Supply stayed thinner through the seasonal lull, with Taiwan, Saudi Arabia and Singapore's domestic exports all below normal in August. The slowdown masked some of that weakness, but the buffer is fading as demand starts to recover.
That leaves a narrower group of suppliers to cover the gap. South Korea sustained unusually high output for a third straight month in July, replacing Group III volumes lost from the Middle East, but high exports leave little room to build stocks that could offset maintenance elsewhere.
China is another source of replacement supply, with record base oils exports in July and Group III supply holding firm despite collapsing Middle East imports. Firmer domestic demand and weaker imports could limit how much more it can export.
India is moving the other way: base oils output fell to an eight-month low in July as lubricants demand recovered, widening an already more-than-six-year-wide shortfall and leaving less supply available for export even before a seasonal recovery.
The Middle East is providing little relief. Asia's premium-grade imports from the region stayed near a multi-year low in July, and the modest pick-up reflected isolated shipments rather than a sustained return of supply.
Singapore's own recovery was similarly limited, with August's gain driven mostly by re-exports rather than domestic shipments, adding to the region’s reliance on other suppliers.
A wave of Group III maintenance is gathering pace, Taiwan and Saudi Arabia face shutdowns from October, and US supply is tight as hurricane season peaks. With refiners' growing incentive to favour diesel too, the market heads into the coming weeks with fewer buffers and more pressure on suppliers.