US base oils exports to Latin America fell to an eleven-month low in December, extending a sharp slowdown in shipments to the region during the final months of the year.
Arbitrage flows to Latin America from other markets like Asia-Pacific also slowed sharply by year-end.
The slowdown in shipments from other markets left Latin America more reliant on supplies from its own refiners and limited any build-up of surplus volumes at the end of the year.
The region’s more balanced supply cushioned the impact of weaker lube demand and raised the prospect of steady requirements for base oils from the beginning of this year.
Those requirements faced signs of still-low shipments from the US in January.
US base oils exports to Latin America, excluding Mexico, came to 372,620bl (52,480t) in December, government data showed.
The volume fell from more than 393,000bl the previous month to the lowest since January 2022.
The fall in exports compounded a sustained dip in shipments during the fourth quarter of the year.
The slowdown cut US supplies to the region to 1.17mn bl in the last three months of the year.
The volume fell by 28pc from the previous quarter to the lowest since first-half 2020, when global lockdowns slashed economic and trade activity.
US base oils exports to Latin America fell despite relatively firm lube demand in the region, especially compared with other markets like Europe.
The fall in shipments reflected more a drop in US base oils supply throughout the second half of last year.
The drop in supplies cut base oils exports to Latin America. It cut shipments to Europe even more.
Even with the slowdown in the fourth quarter, US exports of 5.68mn bl to Latin America in 2022 rose by 4pc from 2021 to the highest in at least eight years.
The rise in shipments contrasted with a 6pc fall in flows to Europe last year.
