Imports rise on strong inflows from US and arbitrage shipments from Asia
Arbitrage supplies include rare shipment from Taiwan
Signs of rising supply at year-end increase need to deter additional arb shipments
Europe’s Group II base oils imports climbed to a four-month high in October, driven by strong inflows from the US and unusually high shipments from alternative sources such as Asia.
Total imports rose to over 68,000 tonnes, up from less than 56,000 tonnes in September, government data showed.
The US accounted for most of the shipments, but more than 9,000 tonnes came from other sources, including a rare cargo from Taiwan.
The shipment was just the second from Taiwan in the past eight years and coincided with improved Group II availability in Asia and elevated Europe Group II prices relative to other markets during the third quarter.
High European prices and surplus supply in Asia made Europe an attractive destination for arbitrage cargoes.
Europe’s Group II imports showed signs of remaining elevated in November and December as a wave of cargoes from the US headed to the region.
Supplies would get a further boost if regional base oils production stayed at or above typical 2025 levels.
The prospect of higher Group II supply and weaker demand at year-end raised the risk of growing stocks heading into early 2026, increasing the need to deter more arbitrage shipments from moving to Europe.
