India’s January Lube Demand Rises, Keeps Base Oils Balance Tight

India’s lubricants demand rose in January for a seventh straight month, sustaining pressure on base oils supply from domestic and overseas sources to keep pace.

Total lubricants consumption rose to 405,000 tonnes in January, up 3% year on year, Ministry of Petroleum and Natural Gas data showed.

The sustained rise in consumption kept India’s base oils supply-demand balance unusually tight through the second half of last year, with early signs suggesting the trend is extending into the start of this year.

Key Highlights

·         Monthly lubricants consumption exceeded 400,000 tonnes for a fifth straight month, highlighting India's sustained demand growth.

·         Before September 2025, it took 25 months for demand to exceed that level five times.  

·         India’s lubricants consumption typically peaks in the first quarter of the year as blenders seek to meet annual sales targets before financial year-end in March.

·         Broader demand indicators remain supportive, with India’s automobile sales rising in January for a sixth straight month, with strength across everything from two-wheelers to passenger cars and tractors.

Market Repercussions

Sustained demand growth is likely to magnify the seasonal first-quarter pick-up in consumption, keeping pressure on base oils supply to keep pace.

An expected increase in India’s domestic base oils production capacity is likely to cover a growing share of rising demand.

But the pace of consumption growth, and uncertainty over the timing of the market-availability of the new supplies, are likely to sustain requirements for large import volumes in the interim.

A pick-up in shipments from the US to India in recent months, including in January and February, pointed to continued demand for additional overseas supplies.