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Q4 exports surge: Shipments to Southeast Asia, India and Middle East reach multi-year highs, driving Q4 2025 volumes to highest since Q1 2023
Market share growth: Exports to those key markets account for larger share of total shipments, easing pressure on other regions
Supply outlook: Rising regional production capacity could exceed local demand, triggering pick-up in flows to more distant markets
Asia’s base oils exports remained strong in December, lifting fourth-quarter volumes to a two-year high and putting pressure on buyers to absorb the wave of supplies.
A recovery in the region’s base oils margins during the final weeks of last year suggested that demand was sufficient to handle the rise in shipments.
Total exports rose to more than 680,000 tonnes and more than 2.0 million tonnes in the fourth quarter, government data showed.
The December volume was up 8% year on year, while the fourth-quarter volume rose to the highest since the first quarter of 2023.
Key Highlights
· Southeast Asia: December exports rebounded to close to 200,000 tonnes, recovering from a fifteen-month low in November that had lagged regional demand.
· India: Shipments recovered to more than 160,000 tonnes in December, up from a four-month low in November and well above typical monthly levels.
· Combined markets: Fourth-quarter exports to Southeast Asia, India and the Middle East rose to close to 1.20 million tonnes, the highest in at least seven years.
· Market share: Exports to these three markets accounted for 59% of Asia’s fourth-quarter shipments, up from 53% in the fourth quarter of 2024 and climbing to a multi-year high.
Market Repercussions
Asia’s base oils margins weakened during the fourth quarter but remained relatively firm, especially during the final weeks of the year even as the region absorbed a larger share of its growing export volumes.
Prices held steady or strengthened relative to the US and Europe during the fourth quarter, especially for light grades, even as more limited arbitrage shipments kept extra supplies off those markets.
The dynamic suggested that regional demand remained strong enough to absorb the rise in supplies.
It also underscored Asia’s large production capacity even ahead of the expected start-up of new units over the coming months.
Even with rising regional demand, the increase in supply is likely to spill over into more distant markets, ending a slowdown in such flows at the end of last year.
