Asia’s February Lubricants Demand Rises, Surplus Falls

Asia’s lubricants demand rose for an eighth straight month in February, tightening the regional supply balance and leaving a smaller buffer just as supply disruption began to feed through.

Total demand rose to more than 880,000 tonnes in February, up 11% year on year, METI, Ministry of Energy, Ministry of Petroleum and Natural Gas and other government data showed.

The volume excluded China.

The sustained rise in demand largely offset a strong rebound in Asia’s base oils supply since mid-2025, limiting the build-up of surplus volumes during the winter months.

It also left the region with a smaller buffer to absorb supply disruptions expected over the coming months.

Key Highlights

·         Demand in Southeast Asia rose more than 15%, while Northeast Asia saw steadier consumption.

·         Demand extended its rise in key markets such as India and South Korea in March, pointing to consumption well above more than 910,000 tonnes in March 2025.

·         Base oils supply fell to a four-month low in February but still rose 10% year on year and for a seventh straight month.

·         Output declined across producers including South Korea, Thailand and India.

·         The surplus of supply over demand narrowed to a four-month low of less than 50,000 tonnes, down from more than 150,000 tonnes in January.

Market Repercussions

Base oils supply would have needed to recover strongly in March to keep pace with rising annual consumption alongside a seasonal pick-up in demand.

Even with higher supply, the surplus would have remained relatively small or flipped to a shortfall if supply held steady or fell.

A tighter supply balance at the start of the second quarter mirrored a typical seasonal pattern, with blenders replenishing depleted stocks over the following months.

That replenishment cycle was likely to be more challenging this year, with feedstock supply disruptions and surging motor fuel prices complicating refiners’ production schedules.