After climbing steadily for more than a decade, U.S. imports of base oils flattened out in 2013, the first year in 10 that did not see a gain. From January through December, 11.3 million barrels poured into the United States, versus 11.4 million barrels in 2012.
The U.S. ships out more than twice the volume of base oil than it takes in though, and exports in 2013 were 26.6 million barrels, according to data released by the U.S. Energy Information Agency. Exports also hit a plateau last year, after setting an all-time record of 27.3 million barrels in 2012. So 2013 earns the consolation prize as the second-best year ever for U.S. exports.
These flat-line results might make the U.S. trading scene appear tranquil, like a swan gliding across a lake. But players report furious activity was under way below the surface, especially on the import side where base oils from the Middle East strove energetically to snag market share from more established suppliers.
Together, Canada and South Korea accounted for the majority of U.S. base oil imports in 2013, the EIA data show. No surprise, since they’ve been the leaders for some time. Some 2.7 million barrels of lube oil came from Canada, giving it a 24 percent share and a volume gain of 5 percent over 2012.
South Korea remained the number one source of U.S. imports, with 35 percent of the total. However, base oil shipments from this country fell by some 10 percent, to 4.0 million barrels in 2013 versus 4.4 million the year before.
South Korea’s merchant refiners, who include SK Lubricants, S-Oil and GS-Caltex, are the primary suppliers of API Group III base stocks for U.S. blenders. An unusual number of refinery turnarounds were performed in that country last year, though, which base oil traders believe cut into the volumes available for sale to the United States.
Two Middle Eastern countries, Bahrain and Qatar, seemed ready to take up the slack. Each has targeted the U.S. market with output from refineries that didn’t exist before 2011.
Bahrain is where Neste and Bapco operate their 8,200 b/d Group III plant, completed in 2011. Bahrain sent 600,000 barrels to the United States in 2012, and in 2013 its shipments hit 660,000 barrels, coming ashore with monthly punctuality. Roughly 6 percent of U.S. base oil imports came from this locale.
Qatar is home to the Pearl gas-to-liquids joint venture of Shell and Qatar Petroleum. It has capacity to make 6,000 barrels a day of API Group II and 22,000 barrels of Group III. Since its own 2011 startup, Pearl has increased the size and frequency of its U.S. shipments, too. It landed 1.7 million barrels in the United States in 2012, and bumped that up to 2.3 million barrels in 2013. Qatar now accounts for a bit over 20 percent of all base oil imports.
Glancing at the outbound side of the ledger, the EIA data show Mexico was the largest recipient of U.S. lube oil exports in 2013, taking 4.1 million barrels. Brazil was the next-largest (3.4 million barrels), followed by Canada (3.1 million).