A stunning 20.9 million barrels of base oil were exported. That is, two of every three barrels manufactured – fully 68 percent – went by ship, rail or truck to another country. Exports in recent years had ranged between 40 and 45 percent of production.

Looking back, Mike Smith of UniSource Energy, which markets base oils and other petroleum specialties, said the U.S. market was pretty snug in the years first half. The market was very tight on certain products and in certain locations, with either Group II+ or Group III always tight and heavy viscosities also tight, he remarked.

Even so, the market was relatively well-balanced for the first half, Smith added. It was never out of product. You might need to truck it from further away, but you could get supply.

Demand was especially strong from Latin America, he noted, and the EIA data echoes this. Nearly half of the export gusher (9.5 million barrels) went to Mexico, Brazil, Argentina and other Latin American buyers. In first-half 2016, these markets took 6.7 million barrels.

Exports have been very strong, with materials like API Group II, process oils and also petroleum solvents routinely going in ISO containers to Latin America, confirmed Smith, who is based in Naperville, Illinois.

Plenty of Group I moved offshore, too, pointed out Joe Rousmaniere of base oil and lubricant supplier Chemlube International in Harrison, New York. He saw large volumes of U.S. Group I being tapped by Asian buyers, who were in urgent need because of a Jan. 22 fire at TonenGenerals 7,100 b/d Wakayama refinery in western Japan.

The Wakayama facility remains off line, and may not complete repairs before year end. Most of its Group I was being exported to Asian markets through ExxonMobil distributors, and customers soon were clamoring for replacements. To meet obligations, supply was diverted from elsewhere in Asia and also from the U.S., Rousmaniere observed.

Turnaround work at leading plants also kept North American supply on a short leash. Excel Paralubess 22,200 b/d Group II refinery in Westlake, Louisiana, was out from early March to late April, but running well soon after. Ergon had a brief turnaround in April at its 4,800 b/d site in Newell, West Virginia, which makes both Group I and Group II.

Group II giant Chevron performed one turnaround in Pascagoula, Mississippi (25,000 b/d) during April and May, and another in June at Richmond, California (20,700 b/d). And Motivas facility in Port Arthur, Texas, with 40,300 b/d of Group II, slated a 47-day turnaround on one of its three lube trains. It started the work in May, completed it – and promptly began a second trains maintenance.

Imports, mostly Group III, bridged the gap somewhat. U.S. base oil imports from January to June were 7.6 million barrels, 400,000 more than the same months a year ago, the EIA data show.

Leading the pack was South Korea, which sent 2.4 million barrels of base oil to the U.S. from January to June this year, versus 1.9 million barrels in the first half of 2016 and 1.8 million barrels in the second half.

Sources credited South Koreas gain to the ill health of Pearl, the gas-to-liquids refinery in Ras Laffan City, Qatar, jointly owned by Shell and Qatar Petroleum. With capacity to make 22,000 b/d of Group III, Pearls productivity began to slump last year, and in February the ailing facility was shut down for major repair work on its gasifier units.

That misfortune triggered a scramble in Group III as Shell sought out alternative sources to make up the shortfall, an official with SK Lubricants in South Korea remarked to Lube Report. Rival buyers, displaced, had to hunt farther abroad to secure the precious molecules.

Other Asian producers also took advantage of Pearls hiatus. Indonesia, home to SK-Pertaminas 10,000 b/d Group III plant in Dumai, sent 442,000 barrels to the U.S. in the first six months of 2017, and from the Middle East, Bahrain sent along 500,000 barrels of Group III in the first half from its 8,200 b/d Bapco–Neste refinery in Sitra. And base oil newcomer Adnoc, Abu Dhabis national oil company, sent substantial volumes from its 10,300 b/d Group III refinery in Ruwais: Shipping data from the emirate indicate that 67,000 tons (504,000 barrels) of Group III flowed to the U.S. from January to June, with about half of that going to Shell and its subsidiaries, the EIA data indicates.

Despite this frothy competition, South Koreas trio of base oil refiners – GS-Caltex, S-Oil and SK Lubricants – were well positioned to slake the thirst. They have a combined 50,000 b/d of Group III capacity, each has a well-established supply chain to serve U.S. customers and their Group IIIs are approved for use in API-licensed automotive engine oils.

At this writing, Pearl is back on line and shipping product again, so Asian refiners may not be able to sustain their U.S. market share through the second half. But even as EIA was publishing the January-to-June data, Hurricane Harvey was hacking away at the Gulf Coast. The cost to refineries there is still being tallied.

We may have thought availability was tight in the first half, UniSources Mike Smith said, but after Harvey we may see just how bad it can get.