· US base oils prices hold firm in narrow range versus vacuum gasoil prices..· Still-firm margins curb pressure on refiners to adjust output.· Moves to maintain steady-to-high output would help to cushion impact of planned plant-maintenance work in coming weeks.· Moves to maintain steady output could also coincide with moves by distributors and blenders to start to trim inventories, adding to supply.· Steady output and moves to cut stocks at end-Q3 2025 would follow signs of faster rise in surplus supplies in US market in early-Q3 2025.· Supplies could face upward pressure after base oils/lube exports fell to twenty-one-month low in July 2025..· Slump in exports removes key counter-weight to weak domestic demand..· Any extension of slowdown in exports would compound upward-pressure on base oils supplies.· Firm US base oils imports in July 2025 compound impact of weak exports.· US base oils imports hold firm as surge in shipments from Canada cushion impact of slump in supplies from Middle East..· Firm imports and slump in exports trigger dip in net exports to lowest since early-2023..· Fall in net exports raises prospect of speeding up build-up of surplus supplies in US market.· Rise in surplus supplies increases pressure to trigger rapid pick-up in exports or adjustment in output to limit size and speed of stock-build.· Any such moves to control size of stock-build would precede typical slowdown in consumption and rise in inventories during final months of the year. · Firm base oils margins curb pressure on refiners to adjust output.· Dynamic suggests exports remain the key tool to limit pace of build-up of surplus supplies..· US base oils imports likely stayed lower in Aug 2025 before rising in Sept 2025 amid resumption of flows from Bahrain and UAE.· Plant-maintenance work in Bahrain and UAE in Q2 2025 cuts supply, triggers slump in US base oils imports from those two markets in three months to July 2025 to lowest in two years..· US Group III base oils prices hold relatively firm vs VGO and Group II prices in Q3 2025..· Firmer price differentials coincide with dip in Group III supplies from Middle East.· Even at firmer levels, US Group III price-differentials remain low.· Low price-differentials, even with slump in supplies from Middle East, suggest US Group III market remains structurally weak..· Latin America’s base oils supply likely to be sufficient to cover requirements, with wave of US shipments expected to reach Brazil and Argentina in Sept 2025.· Shipments would add to supply from domestic refiners.· Pick-up in supply would help to replenish depleted stocks after dip in US exports to Brazil and Argentina in June-July 2025.· Pick-up in supply would also cushion impact of any slowdown in shipments from US in coming weeks because of upcoming plant-maintenance work.· Brazil’s shipment of another cargo to India in Aug 2025 suggests supply is already sufficient even with lower US shipments to the country in June-July 2025..· Europe’s base oils supply shows signs of turning more mixed.· Europe’s premium-grade base oils prices hold firm or extend rise versus VGO, contrasting with weaker margins for Group I base oils.· Firm premium-grade margins incentivize refiners to maintain high output or to move more supplies to Europe.· Europe’s Group II base oils prices stay unusually firm versus Group I prices..· Firm prices point to more balanced supply-demand fundamentals compared with Group I base oils.· More balanced fundamentals would follow extension of steady US base oils exports to Europe at lower levels in early-Q3 2025 vs year-earlier levels..· Lower export volumes to Europe instead compound any build-up of surplus supplies in US.· Europe’s Group II prices move to increasingly wide premium to US prices during Q3 2025, reflecting such a dynamic..· US trade flows could point to preference to maintain firm prices and balanced fundamentals in Europe.· US lube exports to Europe rise to eleven-month high in July 2025 on surge in shipments to Lithuania..· Rise in shipments could reflect moves to partially cushion impact of slump in US shipments to markets like Mexico..· Europe’s Group III base oils prices outperform Group I prices and already-strong Group II light-grade prices.· Premium of Group III 4cSt (high) price over 4cSt (low) price also falls in H1 Sept 2025, staying in narrow range since May 2025..· Price-strength of Group III base oils versus other grades, and price-strength of supplies without full set of OEM approvals, suggest that supply remains tighter than usual.· Tighter supply suggests availability has yet to return to normal following completion of Group III plant-maintenance work in Middle East during Q2 2025..· Europe’s weaker Group I base oils prices point to healthy availability of supply.· Group I supply could get further boost from signs of more regular volumes from Turkey.· Price gap between Turkey’s imports from Russia and from Italy holds steady and wide in July 2025..· Steep price-discount for Russian shipments incentivizes Turkey to maximise procurement of those supplies and to maximise its own exports to Europe.· Another cargo moves from Turkey to Europe in July 2025, after unusually large rise in domestic base oils output in June 2025..· Pick-up in flows to Europe adds to supply at a time when demand faced seasonal slowdown..US’ July base oils exports fall.US’ July base oils imports slip.US July base oil exports to Europe stay low.Americas/EMEA base oils demand outlook: Week of 15 September.Base Oil News stories and analysis also available on ICIS platform
