· US Group II base oils prices edge up versus vacuum gasoil (VGO) as crude prices correct lower.· Firm, rangebound base oils margins sustain incentive for refiners to maintain high output.· High output in Oct 2025 would help to cushion impact of scheduled plant-maintenance.· Output faces prospect of rising strongly following completion of plant-maintenance.· US base oils output rises to thirty-eight-month high in July 2025 following completion of plant-maintenance in H1 2025..· US base oils output could again rise above typical levels at year-end following completion of latest plant-maintenance.· Unusually strong domestic demand cushions impact of rise in output in July 2025, leaving US stocks at low levels..· Domestic demand unlikely to rise so strongly at year-end.· More muted demand, combined with rise in base oils output, would increase US refiners’ reliance on overseas markets to absorb more surplus volumes.· Any rise in surplus volumes at year-end would coincide with likely seasonal pick-up in surplus supply in Europe and structural rise in surplus supply in Asia..· Latin America’s base oils market shows signs of being well-positioned to take advantage of any rise in surplus supplies in overseas markets.· Brazil’s base oils supply lags demand in Aug 2025 by largest volume in more than four years..· Shortfall reverses gradual supply-build during most of previous four months, leaving blenders with balanced-to-tighter stocks.· Signs of pick-up in US shipments reaching Brazil in Sept 2025 likely eases any immediate tightness.· Balanced-to-tighter stocks curb buyers’ exposure to any downward price-pressure over coming weeks.· Balanced-to-tighter stocks give buyers leverage to tap any pick-up in availability of surplus overseas supplies at competitive prices over coming months..· Europe’s Group I base oils supply could remain readily available unless refiners cut run-rates.· Base oils margins remain at levels that curb incentive for refiners to implement such moves.· Europe’s Group I base oils supply rises to six-month high in July 2025, reflecting boost from completion of plant-maintenance work during preceding months..· Lack of any scheduled plant-maintenance work over coming months raises prospect of Group I supply holding at similar levels.· Steady Group I supply would increase importance of open arbitrage to outlets like South America or Middle East to place surplus volumes.· Recent resumption of Group I cargo shipments from Argentina instead suggests that markets in that region may add to competition rather than provide outlet to absorb surplus supply. · Europe’s shipment of Group I base oils to southeast Asia could also face slowdown in coming months.· Singapore takes delivery of unusually large shipment from UK in past week, adding to surge in supplies from Europe in Q3 2025..· Shipments help to remove supplies from Europe during summer months.· Recent start-up of new Group II unit in Singapore could now curb requirement for additional supplies from Europe..· Europe’s Group II base oils price-strength points to extension of balanced-to-tight supply fundamentals the market faced in early-Q3 2025.· Europe’s Group II base oils supply matches fifteen-month low in July 2025..· Rise in Netherlands’ refinery consumption cuts further the availability of supply in July 2025..· Drop in Group II supply cushions impact of seasonal slowdown in Europe’s lube consumption during summer holidays, curbing build-up of surplus volumes.· More manageable supply curbs pressure on sellers to clear surplus volumes or to cut prices.· Maintaining balanced Group II supply dynamics could be more challenging over coming months.· Group II market faces challenge of likely slowdown in Europe’s exports to southeast Asia in coming months and prospect of rise in surplus supply in US at year-end..· Europe’s Group III base oils supply likely to get boost from arrival of several shipments from Middle East in H1 Oct 2025, combined with steady flows from Spain.· Cargo of Group III base oils from Bahrain reaches northwest Europe in late-Sept 2025, with several more shipments from Bahrain and UAE arriving in early-Oct 2025.· Europe’s supplies of Group III base oils with OEM approvals show signs of holding steady.· Spain’s premium-grade base oils exports hold firm in Sept 2025 for third month, reflecting that dynamic..Netherlands’ July base oils supply falls.US’ July base oils demand rises.Brazil’s August base oils supply lags demand.UK’s July base oils output falls.Americas/EMEA base oils demand outlook: Week of 6 October.Asia base oils supply outlook: Week of 6 October.Global base oils margins outlook: Week of 6 October.Base Oil News stories and analysis also available on ICIS platform
