• Europe's Group I base oils supply eased from March's 14-month high but remained above year-earlier levels for a third straight month

• Group I proved more resilient than Group II and Group III, as Europe's broader production base and lower import dependence limited the impact of the supply disruptions

• The contrast pointed to Europe's structural vulnerability in premium grades, where reliance on fewer suppliers left buyers more exposed to disruption

Europe's Group I base oils supply held relatively firm in April despite broader supply disruptions as the region's diversified production base shielded it from the shortages affecting premium grades.

Regional Group I supply, comprising domestic production and imports, eased to less than 165,000 tonnes in April from more than 200,000 tonnes in March, according to Eurostat, Secretary of State for Energy and other government data.

March had been the highest monthly volume in 14 months. The April decline left supply close to the past year's monthly average and still up from a year earlier for a third straight month.

Group I was the outlier. Group II supply fell to a two-year low and Group III availability dropped to its weakest level in more than three years.

Key Highlights

·         Net Group I supply, less exports outside Europe, eased to less than 95,000 tonnes from almost 140,000 tonnes in March but remained up 28% from a year earlier.

·         Group I accounted for more than 42% of Europe's total paraffinic base oils supply, its highest share in 19 months and well above the 37% average in 2025.

·         Additional supply from Italy and firmer imports partly offset lower production in Spain, the UK, Poland and Turkey.

·         Group I prices increased far less than Group II and Group III since March, widening their discount to premium grades.

Market Repercussions

April exposed two different supply models operating in the European market.

Europe's Group I supply came from many domestic producers spread across the region, limiting the impact of outages or lower output at individual plants.

Premium grades depended on a much smaller number of major suppliers and greater import exposure, particularly from the Middle East for Group III base oils.

The disruption made the difference clear. Group I availability remained comparatively stable and prices rose more moderately, while shortages in Group II and especially Group III drove sharp price increases.

It also added urgency to Europe's planned expansion of Group II and Group III capacity.

A broader premium-grade production base would reduce Europe's exposure when any single producer or import route is disrupted, giving the premium-grade market more of the resilience already seen in Group I.