Argentina’s base oils supply rose to a three-month high in February despite an ongoing pause in arbitrage shipments from markets like Europe and Asia-Pacific.

Higher domestic base oils production instead balanced out the drop in overseas supplies.

Output of around 11,900mᶟ (10,530t) in February rose from 7,320mᶟ in January to a 13-month high, government data showed.

Output had slumped in second-half 2022 as buyers covered requirements with a swathe of arbitrage shipments instead.

The competitive prices for the supplies boosted their attraction compared with domestic volumes and shipments from the US.

Shipments from markets like Asia-Pacific then petered out by year-end amid tighter availability in that region.  

Argentina’s domestic base oils output still rose in February despite the availability of plentiful surplus supplies in the US.

Relatively higher prices for the US supplies and the Argentinian currency’s sustained depreciation versus the US dollar complicated the shipment of additional volumes from that market.

The lack of additional shipments to markets like Argentina forced US sellers to eye more distant markets like West Africa and India instead to clear surplus volumes.  

Argentina’s base oils imports of 8,810mᶟ in February rose from less than 6,500mᶟ in January to a three-month high.

They were still down from more than 18,000 mᶟ/month in the four months to November, when the swathe of arbitrage shipments reached the country.

There were signs of a pick-up in arbitrage flows in March, with the delivery of a shipment of Greek origin around the middle of the month.

The shipment reflected the large volume of surplus supplies available in Europe early this year and the competitive price for the supplies, especially compared with volumes of US origin.

Any additional arbitrage supplies from Europe were also likely to dwindle over the coming months as a seasonal rise in demand curbs availability of surplus shipments.