Thailand May Lubricants Demand Falls As Southeast Asia Rebalances

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Published on:

13 Jul 2026, 4:34 am

Summary

Thailand's lubricants demand fell for the first time in three months, as Southeast Asia's disruption-driven buying surge unwound
Lower demand helped offset weaker exports from Singapore, leaving Southeast Asia's base oils market closer to balance
China's growing surplus supply continued to expand its regional presence as it helped replace lost Singapore volumes

Thailand's lubricants demand fell in May for the first time in three months, as Southeast Asia's disruption-driven buying surge turned into a broader stock-clearing slowdown.

Lubricants demand fell 4% year on year to just over 35,000 kilolitres (31,000 tonnes), Ministry of Energy data showed.

The pullback stretched well beyond Thailand. Similar year-on-year declines across Japan, South Korea, Indonesia and the Philippines showed buyers across Asia working through inventories accumulated during earlier supply disruptions.

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Demand across Southeast Asia fell below 195,000 tonnes in May after exceeding 220,000 tonnes during each of the previous two months, industry and government data showed.

Graph showing monthly SE Asia demand vs Asia exports to SE Asia

Shortfall narrowsMinistry of Energy, General Administration of Customs, MOF and other government data

Weaker demand still absorbed a modest recovery in regional supply.

Asia's exports to Southeast Asia rose in May despite weaker shipments from Singapore as China and Taiwan increased deliveries into the region.

Exports still lagged demand for a fifth straight month, but the shortfall narrowed to its smallest this year, bringing the market closer to balance as regional base oils prices weakened.

Key Highlights

· Thailand's passenger car motor oil demand fell 11%, while heavy-duty engine oil demand remained broadly stable.

· Singapore's exports to Southeast Asia fell to their lowest level in more than three years, reducing its regional market share to a five-year low.

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Singapore’s May Base Oils Exports Fall To 6-Year Low

· China and Taiwan expanded shipments into Southeast Asia, as weak Chinese prices redirected surplus supply into regional export markets.

Market Repercussions

Southeast Asia's supply-demand balance improved as softer demand outweighed the market's ongoing supply disruptions.

Blenders continued prioritising inventory reductions, with weaker regional base oils prices giving them even less reason to secure additional spot cargoes.

The softer demand largely offset unusually weak exports from Singapore and the emerging slowdown in shipments from Taiwan, preventing a sharper tightening in regional availability.

The balance could prove temporary.

Seasonal demand typically strengthens from the second half of August. A continued slowdown in shipments from Singapore and Taiwan would leave Southeast Asia more exposed to a widening supply shortfall as consumption recovers.

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