Output hits highest level since early 2022, outpacing domestic consumption and exports for a second straight monthProduction outpaces demand for a second straight quarter, adding to a supply surplus carried into early 2026Current overhang contrasts with the shortfall seen at end-2024 and first-half 2025 .South Korea’s base oils output rose in December to the highest in almost four years, adding to a growing supply overhang carried into 2026 as production continued to outpace domestic consumption and exports.Total output rose to 2.89 million barrels (406,000 tonnes) in December, up 13% year on year, Korea Petroleum Association data showed..The rebound in output for a fifth straight month reversed the impact of a sharp slump in the first half of the year, leaving full-year base oils supply close to 4.4 million tonnes, broadly in line with output levels seen in both 2023 and 2024..Key Highlights· December’s output reached the highest level since March 2022, contrasting with a slump in production to a twenty-two-month low in March 2025 and highlighting the volatility in output levels last year.· Fourth-quarter output climbed to close to 1.20 million tonnes, rising from already-high production of 1.17 million tonnes in the third quarter and marking the strongest quarterly level since early 2022.· Fourth-quarter output outpaced both domestic consumption and exports for a second straight quarter, adding to surplus supply..S Korea’s December Base Oils Exports Rise on Strong Asia Demand .· The surplus marked a sharp contrast with the fourth quarter of 2024 and first half of 2025, when South Korea faced a supply shortfall amid widespread planned and unexpected outages. .Market RepercussionsThe supply overhang heading into 2026 coincided with a rebound in regional base oils margins during the final weeks of last year, encouraging refiners to maintain firm operating rates despite the persistent surplus.The dynamic contrasted with the same period a year earlier, when South Korea’s supply shortfall extended well into 2025 following a wave of maintenance outages and unexpected disruptions..S Korea’s March base oils output falls.The tighter availability at the time coincided with regional light-grade margins that were much weaker than current levels before rebounding over the subsequent months.
