Supply balance stays tight as demand outpaces higher outputTight supply conditions sustain strong import requirements Import demand could hold firm as rising consumption offsets higher output.India’s base oils supply balance remained tight in December for a fifth month as strong domestic demand continued to outpace supply growth despite a pick-up in base oils output.The surplus of supply over demand narrowed to little more than 30,000 tonnes in December, down from more than 50,000 tonnes in November, Ministry of Petroleum and Natural Gas and customs data showed..Supply improved from a shortfall in the three months to October but remained well below typical monthly surpluses of more than 100,000 tonnes during the first seven months of last year..Key Highlights· December base oils supply, or output and imports combined, rose to more than 440,000 tonnes, climbing 3% year on year to a three-month high.· Supply rose as base oils output climbed 7% to a two-year high, offsetting a dip in imports to a four-month low..India’s December Base Oils Output Rises to Two-Year High.· Higher supply lagged demand growth, with India’s lube consumption rising 18% during the final four months of the year..India’s December Lube Demand Rises, Hits Record 2025 High.Market RepercussionsPersistently tight supply-demand conditions during the second half of last year underscored India’s continued reliance on imported base oils even as domestic output rises and new production starts to come online.India’s imported Group II base oils premium over FOB Asia prices held firm during the fourth quarter, with that strength extending into early this year and supporting increased flows from Asia suppliers.Singapore’s base oils exports to India rose sharply in the four weeks to end-January, while South Korea’s shipments to the country remained elevated in December for the fourth time in five months..S Korea’s December Base Oils Exports Rise to India, Slide to UAE.The pick-up in shipments highlighted India’s ongoing requirements for overseas supplies and reinforced its role as a key market for Group II grades in Asia, even as domestic capacity expands.
