Exports hold at third-highest level in more than six years
Exports in three months to November rise to highest in more than six years
Surge in shipments could trigger slowdown in early 2026
Asia’s base oils exports to the Middle East stayed unusually high in November for a third month, raising concerns that buyers could face bloated stocks and prompting a slowdown in import demand early next year.
Any pullback in buying would come at a time of year when surplus supplies from Asia, US and Europe often flow to the Middle East to offset weaker demand in their domestic markets.
Key Highlights:
· Asia exported more than 45,000 tonnes of base oils to the UAE and Saudi Arabia combined in November, down from more than 75,000 tonnes in October.
· Even with the month-on-month decline, November exports were still the third-highest in more than six years, underlining the scale of the recent surge in shipments to the region.
· Exports included irregular cargoes from Taiwan, China and Singapore, signalling persistent surplus supply across Asia in recent months.
· Combined Asia and Europe exports exceeded 88,000 tonnes in October, the highest level in more than six years, and above total global exports, including US supplies, of over 87,000 tonnes in September.
· The trend suggests combined Asia, Europe and US exports to the Middle East exceeded 65,000 tonnes in November, bringing three-month shipments to more than 245,000 tonnes.
· The volume compares with typical three-month levels of less than 130,000 tonnes in the year to August, highlighting the scale of the recent inflows.
· The surge in shipments more than offset the drop in supply during plant-maintenance in Saudi Arabia.
Market Implications:
The expected resumption of normal export flows from Saudi Arabia in early 2026 would add supply to a regional market that already absorbed unusually large inflows during late 2025.
Plentiful supply and concern about exposure to lower prices could incentivize buyers to draw down existing stocks before seeking replenishment cargoes.
Such a strategy could complicate moves to divert surplus base oils from Asia, Europe and the US to the Middle East early next year.