Europe’s Group I base oils exports rebounded in December as a surge in shipments from the UK offset a slump in flows from Italy and Greece, tightening regional supply fundamentals heading into 2026.

Total Group I exports to destinations outside Europe recovered to more than 64,000 tonnes in December, up from a six-month low of 52,000 tonnes in November and 22% higher year on year, Eurostat and HMRC data showed.

Underlying supply fundamentals stayed tighter than usual for the time of year even with the rebound in exports.

Key Highlights

·         UK exports surged to a five-month high, with a large share of the shipments bound for key African markets and likely consisting mostly of term supplies rather than spot cargoes.

·         Excluding the UK, Europe’s Group I exports fell to less than 30,000 tonnes, down 30% year on year and the lowest level in seven months.

·         Italy’s exports dropped to a multi-year low, after plant-maintenance work slashed supply in October and November.

·         Hungary’s exports slipped to a six-month low after unexpected production issues at its sole plant from late October.

·         Greece’s shipments fell to the second-lowest level in nine months, following a wave of shipments to India and Middle East in October and November that cleared an earlier surplus.

Market Repercussions

The slump in shipments from continental Europe pointed to the absence of a sizeable overhang of spot volumes at a time of year when refiners typically face pressure to clear surplus supplies.

More balanced supply conditions curbed refiners’ need to adjust export prices to open arbitrage opportunities into markets like Africa or Asia.

Europe’s Group I export prices held increasingly firm relative to prices in other markets like Asia late last year, reflecting that dynamic.

The absence of a significant surplus carried into early 2026 similarly reduced the prospect of significant price-adjustments that often materialize at the start of the year.

More stable fundamentals and steadier price dynamics removed key factors that typically prompted buyers to delay stock-replenishment plans.