· US base oils prices continue to edge lower versus feedstock/competing fuel prices.· Margins fall because of steady outright prices and higher feedstock costs.· Margins previously rose in first few weeks of Q2 2025 because of lower feedstock costs while outright prices mostly held steady.· Dynamic suggests lower feedstock costs rather than tighter fundamentals were key factor supporting higher margins.· Dynamic suggests supply-demand fundamentals remained weaker than usual in early Q2 2025 even with round of plant maintenance.· Completion of most plant maintenance work raises prospect of rise in supply over coming weeks, combined with slowdown in demand.· US refiner’s posted-price cut last week coincided with completion of several plant-shutdowns in May 2025.· Posted-price adjustment could reflect expected change in supply fundamentals following completion of maintenance work.· Dynamic suggests base oils margins could face more pressure if feedstock prices were to extend gains..· US Group III base oils supply could tighten because of plant maintenance in South Korea and Middle East in Q2 2025.· Impact of plant maintenance on supplies from South Korea remains more muted so far this year than in H1 2024.· South Korea’s base oils exports to US hold firm in April 2025 for third month even ahead of plant maintenance in May 2025..· Steady flows contrasts with dip in South Korea’s base oils exports to US ahead of and during plant maintenance in March-April 2024.· Steady flows contrast with signs of slowdown in shipments from Middle East to US so far in Q2 2025.· Extension of that dynamic could provide opportunity for supplies from South Korea to boost their share of US Group III base oils market.· Any slowdown in shipments from Middle East to US would also coincide with persistently-weak Group III base oils prices that cut attraction of moving supplies to the US..· US base oils supplies account for largest share of global base oils exports to Africa in March 2025 for first time in seventeen months.· US supplies account for more than 40% share in Q1 2025..· Rising share of shipments highlights US’ persistent surplus supply and importance of Africa as key outlet for large portion of that surplus.· Rising share of US shipments highlights Europe’s dwindling surplus supply, especially to Nigeria.· Europe’s share of supplies for other key markets in Africa hold steadier..· Dynamic suggests main drop in supplies from Europe consists of spot volumes, while term supply holds steadier.· Dynamic similarly suggests main rise in supplies from US to Africa consists of spot rather than term volumes..· Europe’s Group I base oils supply likely to remain tight because of plant maintenance work during Q2 2025.· Tight supply likely to prolong dip in Group I base oils exports to markets outside Europe.· Europe’s Group I base oils exports to markets outside Europe fall to multi-year low in March 2025, after already dipping sharply in Feb 2025. .· Drop in shipments leaves Europe’s Group I exports to non-EU markets in Q1 2025 at lowest level for first three months of the year in at least five years.· Drop in exports reflects more limited availability of surplus supplies to clear at a time of year when refiners previously struggled with oversupply.· Drop in exports curbs opportunity for buyers in markets like Africa and Middle East to procure replenishment supplies at competitive prices.· Drop in surplus supplies forces overseas buyers to target other sources instead to cover requirements..· Europe’s Group II base oils supply shows signs of holding steady amid rangebound imports and regional output.· Europe’s imports from key producers of Group II base oils edge up to five-month high in March 2025..· Steady US base oils exports to Europe in March 2025 raise prospect of shipments continuing to hold in narrow range at least in early Q2 2025.· Rangebound Group II base oils supply contrasts with tighter availability of Group I base oils.· Dynamic could boost incentive for blenders to increase their use of Group II base oils in their lube formulations..· Europe’s total base oils exports to non-EU markets fall in Q1 2025 from year earlier for third time in four quarters.· Europe’s total base oils imports rise in Q1 2025 for fourth straight quarter..· Diverging supply trends highlight Europe’s tighter regional supply and growing reliance on base oils imports..· Europe’s Group III base oils supply likely to get boost from arrival of several shipments from Middle East and southeast Asia from late-May 2025.· Rise in supply would follow signs of slowdown in shipments from Middle East reaching Europe in April 2025.· Slowdown in shipments contrasts with pick-up in supplies from Spain and from Indonesia to northwest Europe so far in Q2 2025.· Firm shipment volumes from those markets already help to boost Europe’s Group III supply to four-month high in March 2025..· Tighter supplies from Middle East at start of Q2 2025 coincides with improvement in Europe’s Group III base oils price relative to VGO and other base oils grades..· Tighter supplies from Middle East and firmer shipment volumes from Spain and Indonesia coincide with further narrowing of spread between high end and low end of Europe's Group III base oils price..· Narrowing price-spread points to tighter availability of supplies without full set of OEM approvals..Global exports to Africa fall in March.S Korea’s April exports to US hold firm.Europe’s March Group III base oils supply rises.Americas/EMEA base oils demand outlook: Week of 26 May.Asia base oils supply outlook: Week of 26 May.Global base oils margins outlook: Week of 26 May.Global base oils cargo flows: Week of 26 May
