South Korea’s base oils exports to the US fell to a twenty-month low in December, extending a sustained slowdown in shipments to the country and pushing refiners to target alternative outlets just as global competition intensifies.

Total exports of less than 22,000 tonnes to the US in December fell from close to 60,000 tonnes in November and for the fifth time in six months year-on-year, Korea Customs data showed.

Any pivot towards other markets instead of the US is likely to face the challenge of an expected rise in Group III base oils production capacity  in India and the Middle East in the coming months.

Key Highlights

·         Fourth-quarter exports to the US fell to less than 120,000 tonnes, down from more than 140,000 tonnes in the previous three months and the lowest since the second quarter of 2024.

·         Full-year 2025 exports slipped below 520,000 tonnes, dipping for a third straight year to the lowest level since 2013.

·         Exports fell despite a heavy round of plant maintenance in the Middle East, which disrupted the flow of regional shipments to the US.

·         US Group III base oils imports rose by more than 10% in the first ten months of 2025 as a surge in shipments from Canada more than offset lower Middle East volumes.

·         Regular flows from the Middle East to the US resumed in recent months, with the trend extending into the start of this year.

Market Repercussions

The resumption of regular flows from the Middle East, alongside any sustained strength in shipments from Canada, would add to supply pressure in the US Group III market.

An expected rise in domestic Group III base oils production in 2026 would further intensify competition and weigh on import demand.

The dynamic is likely to add to pressure on South Korean refiners to redirect more premium-grade shipments to other regions instead even as supply also rises in some of those markets.