· Asia’s Group II heavy-grade base oils cargo price-premium to US export prices widens in H1 July, further complicating arbitrage to Americas.· Asia's Group II light-grade price-discount to US export prices narrows, complicating arbitrage to Americas..· Asia’s firm Group II base oils prices contrast with steep price-discount to US export prices in Q2-Q3 2024.· Asia’s steep price-discount in Q2-Q3 2024 facilitated pick-up in arbitrage shipments to Americas.· Arbitrage shipments help to remove surplus volumes from Asia, balancing out impact of seasonal slowdown in demand..· Asia’s firm Group II prices this year complicate pick-up in arbitrage shipments, raising prospect of build-up of surplus supplies.· Asia’s firm Group II base oils prices could alternatively reflect lack of build-up of or need to clear surplus volumes so far this year.· Asia’s base oils supply falls in Jan-May 2025 to multi-year low..· Lower supply contrasts with rising demand, squeezing surplus volumes in Jan-May 2025..· Asia’s surplus supply typical rises during summer months amid completion of most plant-maintenance work and seasonal slowdown in demand.· Smaller surplus in Q2 2025 reduces size and speed of supply-build in Q3 2025..· Recent plant-maintenance and disruption to shipments from Iran could further limit speed and size of build-up of Asia’s surplus supply in Q3 2025.· India’s imports of Group I heavy neutrals fall to eighteen-month low in June 2025 amid drop in supplies from Middle East..· Lower supplies of Group I SN 500 could support stronger demand for Group II heavy neutrals.· Any signs of India’s lube demand holding at more elevated levels would provide additional support..· India’s lower Group I imports coincide with rise in CFR India Group I SN 500 price-premium to FOB Asia cargo price in H1 July to highest in more than a year.· Lower imports coincide with still-firm CFR India Group II N500 price-premium to FOB Asia cargo prices..· A more manageable supply-surplus in Asia would curb need for refiners to target more distant markets like Latin America, or prices that facilitated such shipments.· Signs of smaller-than-usual supply surplus, and Asia’s firm prices relative to US export prices so far in Q2-Q3 2025 point to such a dynamic.· Avoidance of need to move arbitrage shipments to Americas would leave that region more reliant on supplies from US.· Avoidance of additional flows from Asia to Americas would also curb pressure on adjustment in US prices in response to such arbitrage shipments. .India’s June Group I SN 500 imports fall.Asia’s May lube demand falls.Global base oils margins outlook: Week of 21 July.Asia base oils supply outlook: Week of 21 July
