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Global Group III base oils imports from the Middle East surged to a ten-month high in January, with Qatar shipments reaching a 40-month high
The January surge boosted stocks ahead of the halt in Middle East flows, delaying but not preventing the supply shortfall expected in the second quarter
The scale of the shortfall raised the prospect of lubricant formulation adjustments to substitute other premium-grade base oils
Global imports of Group III base oils from the Middle East rose to a ten-month high in January, boosting stocks ahead of the halt in flows from the region in March.
The US, Europe and Asia imported more than 290,000 tonnes of base oils from Qatar, Bahrain and the UAE in January, Census Bureau, Eurostat and other customs data showed.
The volume rose from close to 200,000 tonnes in December to the highest since March 2025.
Shipments rose at a time of seasonally weaker demand, pointing to a build-up in surplus volumes and subsequent pressure on Group III prices.
The disruption to Middle East shipments from the end of February instead increased the value of those inventories by cushioning the impact of the subsequent supply shortfall.
Key Highlights
· Global imports from Qatar rose to a 40-month high, accounting for around 70% of total Middle East shipments.
· Imports from the UAE rose to a four-month high, exceeding typical monthly volumes over the past year.
· US imports rose to a nine-month high, and Asian imports to a ten-month high, while Europe’s inflows slipped to a six-month low.
· Asia’s imports from the Middle East then fell to an eight-month low in February amid a dip in flows from Qatar.
· Total Group III exports from Indonesia, Spain and Finland, and South Korea’s shipments to the US and Europe, came to more than 130,000 tonnes in January, in line with typical monthly levels over the past year.
Market Repercussions
The arrival in March of February-loading supplies from the Middle East was likely to keep volumes at adequate levels through the first quarter.
Supply was then likely to tighten in the second quarter, reflecting the absence of typical replenishment volumes as seasonally-stronger demand consumed stocks faster.
The scale of Middle East shipments, especially relative to flows from other Group III refiners, made replacing those volumes from other sources effectively impossible.
The shortfall pointed to the need for a swift resumption of Middle East flows, or an adjustment in lubricant formulations to substitute other premium-grade base oils.
