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Premium-grade imports from the Middle East fell in May to the lowest in more than six years, extending the collapse in global Group III supply
Additional exports from China, India and other suppliers helped ease the disruption but fell well short of replacing the volumes normally supplied from the Persian Gulf
With summer maintenance approaching and Hormuz still closed, the premium-grade market faces an extended period of tight supply
Premium-grade base oils imports from the Middle East fell to their lowest level in at least six years in May, leaving alternative supplies well short of covering the loss of one of the world's largest sources of Group III exports.
Combined imports from Bahrain, Qatar and the UAE into Asia, Europe and the US fell below 50,000 tonnes in May from little more than 100,000 tonnes in April, Eurostat, Census Bureau, and other government data showed.
Imports had exceeded 185,000 tonnes as recently as March, before the Strait of Hormuz disruption began reshaping global trade.
The sharp decline exposed the scale of the supply gap facing the premium-grade market. Middle East producers had typically supplied close to 210,000 tonnes/month during the previous two years, accounting for more than one-third of Europe's Group III supply and more than 40% of US imports and China Group III supply.
The size of the gap drove a surge in Group III prices that far outpaced gains for other base oils grades.
Key Highlights
· US imports fell to less than 100 tonnes in May, from typical volumes of more than 80,000 tonnes a month in 2025, the sharpest single-market collapses of the disruption.
· European imports fell to less than 5,000 tonnes, against typical monthly volumes above 54,000 tonnes.
· A shipment from Qatar to Hong Kong helped Asia's imports hold up better than the US or Europe.
· India's shipments to the US surged around the same time as the near-complete pause in Middle East flows there.
Market Repercussions
The collapse in Middle East exports is reshaping global trade flows, widening arbitrage and accelerating exports from suppliers including China and India.
Even so, those additional volumes remained well short of replacing the Middle East shortfall.
Scheduled maintenance across Europe and Asia threatened to deepen the squeeze further, just as buyers had become increasingly dependent on those regions for supplies.
With the Strait of Hormuz still closed, the premium-grade market faced little prospect of a near-term recovery in Middle East shipments. That increasingly left blenders with two options: reformulate using other base oils grades where possible, or reduce production of the lubricants that required Group III.
