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Europe’s Group II base oils supply rose to a four-month high in December, reversing November’s slowdown and lifting full-year volumes to a four-year high as concern over Group III availability made the grade’s stable supply an increasingly attractive alternative feedstock.
Total Group II supply rose to more than 160,000 tonnes in December, rebounding from a 19-month low of less than135,000 tonnes in November, CBS Statline, Eurostat and other government data showed.
The stability of quarterly supply volumes added to the attraction of Group II base oils at a time when geopolitical risk in the Middle East raised concern about security of Group III flows into Europe.
Key Highlights
Fourth-quarter Group II supply came to 450,000 tonnes, holding in the middle of a 433,000 to 470,000-tonne range across all four quarters of 2025.
The rangebound quarterly volume contrasted with 2024, when supply swung from less than 280,000 tonnes to more than 550,000 tonnes.
Full-year 2025 Group II volumes rose to more than 1.80 million tonnes, climbing 5% year on year to a four-year high.
The US and the Netherlands accounted for more than 93% of Europe’s Group II supply in 2025, down slightly from a 95% share in 2024.
Market Repercussions
The rangebound supply and its reliable origin, mostly from the US and the Netherlands, could boost demand for Group II base oils as an alternative premium-grade lubricant feedstock, covering for any slowdown in Group III flows from the Middle East.
The Middle East is home to three major Group III base oils plants located in the UAE, Bahrain and Qatar.
But Group II supply could also face restraints, with a seasonal rise in US consumption in the coming months cutting the volume of extra supplies available for markets like Europe.
Surging diesel crack spreads add further pressure, incentivizing US refiners to maximise middle distillate output over base oils.
The combination could tighten Group II availability in Europe at the same time as demand for it rises.
