· US base oils export prices extend fall versus feedstock/competing fuel prices..· Increasingly firm heating oil premium to crude oil compounds weakness of base oils prices.· Diverging price trends could prompt moves to divert more feedstock supplies into diesel pool.· Any such moves could help to limit pace of any build-up of surplus supplies.· Increasingly feasible arbitrage opportunities to growing number of outlets could speed up removal of any surplus supplies.· US Group II export price-discount to prices in southeast Asia widens to steepest level in more than a year..· Rising number of arbitrage opportunities for US supplies contrasts with less competitive prices in Europe, adding to attraction of lining up more US shipments to overseas markets.· Supply in Americas market likely to remain more reliant than usual on shipments from US, with arbitrage from Asia to Americas increasingly hard to work..· Latin America’s base oils supply could stay snug even if demand slows.· Brazil’s base oils supply exceeds demand in June 2025 for second time in three months..· Surplus stays small even with higher-than-usual supply and falling lube demand.· Small surplus reflects Brazil’s ongoing requirement for large volumes and reliance on imports to meet those requirements. · Surplus stays small even as Brazil’s imports account for growing share of country’s supply in Q2 2025..· Growing requirement for imports to cover domestic consumption could limit size of any dip in demand for shipments from US..· Group III price-premium to Group II base oils remains unusually low in US, Europe and Asia even after rising in Q2 2025..· Group III price-premium remains low even as global imports of premium-grade base oils from UAE and Bahrain fall to thirty-five-month low in May 2025..· Group III price-differentials could face more pressure following expected recovery in supplies from UAE and Bahrain in coming months..· Europe’s base oils supply likely to get boost from seasonal slowdown in demand, end of plant-maintenance work and open arbitrage to the region from multiple markets.· Arbitrage to move surplus supplies from Europe to markets like Middle East stays hard to work.· Europe Group I export SN 500 price-premium to prices in Middle East edges down to lowest level in more than a year..· Even so, persistent price-premium makes arbitrage hard to work.· Less feasible arbitrage suggests any surplus supply in Europe remains at manageable levels, curbing need for spot shipments to overseas markets.· Less feasible arbitrage could conversely trigger faster rise in surplus supply and complicate removal of the volumes.· Europe’s Group III base oils supply from Spain shows signs of reverting to more typical, higher levels in July 2025 after dip in shipments in June 2025.· Improving supply, and pick-up in flows to northwest Europe, would boost availability of base oils with full set of OEM approvals..· Rebound in Saudi Arabia’s base oils exports to South Africa in June 2025 could help to reverse recent slide in that country’s base oils supplies this year.· South Africa’s base oils imports fall by more than 25% in first five months of 2025 to three-year low amid dip in shipments from Europe, Middle East and especially the US..· South Africa’s reliance on imports to cover all its base oils requirements magnifies impact of drop in shipments.· South Africa’s reliance on base oils imports for its requirements exposes the country to factors that impact supply in those source-markets such as plant-maintenance.· That exposure boosts incentive to expand its sources and curb over-reliance on any one individual market.· That exposure boosts incentive to line up sufficient storage capacity to help to manage fluctuations in supply in source-markets.· Any rise in stocks would then expose buyers to price-volatility of those supplies..· In West Africa, Nigeria’s reliance on spot shipments for large share of its base oils imports similarly exposes it to change in supply fundamentals in source-markets.· Global base oils exports to Nigeria fall to one-year low in May 2025, reflecting that dynamic..· Seasonal slowdown in demand during monsoon season could cushion impact of drop in shipments.· Pick-up in flows from Argentina and Egypt to Nigeria in recent weeks points to ongoing buying interest.· Pick-up in flows also points to increasingly regular availability of surplus volumes from other sources.· Availability from other sources could trigger rise in competition for outlets like Nigeria when surplus availability rises.· Such a pick-up in supplies is likely in the coming months..Americas/EMEA base oils demand outlook: Week of 28 July.Global base oils exports to Africa fall in May.Brazil’s June base oils supply stays high.Saudi Arabia’s June Yanbu/Jeddah base oils exports rise.Asia base oils supply outlook: Week of 28 July.Base Oil News stories and analyses also available on the ICIS platform
