec lube demand holds firm
