S Korea’s January Exports To India Stay Elevated, Rebound to UAE

South Korea’s base oils exports to India edged higher in January, reinforcing signs of sustained requirements for overseas supplies to meet growing domestic lubricants demand.

Exports to the Middle East also rose, pointing to resilient regional fundamentals even after the restart of a key base oils unit in Saudi Arabia at the start of the year.

Total shipments to India rose to close to 102,000 tonnes in January, up from less than 101,000 tonnes in December and 30% higher year on year, Korea Customs data showed.

The year-on-year increase was for the fourth time in five months and underscored India’s continued structural reliance on imports to balance tight domestic supply-demand fundamentals.

Key Highlights

·         Exports to India held at elevated levels for the fifth time in six months, despite domestic base oils output rising to a two-year high in December.

·         Sustained high export volumes suggested that higher domestic output remained insufficient to meet growing lubricants demand.

·         South Korea’s exports helped to offset still-lower shipments from Saudi Arabia and curbed the need for arbitrage cargoes from US unless prices were at competitive levels.

·         South Korea’s exports to the UAE rebounded to more than 22,000 tonnes, recovering from an eleven-month low of 9,300 tonnes in December.

·         Volumes remained below average monthly levels of more than 34,000 tonnes in the three months to November, when buyers built stocks ahead of year-end maintenance.

·         Shipments were still well above typical monthly levels of less than 13,000 tonnes in the first half of 2025, when demand rather than maintenance was the key driver for supplies.

Market Repercussions

South Korea’s elevated exports to India at the start of 2025 suggest that strong domestic lubricants demand continues to outpace incremental increases in domestic base oils production.

Base oils prices that sustain the economics of shipments to India reinforce signs of ongoing buying interest in Asia-origin supplies.

The rebound in exports to the UAE similarly points to firm underlying regional demand even after the restart of the base oils unit in Saudi Arabia.

Additional plant-maintenance work in the Middle East later this year, combined with the absence of any imminent start-up of new regional production capacity, could extend firm demand for South Korea supplies through most of 2026.