Base oils exports fell to a nine-month low, cutting flows to Southeast Asia ahead of planned March maintenance
Exports to China rose to a near-two-year high, extending a year-on-year rise for a fourth month and adding to that country’s expanding domestic supply
Surging diesel margins and feedstock disruption risk could deepen the export slowdown beyond the maintenance period
South Korea’s base oils exports fell to a nine-month low in February, cutting flows to key global markets ahead of planned maintenance work and growing concern about Middle East supply disruption.
Total base oils exports fell to around 326,000 tonnes in February, down from close to 365,000 tonnes in January and 12% lower year on year, Korea Customs Service data showed.
The February slowdown preceded planned maintenance work in March that is likely to keep exports at lower levels for a second month, pressuring buyers in markets like Southeast Asia where inventories were already tight ahead of a seasonal rise in demand.
Key Highlights
· February base oils exports to Southeast Asia fell to less than 60,000 tonnes, down from more than 80,000 tonnes in each of the previous two months and the lowest since end-2024.
· Flows fell sharply to markets like Vietnam and Thailand, increasing pressure on buyers to seek supplies from Singapore.
· South Korea accounted for 42% of Thailand’s imports in 2025, down from 49% in 2024, reflecting its still-large share of the country’s requirements.
· Exports to China rose to the highest since March 2024, extending a year-on-year rise for a fourth straight month and mirroring similarly-firm shipments from Taiwan.
Market Repercussions
The sustained pick-up in shipments to China added to that country’s surge in domestic base oils output, boosting supply in a market with significant production capacity of its own.
Southeast Asia lacks that buffer.
Firm demand in recent months kept pressure on the region’s inventory levels ahead of a seasonal pick-up in demand from the end of the first quarter.
The slowdown in flows from one of the region’s key suppliers could compound that squeeze.
Tighter South Korean supply would typically provide an opportunity for Singapore to cover more of that demand and to boost its market share in some of those countries.
But Singapore faces growing pressure of its own, as surging diesel crack spreads increase the incentive to maximise middle distillate output at the expense of base oil run rates.
Feedstock supply uncertainty from the Middle East could further limit its ability to boost supply.