· US light-grade base oils domestic prices weaken versus feedstock/competing fuel prices; export price-differentials hold firmer.· Diverging trends reflect weaker outright prices for domestic supplies and firmer prices for export volumes.· Premium of Group II domestic light-grade base oils prices over export prices falls in response to narrowest level in more than two months..· Lower domestic price points to muted domestic demand.· Higher export price suggests supply is at level that curbs pressure on refiners to clear surplus volumes.· More muted pressure from surplus supply precedes maintenance-work on key Group II base oils unit in US at start of Q4 2025.· Plant-maintenance work could cushion impact of weak demand and any moves to cut stocks that were built to cover for weather-related supply disruptions.· More muted pressure from surplus supply would coincide with narrowing light-grade base oil export-price premium to heating oil and with firm diesel premium to crude.· Narrowing base oil export-price premium to heating oil could support firmer buying interest in overseas markets like Mexico.· Firm diesel premium to crude oil could simultaneously incentivize refiners to produce more of the motor fuel instead of surplus light-grade base oils.· Higher US light-grade export prices coincide with signs of rise in Group II base oils supply in Asia-Pacific market.· Rising supply in Asia-Pacific incentivizes region's refiners to boost their share of demand in key markets in the region.· Higher US export prices facilitate such a strategy. .· Rise in Asia’s supply could halt or slow rebound in US shipments to that region over past year and especially in recent months.· Singapore’s base oils imports from US surge in Sept 2025 as wave of shipments arrive..· Any slowdown in those flows would leave more US supply targeting other outlets instead..· Latin America’s base oils supply could be more mixed.· Some markets show signs of tighter supply, curbing buyers’ flexibility to hold back if they deem prices to be too high.· Supply could still be sufficient following pick-up in US flows reaching key markets in Sept 2025.· Expectations that US prices are likely to trend lower rather than higher in Q4 2025 could add to buyers' comfort with maintaining lower stocks. · Prospect of rise in supply in Asia in Q4 2025 gives buyers additional incentive to hold back.· Argentina’s base oils output rebounds in Aug 2025 after unusual dip in July 2025..· Recovery in output, pick-up in imports and pause in exports lift Argentina’s supply in Aug 2025 to second-highest level in a year..· Rise in supply helps to boost stocks at a time when domestic demand continues to weaken.· Rise in supply, higher stocks, weaker demand and currency volatility boost incentive to hold off seeking additional shipments from overseas markets.· Rise in supply could instead trigger resumption of base oils shipments to other markets.· Cargo of Group I base oils duly set to load from Argentina in early-Oct 2025..· Rising feedstock/diesel prices could impact Europe Group I base oils supply more than premium-grade base oils.· Firm Group I heavy-grade prices previously cushioned weakness of light-grade prices.· Recent fall in heavy-grade prices erode that support, adding to pressure on margins..· Support from firm Group I base oils export prices could also face pressure in face of rising surplus supplies from other regions.· FOB Europe Group I brightstock price-premium to US prices stays unusually wide in Sept 2025..· Wide price-premium incentivizes overseas buyers to target Group I supplies from US rather than Europe.· Recent pick-up in Group I flows from US to West Africa points to such a trend.· Recent start-up of new base oils unit in Singapore set to add further to overseas buyers’ supply options.· Any pressure on Europe Group I export prices, combined with already-weaker domestic prices, could incentivize refiners to consider adjusting output levels.· Europe’s Group II/Group III base oils prices continue to hold firmer vs feedstock prices.· Firmer price-differentials point to more balanced-to-tight fundamentals.· Firmer price differentials sustain incentive to produce in Europe or to move to Europe more premium-grade supplies.· Europe’s firm Group II margins contrast with more squeezed premium-grade margins in US and Asia..· Squeezed margins could incentivize refiners in those regions to trim output in response.· Any such change in output in those markets could curb availability of shipments for Europe, keeping supply tighter..Argentina August base oils supply rises.ExxonMobil ships Group II base stocks from new Singapore units.Americas/EMEA base oils demand outlook: Week of 29 September.Global base oils arb outlook: Week of 29 September.Global base oils margins outlook: Week of 29 September.Base Oil News stories and analysis also available on ICIS platform
