· Asia’s heavy-grade base oils price-premium to Singapore gasoil stays unusually high.· Firm base oils premium suggests supply remains tight and demand firm, incentivizing refiners to raise output.· Gap between Group II light and heavy-grade base oils prices widens more even after restart of growing number of base oils units following scheduled maintenance work.· Gap between light and heavy-grade base oils prices had continued to widen in recent months partly because of heavy round of plant maintenance work.· Supply of heavy-grade base oils likely to get boost as plants resume normal operations and complete replenishment of stocks.· Surplus supply could rise fast if demand fundamentals are weaker than what firm price margins suggest.· Improving availability of supply would put pressure on pick-up in shipments to more distant markets to maintain balanced fundamentals.· FOB Asia Group II price discount to domestic Europe prices weakens to widest level in more than six months for heavy grades, holds close to widest level in more than seven months for light grades..· Any such arbitrage shipments from Asia would likely reach Europe during Q3 2025, when demand in that market faces a seasonal slowdown.· Any such shipments to Europe would coincide with likely rise in surplus US supply and attraction of moving more shipments from that market to Europe.· Dynamic highlights complications of managing time-risk between procurement and delivery of shipments to more distant markets..· Taiwan’s base oils exports stay high in May 2025, with heavy-grade volumes higher than usual even as their share of total exports drops to less than 50% of the total.· Singapore’s base oils exports in four weeks to end-May 2025 revert to more typical monthly levels following surge then dip in shipments during Feb-April 2025..· Resumption of more typical export volumes adds to regional supply.· Singapore sees extended pause in delivery of shipments from Saudi Arabia from mid-April 2025 to end-May 2025..· Pause in shipments coincides with plant-maintenance work in Middle East in May 2025.· Pause in shipments follows dip in Asia’s base oils exports to Middle East in March-April 2025.· Saudi Arabia’s base oils shipments extend recovery in April 2025..· Recent pause in delivery of shipments to Singapore could reflect impact of firmer demand in Middle East.· Saudi Arabia’s base oils shipments show signs of slowing in May 2025 from previous month.· Dynamic could extend pause in flows to outlets like Singapore.· Dynamic compounds drop in Singapore’s imports of base oils from key Group I suppliers since H1 April 2025..· Japan’s base oils exports rise in April 2025 for third month from year earlier to second-highest level in 20 months..· Pick-up in exports reflects rise in Japan’s surplus supply, and indirect repercussions of US tariffs.· Rise in exports boosts availability of Group I base oils in Asia, cushioning impact of recent slowdown in Group I shipments to markets like Singapore.· Rise in exports to southeast Asia in April 2025 coincides with recent pick-up in availability of spot volumes from some regional suppliers..· South Korea’s Group II base oils supply for overseas markets likely to be more readily available following initial focus on replenishing depleted stocks after plant-maintenance work.· South Korea’s base oils output stays unusually low in April 2025, reflecting restart of Group II unit late that month following scheduled maintenance work..· Sharp drawdown of stocks during maintenance work likely prompts round of stock-replenishment following restart of base oils unit..· Completion of stock replenishment would then free up more volumes for shipment to overseas markets..· India’s base oils output likely to stay lower in May 2025 after already falling in April 2025 because of plant maintenance work during both months..· Lower output likely a key factor supporting India’s ongoing demand for supplies from overseas markets in April-May 2025.· Extension of some plant-maintenance work through June 2025 could leave output lower for longer, sustaining requirements for additional volumes from overseas markets.· Lower output would coincide with start of monsoon season, when demand usually slows.· Dynamic could curb impact of lower output..· Asia’s imports of premium-grade base oils from Middle East fall in April 2025 from 22-month high in March 2025.· Imports in three months to April 2025 hold at more elevated levels..· Import volumes likely sufficient to cover peak-demand period at end-Q1 2025 and round of stock-replenishment in early-Q2 2025..Japan’s April base oil/lube demand falls.S Korea’s April base oils output rises.India's April base oils supply exceeds demand.Asia base oils supply outlook: Week of 26 May
