Middle East Group III disruptions entered a sixth month, keeping exports at multi-year lows and leaving alternative producers accounting for a larger share of global supply.

A separate wave of maintenance among other Group III producers threatens to tighten supply further in August, just as seasonal demand begins to recover across Asia.

South Korea and India continued filling part of the Group III shortfall, while Saudi Arabia increased Red Sea exports in June, supporting broader base oils supply.

Singapore became a net importer of base oils for the first time in five years, pointing to weaker domestic production and growing reliance on replacement cargoes from Europe and the US.

The global premium-grade shortage is creating tighter markets as well as clear winners, with SK Enmove reporting record base oils earnings as Group III margins surged.

HF Sinclair's planned Canadian base oils refinery closure increased the urgency for new Group III capacity to start on schedule, making replacement supply even more important from 2027.

Early signs of slower Saudi exports and fewer replacement cargoes into Singapore from Europe and the US suggested little spare supply remained ahead of August.

The tighter trade flows come in the middle of the Atlantic hurricane season, leaving buyers increasingly exposed to any disruption affecting US Gulf Coast production while Middle East supplies remain constrained.