Pakistan's base oils supply held firm in May as higher domestic production and more diversified imports reduced the country's reliance on Singapore just as regional supply turned more volatile.

Supply, combining domestic output and imports, held close to 40,000 tonnes in May, OCAC and customs data showed. Supply rose 45% year on year, the fifth increase in six months.

Imports remained firm at around 26,000 tonnes, rising 47% from a year earlier and for a third straight month.

But import patterns shifted noticeably.

Singapore's share of Pakistan's imports fell to less than 30% in May from more than 40% during the first five months of the year, while South Korea and Taiwan both increased their share of inflows.

The shift coincided with a sustained slowdown in Singapore's exports as buyers increasingly turned to other suppliers including South Korea and Taiwan.

Key Highlights

·         South Korea's share of Pakistan's imports rose to 35% in May from a five-month average of 20%, while Taiwan's climbed to 30% from 18% over the same period and just 13% in 2025.

·         US shipments to Pakistan nearly disappeared, falling to 1% of imports in May from a five-month average of 17% and 21% in 2025.

·         Domestic production rose to its highest level in four years, supplying around one-third of Pakistan's base oils requirements.

·         Imports from Iran reached their highest level in more than three years, although volumes remained comparatively modest.

·         Domestic lubricants demand fell 10% year on year, the first decline in 14 months, with transport lubricants demand down 11% against the backdrop of weaker business confidence and rising inflationary pressure.

Market Repercussions

Pakistan spread its import risk in May, and the timing mattered as trade flows became increasingly volatile.

Singapore's exports have stayed weak for months, while US shipments to Pakistan nearly disappeared in May. South Korea and Taiwan absorbed much of the shortfall.

Higher domestic production added another layer of protection, reducing exposure to tighter regional availability and higher international prices in a market that still relied on imports for around two-thirds of its supply.

Those supply pressures were unlikely to ease quickly. Planned maintenance across Asia, continued feedstock constraints in Singapore and uncertainty around Middle East supply all pointed to a market where diversified supply lines mattered more than they did a year ago.