Japan’s May Base Oils/Lubricants Demand Falls To Nine-Month Low

• Japan's base oils and lubricants demand fell to a nine-month low in May as domestic consumption declined for the first time in eight months

• Lower domestic demand freed up more supplies for export, with overseas shipments climbing to a five-month high

• The shift added to improving supply across Asia, reinforcing downward pressure on regional prices as buyers reduced inventories

Japan's base oils and lubricants demand fell to a nine-month low in May as domestic consumption weakened, freeing up more supply for export and adding to improving availability across Asia.

Total demand, comprising domestic consumption and exports, fell to less than 150,000 kilolitres (132,000 tonnes) in May from almost 185,000 kilolitres in April, Ministry of Economy, Trade and Industry data showed.

The volume slipped 11% from a year earlier to the lowest level since August 2025.

Weaker domestic demand drove most of the slowdown.

Domestic consumption fell 7% from a year earlier to around 120,300 kilolitres, after rising 30% in April and more than 40% in March.

The fall also broke the normal seasonal pattern, with demand declining from April to May for the first time in four years.

The slowdown freed up more shipments for export just as supply was recovering elsewhere in Asia, adding to a regional market already showing signs of moving back into surplus.

Key Highlights

• Domestic consumption accounted for 81% of total demand, down from 89% in April and the lowest share in a year.

• Exports recovered to around 28,500 kilolitres, rising from 20,000 kilolitres in April to a five-month high.

• The year-on-year decline in exports was the smallest in five months, pointing to overseas shipments beginning to recover.

Market Repercussions

Japan's weaker domestic demand increased the volume of base oils available for export at a time when regional supply was already improving.

The additional availability coincided with recovering production in South Korea, steady exports from Saudi Arabia and firm supply from China, reinforcing signs that Asia was moving from disruption-driven tightness toward growing surplus.

The improving supply outlook contrasted with slowing seasonal demand across much of Asia as the market entered the third quarter.

More readily available supplies, easing disruption concerns and weaker crude oil prices reduced buyers' incentive to maintain elevated inventories.

Blenders instead had growing incentive to draw down stocks and defer purchases, reinforcing downward pressure on regional prices.