Asia base oils supply outlook: Week of 3 November

·         Asia’s base oils prices extend fall vs gasoil prices, with Group II heavy-grade differentials slipping to lowest since start of Q3 2024.

·         Ongoing squeeze on base oils margins increases importance for refiners to maintain balanced-to-tight supplies to boost their leverage to adjust prices accordingly.

·         Weaker margins and importance of balanced supplies boost incentive for refiners to adjust output accordingly.

·         Lack of any such moves, combined with light round of scheduled plant-maintenance, structural rise in supply and seasonal slowdown in demand, could trigger rise in surplus volumes.

·         Any such development would trim further any leverage for refiners to adjust prices to support firmer margins.

·         Signs of steady-to-lower shipments from several key regional sources in recent weeks could point to some such moves to adjust supply.

·         Any such moves would follow signs of pick-up in Asia’s base oils supply in Sept 2025.

·         Any moves to adjust output are more likely to impact light grades than heavy grades in view of still-wide price-gap between the two grades.

·         Any such moves to trim light-grade output could add to signs of already-tighter availability of those supplies in recent months.

·         Singapore’s base oils exports show signs of staying lower in Oct 2025 than in Sept 2025.

·         Exports stay lower over last four weeks even after start-up of new Group II unit in Singapore in Sept 2025.

·         Lower exports could suggest unit has yet to reach full capacity.

·         Taiwan’s base oils shipments extend slowdown in H2 Oct 2025, raising prospect of drop in monthly exports vs recent months.

·         Saudi Arabia’s base oils exports also show signs of staying lower in Oct 2025, ahead of plant-maintenance in Nov-Dec 2025.

·         South Korea’s base oils output falls to three-month low in Sept 2025 even as it stays relatively high.

·         Lower output and higher exports flip South Korea’s recent supply-surplus to shortfall in Sept 2025.

·         Lack of any scheduled plant-maintenance work in South Korea over coming months means refiners would need to rely on same dynamic to keep stocks balanced.

·         Same dynamic would rely on exports staying at more elevated levels, and regional demand holding at levels that were able to absorb those high exports.

·         Demand for base oils shipments from South Korea could get boost from any slowdown in supplies from other key sources.

·         Without any such slowdown, regional buyers could struggle to absorb high exports from South Korea.

·         Weaker demand and recent pressure on base oils margins instead boost incentive for refiners to cut output accordingly.

·         India’s base oils output holds firm in Sept 2025.

·         Output still lags domestic lube demand by largest volume in three months.

·         Dynamic highlights India’s growing reliance on imports to meet shortfall.

·         Dynamic highlights India’s growing importance as outlet for overseas base oils supplies.

·         Dynamic highlights likely widespread impact of any slowdown in India’s import-requirements when start-up of new production capacity narrows the shortfall between output and demand.

·         Asia’s premium-grade base oils imports from Middle East rise to six-month high in Sept 2025.

·         Rise in imports reflects recovery in Group III base oils supply in Middle East after sharp dip in shipments during five months to Aug 2025 because of plant-maintenance.

·         Global Group III base oils prices trend firmer relative to other grades during that period.