· US base oils prices remain in narrow range vs feedstock prices..· Steady margins sustain incentive for refiners to maintain or raise output at time of year when demand typically starts to slow.· Persistently-steady margins and increasingly squeezed stocks in first seven months of 2025 suggest fundamentals remain balanced even with incentive to maintain higher output.· Lack of any further posted-price adjustments so far in Oct 2025 add to signs that supply remains at manageable levels.· Plant-maintenance in Oct 2025, and wave of shipments to markets like India and West Africa in recent weeks, could extend that trend well into Q4 2025.· Closed arbitrage from Asia to Americas also curbs flow of additional supplies from that market this year..· Closed arbitrage from Asia to US coincides with open arbitrage from US to markets like Europe and India, reflecting tighter supply in those markets this year..· Dynamic helps to maintain relative supply-balance and steady margins in US this year.· Prospect of easing supply-tightness in Asia in coming months, and completion of US plant-maintenance work, could change that dynamic.· US Group III base oils supply could get boost in Oct 2025 from expected arrival of several large shipments from South Korea and Middle East during the month..· Any slowdown in demand in logistically-closer outlets like Mexico could leave US with more surplus volumes to clear.· Mexico’s base oils imports remain elevated in Aug 2025 and well above country’s lube consumption..· High shipment volumes could slip amid recent tightening of rules on imports.· Rise in US domestic demand curbs impact of slump in US base oils exports to Mexico in July 2025.· Any extended slowdown in Mexico’s imports would require US demand to stay at more elevated levels or force US suppliers to move more surplus volumes to other markets instead..· Europe’s firmer premium-grade base oils margins contrast with lower Group I margins.· Trend points to more surplus supplies of Group I base oils, and tight-to-balanced supplies of premium-grade base oils.· Europe’s base oils supply dynamics at start of Q3 2025 reflect that trend..· Europe’s Group I base oils supply extends rise in July 2025 from previous month, contrasting with lower Group II supplies and steady Group III supplies.· Europe’s total base oils surplus supply, or output and imports combined less consumption and exports, narrows in July 2025 at a time of year when it usually rises..· Smaller surplus points to tighter-than-usual regional supply ahead of seasonal slowdown in demand later in Q3 2025.· Tighter-than-usual supply reflects premium-grade base oils more than Group I base oils.· Extension of strength of premium-grade margins into Q4 2025, and weakness of Group I margins, points to continuation of that dynamic.· Europe’s smaller base oils supply surplus at start of Q3 2025 adds to tighter global surplus in July 2025..· Surplus tightens as global supply extends fall from year-earlier levels, while demand rises..· Global supply likely to recover later in H2 2025 following completion of heavy round of plant-maintenance and start-up of new production capacity.· Dynamic would require global demand to extend its rise beyond July 2025 to prevent global surplus rising again..Global base oils supply stays lower in July.UK’s July base oils output falls.Netherlands’ July base oils supply falls.Base Oil News stories and analysis also available on ICIS platform
