· Asia’s base oils prices slip versus gasoil prices amid recent rise in crude oil prices.· Heavy-grade base oils margins stay relatively firm even with recent downward pressure.· Recent squeeze on margins could prompt refiners to resist price-adjustments to reflect any change in supply-demand fundamentals.· Firm diesel price-premium to crude oil magnifies impact of squeeze on base oil margins, adding to refiners’ resistance to price-adjustments, especially for light grades..· Still-firm heavy-grade margins suggest supply-demand fundamentals stay relatively tight despite completion of most plant-maintenance work.· Firm margins incentivize refiners to maintain higher output levels.· Closed arbitrage to Americas and narrower gap between FOB Asia and domestic China prices add to signs of still-tight regional supply..· Any ongoing supply-tightness could start to ease following recent start-up of new Group II unit in Singapore..· Dip in Singapore’s base oils exports from domestic sources in July-Aug 2025 could reflect impact of initial start-up of new unit.· Rise in Singapore’s base oils exports from domestic sources in recent weeks coincides with start-up of new unit..· Prospect of further rise in Singapore’s base oils supply coincides with still-firm margins.· Dynamic could point to dip in supply from other sources.· Supply from key regional producers instead shows signs of rising rather than falling.· Rise in supply from growing number of sources raises prospect of increase in surplus volumes and rise in competition for key outlets in Asia-Pacific region.· Less feasible arbitrage to overseas markets could slow down removal of any surplus volumes, adding to regional surplus. .· South Korea’s base oils output rises to three-year high in Aug 2025..· Rise in output outpaces domestic/overseas demand, triggering rise in surplus supplies..· Pick-up in surplus supplies likely delays rather than avoids impact of rise in output on wider Asia-Pacific market.· Pick-up in surplus supplies raises prospect of subsequent rise in exports to avoid large stock-build.· Taiwan’s base oils export volumes stay high in Sept 2025 even with some weather-related cargo-loading delays.· High shipment volumes throughout 2025 contrasted with and partially cushioned impact of more volatile flows from other key suppliers so far this year.· High volumes now add to rise in shipments from other suppliers..· China’s Group II base oils supply extends rise in Aug 2025, contrasting with shrinking supply of Group I and Group III base oils..· Rising Group II supply boosts its share of China’s total paraffinic supply to highest level in more than three years..· China’s still-growing Group II base oils market could boost incentive for overseas refiners to increase shipments of those supplies to the country.· China’s large Group II production capacity could deter such moves.· China’s shrinking Group III base oils market could curb incentive for overseas refiners to boost shipments of those supplies to the country.· Slump in China’s Group III base oils production this year, and imports’ still-large share of total Group III supply, could instead boost feasibility of such moves..· India’s supply of Group II light-grade base oils could improve as firmer margins in Asia during most of Q3 2025 incentivize refiners to boost output of the product.· Availability could get further boost from signs of improved domestic supply, combined with rising production in southeast Asia.· Any pick-up in supply would follow tighter availability in Aug 2025 after slump in India's imports of Group II light grades that month..· Imports fall mostly because of drop in shipments from South Korea.· Rise in shipments from other sources like US in Aug 2025 include more Group II mid-viscosity and heavy-grade base oils, but no light grades..· Saudi Arabia’s base oils exports likely to fall in Q4 2025 because of major plant-maintenance work.· Fall in shipments would follow rebound in exports in Aug 2025 and signs of steady flows in Sept 2025..· Prospect of rise in supply in Asia in coming months, and persistent flow of surplus volumes from US, could cushion impact of likely drop in shipments from Saudi Arabia.· Market then faces prospect of further rise in supply in early 2026 following completion of plant-maintenance in Saudi Arabia..ExxonMobil starts first-of-its-kind technology in Singapore.India’s August light-grade base oils imports fall.China’s August base oils demand rises.Saudi Arabia’s August Yanbu/Jeddah base oils exports rise.Asia base oils demand outlook: Week of 29 September.Asia base oils supply outlook: Week of 22 September
