The delivery of premium-grade base oils from the Middle East to key global outlets fell to a three-month low in May amid a slump in shipments from the UAE and Bahrain.The US, Europe and Asia took delivery in May of more than 165,000 tonnes of base oils from UAE, Bahrain and Qatar combined, government data showed.The volume fell from more than 290,000 tonnes in March and close to 250,000 tonnes in April.The drop in supply from the Middle East coincided with a seasonal rise in demand in those global outlets.Group III base oils prices in US, Europe and Asia rose relative to Group II base oils and feedstock prices in the second quarter of the year, reflecting the tighter fundamentals.A sustained fall in China’s Group III base oils output and plant-maintenance work in South Korea added to the drop in supply.But global Group III prices remained historically weak even with the fall in supply from multiple sources.The dynamic suggested Group III base oils prices could face additional pressure as supply begins to recover and demand slows during the summer months. Excluding Qatar, the size of the fall in imports from the Middle East in May was even sharper.Total shipments from Bahrain and UAE combined came to less than 40,000 tonnes in May..The volume fell by more than half from the previous month to the lowest since mid-2022.The drop in supplies coincided with the shutdown of Group III base oils units in both the UAE and Bahrain during the second quarter of the year.The US and Europe were most impacted by the slowdown, with shipments in May falling to a seventeen-month low.Asia’s imports from Bahrain and the UAE by contrast rose in May from the previous month, even with slowing demand in China.The increase mostly reflected a pick-up in India’s imports of Group III 4cSt and 6cSt base oils from the UAE.Unlike Europe and the US, India’s lube demand continued to hold firm during the first half of the year..US’ May base oils imports fall.Europe’s May Group III base oils supply holds firm.China’s June base oils output falls.Base Oil News stories and analyses also available on the ICIS platform
