· US base oils demand could be steadier amid rangebound prices and signs of more muted pressure from any surplus supply..· US base oils demand typically rises in month of October from September, before falling in month of November.· Demand could be lower than usual as buyers and distributors work down stocks built up as buffer against weather-related supply disruptions during Atlantic hurricane season..· Surplus supply could also be lower than usual, balancing out lower demand.· Supply could be lower because of shutdown of key base oils unit for maintenance work, as well as pick-up in export cargoes to markets like India in final weeks of Q3 2025.· US domestic-price premium to export prices holds in relatively narrow range since start of Q2 2025 and into beginning of Q4 2025..· Steady price-differentials contrast with widening domestic-price premium around same time in 2023 and 2024 in response to growing downward pressure on export prices.· Extension of steady domestic/export price-differentials and steady margins point to more balanced fundamentals this time.· That dynamic could face pressure if overseas demand for US base oils weakens in response to any pick-up in availability of supplies from Asia.· That region’s supply-demand balance stays unusually tight in Jan-July 2025 before stronger pick-up in surplus volumes in Aug 2025..· Asia’s tighter supply-balance in Jan-July 2025 coincides with unusually wide US Group II heavy-grade price-discount to prices in markets like India..· Wide discount facilitates steady flow of surplus US supplies to India during that period.· Asia’s tighter supply-demand balance and firm prices also make less necessary and less feasible the arbitrage to Latin America..· Any further rise in surplus supply in Asia could boost competition for outlets like India, Middle East and Latin America and put pressure on those markets’ CFR prices.· Scenario could leave US suppliers facing challenge of rising shipments from other sources and possibility of needing to match more competitive prices in response..· Growing overseas supplies and rising competition could start to limit or reverse surge in US flows to Pakistan in past year.· US supplies account for close to 25% of Pakistan’s imports in first eight months of 2025, up from 16% in 2024 and less than 1% in 2023..· US already faces challenge of rising flows from Taiwan to Pakistan in 2025.· Trend could extend to other key suppliers like South Korea and Singapore in coming months..· Latin America’s base oils demand could be more muted in face of slack lube consumption, regulatory changes in Mexico and sufficient supply.· Brazil’s demand for additional supplies could ease after base oils imports rebound to ten-month high in Sept 2025..· Pick-up in imports helps to replenish lower stocks and cushion impact of any short-term domestic base oils production issues.· Expectations of healthy availability of supply in overseas markets over coming months add to incentive for buyers to maintain lean inventories..· Europe’s base oils demand could be more mixed.· Limited arbitrage opportunities to clear surplus Group I base oils leave more supplies within the region.· Open arbitrage to move more Group II base oils to Europe from markets like Asia could add to regional supply..· Prospect of healthy availability of supply gives blenders leverage to maintain lower stocks and procure smaller volumes as and when required.· Demand for Group III base oils could get support from signs of tighter availability extending well into Q4 2025.· Europe Group III 4cSt (low) price-premium to Group I and Group II base oils holds firm or rises further in recent weeks..· Group III price-differentials extend rise despite more attractive arbitrage to move additional supplies to Europe instead of to other markets.· Steady-to-firm prices and tighter-than-expected supply add to incentive to procure more supplies of Group III base oils..· Increasingly competitive prices for Group I base oils from Russia continue to dampen Turkey’s demand for shipments from Europe.· Turkey’s Group I imports from Europe fall to multi-year low in Aug 2025, while shipments from Russia hold steadier..· Falling shipments from Europe coincide with import-price for supplies from Europe that rises in Aug 2025 to highest premium in more than two years vs supplies originating from Russia..Brazil September base oils imports rise.Global base oils arb outlook: Week of 13 October.Global base oils margins outlook: Week of 13 October.Asia base oils demand outlook: Week of 13 October.Pakistan’s August base oils supply rises.Base Oil News stories and analysis also available on ICIS platform
