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India's base oils output fell to a six-month low in May, while lubricants demand rose for the first time in three months
Imports held steady despite lower domestic production, leaving supply broadly matching demand after April's large surplus
Strong domestic output and comfortable supply reduced the need for stock-building, leaving India less exposed to global disruptions than many import-dependent markets
India's base oils output fell to a six-month low in May, but supply remained sufficient to meet demand and support exports, pointing to a market better insulated from the disruptions that tightened availability elsewhere.
Output slipped to 129,000 tonnes in May from 152,000 tonnes in April, Ministry of Petroleum and Natural Gas data showed. Output still rose 22% year on year, extending its rise for a sixth straight month.
The fall was relative. Output remained well above levels before new capacity started up around end-2025, structurally changing India's supply position.
The combination of steady imports and elevated domestic output left total supply matching or exceeding demand for the third time in four months, reducing the need for the aggressive stock-building seen in other major markets during the disruption period.
The contrast meant that while buyers elsewhere accelerated purchases to protect against supply disruptions, Indian buyers largely continued to rely on regular supply arrangements, even as overseas markets tightened.
Key Highlights
• Total supply matched demand in May after exceeding consumption in April by the largest volume in 28 months.
• Supply exceeded demand in three of the past four months despite stronger seasonal consumption and global supply disruptions.
• Unusually large shipments to Singapore and Indonesia in April pointed to export availability rather than domestic supply pressure.
Market Repercussions
Supply remained sufficient despite lower output and stronger demand.
Output remained well above year-earlier levels, reducing India's exposure to the disruption-driven tightness that many other major importing markets faced.
Higher domestic output and steady imports over the coming months would coincide with slower demand during the monsoon season, further curbing import requirements.
Weaker base oils prices added to buyers’ incentive to hold back.
The combination pointed to a higher risk of supply exceeding demand as monsoon-season consumption slows, freeing up shipments for markets where supplies from domestic sources remain insufficient.
