· Asia’s Group II base oils cargo prices hold firm versus US export prices so far in Q4 2025..· Firm prices complicate arbitrage to move surplus supplies to markets like Latin America, suggesting Asia’s supply-demand fundamentals remain balanced to tight.· Asia’s Group II base oils price-premium to Singapore gasoil price stays at similar levels so far in Q4 2025 to end-Q3, even after recent rebound in crude/gasoil prices..· Firm margins add to signs of balanced-to-tight fundamentals.· US Group II base oils export prices strengthen vs prices in Europe and Asia in recent weeks..· Firmer export prices make less attractive the arbitrage to Europe and Asia, suggesting US supply-demand fundamentals remain relatively balanced..· US Group II base oils export-price premium to vacuum gasoil (VGO) holds firm..· Firm US margins add to signs of balanced-to-tight fundamentals.· Europe’s Group I heavy-grade base oils cargo prices strengthen vs prices in Middle East and Asia in recent weeks..· Firmer prices complicate arbitrage to move surplus supplies to those markets, suggesting Europe’s supply-demand fundamentals remain balanced to tight.· Europe’s Group I heavy-grade price premium to fuel oil holds firm so far in Q4 2025..· Firm margins add to signs of balanced-to-tight fundamentals.· Signs of less workable arbitrage opportunities, firm margins and balanced-to-tight fundamentals in all key markets incentivize refiners to maintain or raise output.· Those dynamics contrast with signs of rising supply in Asia, whose base oils exports climb to 30-month high in Sept 2025..· In Europe, Group I base oils exports fall in Aug 2025 even as output holds firm in markets like Italy..· Base oils exports fall even in face of seasonal slowdown in regional lube consumption and persistently anaemic demand growth throughout Europe..· Lower exports and anaemic lube demand growth contrast with steady base oils output in markets like Italy, triggering rise in stocks. .· In US, domestic demand typically falls in month of November from October amid seasonal slowdown in consumption at year-end..· Slowdown in demand in month of November would coincide with expected restart of major Group II base oils unit after maintenance work.· Firm global base oils margins and less feasible arb opportunities point to tighter fundamentals and incentivize refiners to maintain high output.· Scenario could trigger larger rise in surplus supply in coming months if fundamentals are less tight than prices imply..Asia base oils demand outlook: Week of 27 October.Asia base oils supply outlook: Week of 27 October.Base Oil News stories and analysis also available on ICIS platform
