South Korea’s base oils exports fell to a 19-month low in April, deepening a Northeast Asia supply slowdown and amplifying the impact of ongoing disruptions to Middle East shipments.

Total base oils exports fell to 276,500 tonnes in April from close to 390,000 tonnes in March, the lowest since September 2024 when plant-maintenance work curbed flows, Korea Customs Service data showed.

Exports fell from a five-month high in March, when buyers accelerated procurement ahead of expected second-quarter supply constraints as refinery maintenance coincided with feedstock disruptions from end-February.

Buyers’ higher inventories cushioned the initial impact of the April slowdown. But strong first-quarter demand in markets such as Southeast Asia and India already left stocks under pressure, increasing the need for improved supply in the coming months.

Key Highlights

·         Exports to Southeast Asia fell to a 16-month low as shipments to Thailand and Singapore slumped.

·         Shipments to Northeast Asia accounted for 27.5% of total exports, the highest share since end-2023, as supplies to the region remained steady.

·         Exports to Japan climbed to a 17-month high and extended their year-on-year increase for a fifth straight month.

Market Repercussions

The fall in South Korean exports coincided with a slide in Taiwan’s April base oils shipments to a 19-month low, squeezing availability from two of the region’s principal supply sources and increasing its reliance on Singapore for incremental Group II volumes.

The pause in Middle East Group III shipments compounded the pressure.

The loss of those supplies increased reliance on South Korea especially for premium-grade supplies for markets such as Japan, which typically imports around 8,000 tonnes/month of base oils from Qatar.

Stronger regional requirements for South Korea’s Group III base oils in turn curbed availability for other markets seeking alternative supplies to cover the pause in flows from the Middle East.