Asia’s base oils exports to the Middle East stayed well above typical levels in January even after the restart of a key Saudi Arabian base oils unit, pointing to regional demand resilient enough to absorb the elevated volumes.

Asia’s total exports to the UAE and Saudi Arabia combined rose to more than 35,000 tonnes in January, up from 33,000 tonnes in December, various government data showed.

The January volume remained well above typical monthly levels of less than 25,000 tonnes in the first half of 2025, before a surge in flows ahead of the Saudi unit shutdown during the final six weeks of last year.

The persistence of the elevated flows into the start of this year suggested that demand was sufficiently strong to keep absorbing supply and limit a build-up of surplus volumes.

Key Highlights

·         Exports extended their rise even as Saudi Arabia’s base oils exports recovered in January following the completion of maintenance work.

·         Asia’s January exports included another large cargo from Taiwan, extending an increasingly regular flow of shipments from that supplier to the Middle East.

·         Shipments from the US and Europe typically add at least 20,000 tonnes/month to total global exports to the Middle East.

·         If repeated, monthly global exports to the Middle East could exceed 50,000 tonnes in January, holding at that level for a seventh straight month and up from average volumes of 40,000 tonnes in the first half of 2025.

·         An extension of the trend would lift first-quarter global exports to the Middle East well above year-earlier levels of less than 120,000 tonnes, though still below record levels of more than 240,000 tonnes in the fourth quarter of 2025.

·         The late-year surge in shipments lifted full-year 2025 global exports to a record of more than 670,000 tonnes, up from around 550,000 tonnes in 2024.

·         US exports to the Middle East rose to more than 140,000 tonnes in 2025, up from less than 100,000 tonnes in 2024 and around 65,000 tonnes in 2023.

Market Repercussions

Global exports to the Middle East could stay elevated in the coming months as buyers build inventories ahead of additional Saudi plant maintenance during the third quarter.

The dynamic could then reverse later in the year.

The expected start-up of expanded base oils production capacity after the shutdown could boost regional supply and trigger a shift in trade flows, forcing Asian, European and US refiners to redirect volumes to other markets at a time when competition for such outlets is already rising.