· US base oils demand likely to stay more muted.· Seasonal slowdown in demand in Q4 2025 incentivizes blenders to cut current stock levels.· Unexpectedly quiet Atlantic hurricane-season so far this year incentivizes blenders to start working down inventories that were built up to cover against supply-disruptions.· Demand could get support from signs that any supply-surplus remains manageable, curbing prospect of sharp price-adjustments.· Upcoming plant-maintenance in US and open arbitrage to markets like Europe, Middle East and India likely to cushion impact of slowing domestic demand..· Competitive US export prices sustain firm overseas demand in markets like India..· Reliance on spot market for large share of such shipments leaves US market more exposed to any short-term change in supply-demand fundamentals in those overseas markets.· US’ share of global exports to key markets in Africa extends fall in July 2025..· Market-share falls amid steady flows from Europe to Africa and rise in shipments from other sources like Egypt.· Contrasting trends could reflect seasonal dip in demand in markets like Africa impacting spot shipments more than term shipments.· Fall in US shipments to Africa in July 2025 magnifies impact of slowdown in exports to Mexico that month.· Extension of reliance on spot markets to clear large portion of surplus volumes increases risk of more volatile export flows in coming months.· Expected rise in global base oils supply in coming months could add to that volatility.· Dynamic increases importance of outlets like Latin America to absorb more supplies..· Latin America’s base oils demand could hold steady.· Region’s lube demand consistently exceeds base oils supply in recent months..· Tighter supply fails to trigger subsequent jump in demand for replenishment base oils supplies.· Dynamic suggests blenders are comfortable maintaining lower stocks and procuring smaller volumes more frequently.· Strategy of maintaining lower stocks gives blenders more flexibility amid concern about economic outlook and expectations of rise in surplus base oils supply in overseas markets.· Procurement of smaller volumes more frequently could complicate any moves by US suppliers to boost shipments to the region in coming months to trim any surplus in their domestic market.· Even so, Latin America’s reliance on US supplies to cover large share of its requirements likely to sustain steady demand for those shipments..· Mexico’s lube demand falls in July 2025 for eighth time in nine months..· Weaker demand adds to attraction of maintaining low base oils stocks.· Weaker demand mirrors fall in Mexico’s automobile production and sales in Aug 2025, combined with ongoing drop in industrial production. · Mexico’s industrial oils consumption falls in July 2025 at slowest pace in fourteen months.· More muted contraction could point to industrial activity starting to bottom out.· Any extension of improvement in industrial oils consumption would raise prospect of rise in total lube demand..· Europe’s base oils demand likely to stay cautious amid ready availability of most grades, downward pressure on prices and signs of mixed lube demand.· Dynamic incentivizes blenders to maintain lower stocks and to top up with additional volumes if required.· Lube consumption continues to show mixed signals.· France’s lube demand falls in July 2025 for third time in four months..· Weaker demand contrasts with firmer consumption in southern Europe.· Weaker demand leaves consumption in major European markets barely growing in July 2025..· Extension of trend through Q3 2025 would limit size of seasonal recovery in consumption in Sept 2025..· Europe’s base oils demand shows signs of holding firmer for premium grades than for Group I grades.· Europe’s total base oils exports to markets outside the region fall in July 2025 for fifth time in six months from year-earlier levels.· Europe’s Group I base oils exports to markets outside Europe rise in July 2025 for third time in four months..· Rise in Group I shipments points to even steeper drop in exports of premium-grade base oils in July 2025.· Dynamic points to weaker regional demand and subsequent rise in surplus availability of Group I base oils and vice-versa for premium-grade base oils..· Demand in Middle East could start to revive as buyers seek to replenish stocks.· Fall in base oils exports to Middle East in Aug 2025 follows surge in global shipments to the region in July 2025..· Surge in shipments in July 2025 triggers slowdown in demand as buyers consume existing stocks.· Fall in shipments to the region in Aug 2025 coincides with ongoing dip in typical flows from Iran.· Slowdown in shipments, combined with consumption of existing stocks, could trigger subsequent moves to line-up replenishment volumes.· Demand for replenishment volumes could see pick-up in buying interest for Group II heavy grades.· Healthy availability and competitive price for Group II N500 contrasts with tighter availability and higher price for Group I supplies..· Dynamic boosts attraction of using more of the premium-grade base oils instead of Group I supplies..· Global base oils exports to key markets in Africa rise in first seven months of 2025, pointing to growing requirements in those markets..· Rising global base oils supply, and weak demand in US and Europe, magnify importance of growth-markets like Africa..Global exports to Mideast Gulf fall in August.Global exports to Africa fall in July.Latin America’s July lube demand rises.Global base oils margins outlook: Week of 22 September.Asia base oils demand outlook: Week of 22 September.Base Oil News stories and analysis also available on ICIS platform
