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South Korea's base oils output fell to a one-year low in April but declined less than the drop in total refined products output
Base oils' share of total refined products output rose to its highest since end-2021, pointing to continued prioritisation of the lubricants feedstock over diesel
With maintenance ending and prices remaining elevated, output was positioned to recover
South Korea’s base oils output fell to a one-year low in April, driven by scheduled refinery maintenance rather than a structural shift in product mix, pointing to a faster supply recovery as run rates normalise.
Output fell to 2.40 million barrels (339,000 tonnes) in April, slipping from 2.68 million barrels in March to the lowest since April 2025, Petronet data showed.
Feedstock constraints, refinery run-cuts and elevated diesel margins since early March had raised expectations that regional refiners would prioritise transport fuels over other products such as base oils.
A rise in base oils’ share of South Korea's total refined products output instead pointed to maintenance as the main driver of lower output.
Key Highlights
· Base oils output fell 10% from March, lagging the 17% fall in total refined products output to the lowest in more than a decade.
· Base oils accounted for 2.92% of total output, climbing from 2.69% in March to the highest since late 2021.
· Diesel output fell 21% year on year to the lowest in more than five years.
· Base oils supply lagged demand for a second straight month, but the shortfall narrowed sharply from March as an exports slump outweighed the drop in output.
· Base oils inventories fell to a six-month low but held well above consistently tighter levels throughout the second and third quarters of 2025.
Market Repercussions
The divergence between base oils and diesel output coincided with a surge in Asia’s base oils prices, especially for Group III grades, which continued to outperform transport fuels in April and May.
The dynamic pointed to maintenance rather than refinery economics as the primary driver of lower output.
With maintenance ending and regional prices still elevated, South Korea’s output was positioned to recover in May.
Higher output would ease concerns about tighter supply, curbing buyers’ urgency to lock in volumes.
Improved availability could instead incentivise buyers to limit procurement and reduce exposure to any price correction.
