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China’s base oils exports hit a record high as competitive prices and ample supply encouraged refiners to send more barrels overseas
China is becoming an increasingly important alternative source of Group III and other base oils as softer domestic demand leave more supply available for export
The surge could have a lasting impact as Chinese suppliers establish themselves in markets that previously relied on other Asian and Middle Eastern sources
China’s base oils exports rose to a record high in July as competitive prices and ample supply let the country fill supply gaps left by disruptions in other markets.
Total base oils exports rose to 42,300 tonnes from 33,200 tonnes in June, General Administration of Customs data showed, extending a run of record or near-record shipments since May.
China's move from a producer and importer once focused on its own market into a structural supplier for the rest of Asia and other regions is one of the more significant shifts to emerge from this year's Middle East disruptions.
China's advantage also extended to Group III base oils. Like India, it has been a major importer of the premium-grade base oils.
The shortfall out of the Middle East, and the price premium it has opened up in Europe and the US, has instead given Chinese refiners reason to boost output and direct more supply to overseas markets.
Key Highlights
· Base oils exports rose 236% year on year in July, while volumes over the three months to July were up more than threefold versus the same period a year earlier.
· Exports to Southeast Asia rose to more than 29,000 tonnes in July, the second highest volume on record, driven by a surge in shipments to Singapore.
· Total base oils and lubricants exports reached 83,000 tonnes in July, more than double year-earlier levels and a record high.
· Base oils and lubricants exports accounted for a record 16% of China’s base oils output, up from less than 10% in 2025 and the first quarter of this year.
· Base oils imports fell to 78,000 tonnes, the lowest in 33 months, narrowing the gap between imports and exports to its smallest level on record.
Market Repercussions
The longer China's exports stay elevated, the harder it may become for Singapore, Taiwan and other established suppliers to reclaim market share as Chinese barrels expand in existing markets and gain a foothold in others.
Its steadiness, at a time when those other suppliers have struggled with disruptions of their own, strengthens its appeal to buyers seeking reliable supply and diversification of sources.
With its reputation and market share established, the flows could prove durable even once Middle East shipments eventually resume and Singapore’s exports recover.
That could leave incumbents competing against a wider field than before the disruptions began, with China and India adding to the traditional Middle Eastern and Asian supply base.
