South Korea’s base oils exports fell to a six-month low in November, tightening regional supply at a time when Asia-Pacific demand faced a seasonal slowdown.

The decline in shipments could limit the build-up of surplus base oil volumes across Asia in the near term.

The underlying factors behind the fall in exports - whether the drop was supply-driven or demand-driven — were likely to be a key distinction in determining the longer-term impact of the lower volumes.

Supply Balance and Margin Pressures

The drop in exports coincided with increasingly weak base oils margins earlier in the fourth quarter, strengthening the incentive for refiners to cut output rather than push volumes into a softer export market.

A recent recovery in margins could curb the pressure for such moves.

A drop in exports because of lower production would leave South Korea better positioned to avoid a large surplus and retain leverage in negotiations with buyers.

A demand-driven fall would conversely raise the risk of rising inventories that would need to be cleared in coming months.

Any surplus volumes would face additional pressure with new base oils production capacity expected to start up in India and the Middle East in the coming months.

Key Export Trends – November

• Total base oils exports fell to 332,000 tonnes, down from a 14-month high of 395,000 tonnes in October

• Shipments were the lowest since May, when recent and ongoing plant maintenance in South Korea curtailed output and reduced available stocks

• A surge in exports in September and October had helped rebalance inventories, easing the need to maintain elevated shipment levels

• The pullback in November coincided with Taiwan’s exports falling to a 10-month low, cutting combined flows from the two markets to a seven-month low

• South Korea’s shipments to southeast Asia slumped to an 11-month low in November

• The decline followed a dip in southeast Asian demand in October, which lagged export flows and triggered a build-up of surplus volumes

• Lower shipments in November could help unwind excess supply in southeast Asia

Regional Market Implications

The slowdown in South Korea’s base oils exports reduced near-term supply pressure across Asia, particularly in southeast Asia, where surplus volumes had been rising.

Whether the decline reflected temporary supply constraints or weakening export demand is likely to influence trade flows, pricing dynamics, and producer strategy into early 2026.