India’s November Base Oils Fundamentals Turn More Balanced

India’s base oils supply-demand balance improved in November even as overall availability stayed tighter than usual.

Tight fundamentals, combined with robust domestic lubricants consumption, raised the prospect of sustaining strong demand for overseas base oils shipments.

India’s total supply, or domestic output combined with base oils and lubricants imports, edged up to more than 550,000 tonnes in November, Ministry of Petroleum and Natural Gas and customs data showed.

Total demand, or domestic lube consumption plus exports, eased to around 490,000 tonnes, down from more than 540,000 tonnes in October.

Fundamentals remained tighter than usual even with steady supply and lower demand.

Key Highlights

·         India’s base oils output rose to 106,000 tonnes in November, recovering from a one-year low in October, even with ongoing plant-maintenance work.

·         The gap between domestic base oils output and lubricants demand widened to a seven-month high of 285,000 tonnes, underlining India’s continued reliance on additional domestic or overseas supply.

·         The supply-demand balance stayed tight for a fourth straight month, contrasting with larger surpluses in the nine months to July.

Market Repercussions

India’s tighter fundamentals highlighted the country’s need for additional supply, which it covered in 2025 with rising imports.

India’s imported base oils cargo prices held at a premium that was sufficiently high relative to prices in Asia and the US to incentivize steady term and arbitrage shipments into the country.

India’s reliance on imports is likely to moderate in 2026 following the planned startup of new domestic base oils production capacity.

India will still require large import volumes to meet growing lube consumption.

But rising domestic output would cover a larger share of requirements, curbing the need for imported cargo prices to maintain such a wide premium over prices in source markets.