· Group II heavy-grade base oils premium to light grades is almost the same in US, Europe and Asia markets at same time and for first time in more than five years..· Similar price-spreads in all those markets contrast with diverging fundamentals driving those similar price-spreads, especially in Europe.· Similar price-spreads in US vs other markets follow sustained weakness of US heavy-grade prices because of persistent surplus supply.· US Group II heavy-grade price also weakens relative to other grades and other regions.· US Group II heavy-grade price flips from May 2025 to increasingly wide discount to US Group I heavy-neutrals prices..· More competitive Group II price incentivizes domestic buyers to use more Group II base oils instead of Group I..· US Group II heavy-grade export price maintains steep discount to prices in key outlets like India and Middle East since early this year..· Competitive price incentivizes overseas buyers to procure more US Group II base oils instead of supplies from other regions..· Similar Group II light-heavy-grade price-spreads in Asia vs other regions follow recent weakening of Asia heavy-grade prices.· Heavy-grade prices fall amid easing supply-tightness and slowdown in demand.· Asia Group II heavy-grade price also weakens relative to other grades and other regions.· Asia Group II heavy-grade price-premium to Asia Group I heavy neutrals falls in July 2025 to lowest level in a year..· Competitive price incentivizes regional buyers to use more Group II base oils instead of Group I..· Asia Group II heavy-grade price discount to prices in Europe continues to grow in July 2025 to widest level since early-Q4 2024..· Competitive price incentivizes buyers in Europe to procure more Group II base oils from Asia.· Weaker heavy-grade premium to light grades in US and Asia also reflects firm prices and tighter supply-demand fundamentals for light grades in both markets..· Europe is the outlier.· Similar Group II light-heavy-grade price-spreads in Europe vs other regions follow recent strengthening of Europe heavy-grade prices.· Europe Group II heavy-grade prices also strengthen relative to other grades and other regions.· Europe Group II heavy-grade price-premium to domestic Group I SN 500 widens in July 2025 to highest level in more than two years..· Wider premium incentives regional buyers to use more Group I heavy neutrals instead of Group II..· Europe Group II heavy-grade price premium to prices in US and Asia widens further in July 2025..· Wider premium incentivizes regional buyers to procure more Group II base oils from overseas markets.· Similar price-spreads between Group II light and heavy-grade base oils in US, Europe and Asia could reflect Europe catching up with persistently-higher heavy-grade price-strength in those other markets.· Either way, weaker heavy-grade price differentials in US and Asia create multiple avenues for sellers to clear surplus volumes.· Firmer heavy-grade price differentials in Europe complicate any such moves if and when the region has surplus volumes to clear. .Global base oils margins outlook: Week of 4 August.Asia base oils supply outlook: Week of 4 August.Base Oil News stories and analyses also available on the ICIS platform
