Singapore's base oils exports rose to a three-month high in July, but the recovery coincided with a matching surge in imports, allowing more domestic supply to be directed toward exports.

Singapore is a major supply source for Asian markets, so its sustained export slowdown compounded the region’s tighter availability in recent months. A recovery would be timely, coinciding with a seasonal pick-up in demand during the final weeks of the third quarter and preceding a round of plant maintenance work.

Exports rose to 143,000 tonnes in July, up from less than 120,000 tonnes in both May and June, according to Enterprise Singapore data. The volume was still the third-lowest in a year, and well below the roughly 180,000-tonne average in the year to April.

The improvement extended into August, adding to signs that the slump in exports has bottomed out.

But it coincided with an even sharper rise in imports, which surged to more than 139,300 tonnes in July, the highest in at least nine years.

The import surge left it lagging exports by less than 3,500 tonnes, down from more than 100,000 tonnes in the seven months to April and the smallest gap since June 2021.

But the share of re-exports was little changed, suggesting most of the imported material stayed in Singapore, and allowed more of the island-state’s domestic output to be directed toward exports.

Key Highlights

·         Exports to Southeast Asia improved to close to 69,000 tonnes, a three-month high, but still well below the more-than-81,000-tonne average in the year to April.

·         Exports to India stayed unusually low, below 17,000 tonnes for a second straight month, matching the lowest level in more than three years.

·         Imports from Europe surged to almost 46,000 tonnes, the highest since April 2021 and well above average monthly levels of less than 17,000 tonnes in 2025.

·         Imports from Qatar and the UAE also increased despite ongoing disruption to Hormuz shipping flows.

Market Repercussions

A sustained export recovery would require Singapore’s domestic supply to recover alongside exports, rather than relying on elevated imports.

The longer that takes, the more time rivals have to entrench themselves as alternative suppliers in Singapore's largest markets of Southeast Asia, India and China. South Korea remains the largest alternative source, but newer suppliers including China and India have also increased their own flows into Singapore during the slowdown.

Any renewed weakness in Singapore's exports would also coincide with a cluster of other supply risks, including scheduled maintenance in Taiwan and Saudi Arabia in October, Group III maintenance across the third quarter, and the continued weakness in Middle East imports to the region.

Those risks would leave the wider market even tighter just as seasonal demand starts to revive in the coming weeks, giving South Korea, China and India an even bigger opening to expand their share of Singapore’s traditional markets.