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Imports extend fall for a second month, tightening domestic availability ahead of peak Q1 lubricants demand
Slump in Saudi, Iran and Iraq shipments coincides with subdued US arbitrage flows and a drop in South Korea supplies
Tight supply and seasonal demand support firm interest in overseas supplies, with US and Saudi cargoes showing signs of recovery
India’s base oils imports extended their fall in January, sliding to a seventeen-month low and keeping domestic supply tight ahead of a seasonal rise in consumption towards the end of the first quarter.
Total base oils imports fell to around 280,000 tonnes in January, slipping below the 300,000 tonnes threshold for the first time in ten months to the lowest since August 2024, provisional customs data showed.
The slowdown followed a drop to a ten-month low in December and contrasted with a sustained rise in India’s lubricants consumption, keeping domestic availability tight.
Key Highlights
· Imports from the Middle East slumped to their lowest since end-2022, with the decline driven by a broad pullback across the region’s major suppliers.
· Shipments from Saudi Arabia stayed unusually low for a second straight month, holding close to their weakest level in more than five years — even after the restart of a key base oils plant at the start of the year.
· A slump in shipments from Iran and Iraq extended into a fourth month, cutting supplies from a key source of Group I heavy neutrals.
· US arbitrage shipments of paraffinic base oils stayed unusually low for a second month, even as a slump in flows to Mexico increased pressure on US refiners to secure alternative outlets such as India.
· Imports from South Korea fell to an eleven-month low, despite persistently high output in the Northeast Asian country during the final months of 2025.
· Russian supplies stayed elevated for a fourth month, with cumulative shipments during that period exceeding total volumes during the eighteen months to September.
Market Repercussions
The slowdown in imports, combined with firm domestic demand, complicated blenders’ moves to build stocks ahead of a typical surge in lubricants sales during the final weeks of the first quarter.
Growing concern over potential supply disruptions from the Middle East in the coming weeks added to the incentive to hold larger inventories as a buffer against possible shipment delays.
Tighter availability and resilient domestic demand raised the prospect of stronger buying interest in additional overseas cargoes.
That interest already showed signs of translating into a pick-up in flows, with several US cargoes recently lined up to move to India, as well as a recovery in Saudi shipments this month.
