· Asia’s base oils prices extend steep fall vs gasoil prices.
· Weaker outright prices compound the drop.
· Sliding price-differentials, combined with increasingly firm diesel premium to crude oil, increase pressure on refiners to adjust output in response.
· Any drop in surplus base oils supply would give refiners more leverage to resist downward price-pressure and instead adjust prices higher.
· Any drop in surplus supply would also cushion impact of still-limited arbitrage opportunities to more distant markets.
· Likely pick-up in surplus supplies from US in coming weeks would complicate further any such arbitrage opportunities.
· US Group II heavy-grade price-discount to CFR India cargo price widens in early-Nov 2025 to widest level in more than a month, reflecting that dynamic.
· Asia’s recent export flows point to mixed signals over supply outlook.
· Singapore’s base oils shipment volumes stay lower than usual in recent weeks, with four-week exports to early-November dipping to lowest level since H1-Feb 2025.
· Exports slide despite recent start-up of new unit in Singapore at end-Q3 2025.
· Lower exports suggest new unit has yet to reach full-production capacity.
· Singapore takes delivery in past week of large cargo of Russian origin.
· Shipment is first in more than a month, extends trend of regular shipments from Russia throughout this year.
· Singapore’s base oils imports from Saudi Arabia extend pause since start of Oct 2025.
· Pause in shipments contrasts with regular flows throughout the year.
· Pause in shipments coincides with signs of slowdown in Saudi Arabia’s base oils exports in Oct 2025 and precedes plant-maintenance work from mid-Nov 2025.
· Taiwan’s base oils exports slow sharply in H2 Oct 2025 before rebounding in early-Nov 2025.
· Wave of shipments amounting to more than 22,000 tonnes load from Taiwan since start of Nov 2025.
· More mixed export flows from key suppliers in recent weeks follow surge in Asia’s base oils exports to thirteen-month high in Sept 2025 .
· Rise in shipments boosts buyers’ stocks, cushioning impact of any slowdown in exports in recent weeks.
· China’s base oils output could rise in Nov 2025, after production dips to three-month low in Oct 2025.
· Output could rise this month following completion of some plant-maintenance work.
· Lower output in Oct 2025 coincides with rise in domestic Group II light-grade price differentials vs diesel and FOB Asia cargo prices.
· Those firm price-differentials could face pressure from likely rise in output in Nov 2025, combined with seasonal slowdown in demand.
· Japan’s base oils output rebounds to five-month high in Sept 2025.
· Higher output, weak domestic demand and low exports point to build-up of Group I base oils stocks in Japan.
· Recovery in output and build-up in stocks coincides with pick-up in Group I base oils supply from other sources in Asia and from other regions.
· Recovery in output and build-up in stocks raises prospect of pick-up in exports in Q4 2025, adding to rise in Asia’s surplus Group I base oils supply.
· Build-up in supplies curbs refiners’ leverage to target higher prices in response to squeezed margins.
· Dynamic instead incentivizes refiners to cut output.
