· Asia’s Group II base oils prices rise versus gasoil prices to highest in more than a month for heavy grades, highest since Q2 2025 for light grades.· Rising base oils margins point to firm supply-demand fundamentals, incentivizing refiners to maintain or raise output.· Incentive to raise output follows rise in base oils exports from Asia’s largest suppliers to thirteen-month high in Sept 2025..· Shipments rise on simultaneous pick-up in exports from South Korea, Taiwan and Singapore.· Rise in supply precedes lighter round of plant-maintenance in Asia over coming months.· Rise in supply coincides with still closed-arbitrage to Americas..· Rise in supply and closed arbitrage to more distant markets suggests regional demand is strong, or that regional demand will need to be strong to absorb the pick-up in volumes.· Increasingly high Group I SN 500 price in Middle East relative to FOB Asia Group I/II prices boosts feasibility of lining up arb shipments to that region..· Signs of recent pick-up in shipments to Middle East could curb its ability to absorb additional volumes even with feasible arbitrage to move more supplies to the region.· South Korea’s base oils exports rise to eleven-month high in Sept 2025..· Rise in exports adds to signs of improving supply in Asia.· Light round of plant-maintenance work in Q4 2025 and start-up of new units in Asia raise prospect of supply continuing to rise.· Rising exports and improving supply help to cover more requirements in Asia and in regular outlets for Asia shipments like India and Middle East.· Rising exports and improving supply could curb requirements for additional volumes from sources like US.· Rising exports and surplus supply could then start to target more distant markets unless prices adjust in a way that complicate such moves or that incentivize run-cuts.· Taiwan’s base oils exports stay at more elevated levels so far in Oct 2025, extending a trend of higher-than-usual volumes throughout most of this year.· Heavy-grade base oils account for larger share of Taiwan’s exports in Sept 2025 and so far in Oct 2025..· Higher heavy-grade share of exports allows Taiwan to tap higher margins for Group II N500 versus lighter grades.· Higher share of heavy-grade exports keeps tighter for longer Asia’s availability of Group II light grades.· Taiwan’s base oils exports to India and southeast Asia account for 60% of its total shipments in Sept 2025 and 54% share of total exports in Jan-Sept 2025..· Rising share of exports bound for India and southeast Asia reduces Taiwan’s reliance on China as major outlet for its supplies.· Rising share of exports bound for India and southeast Asia could get more problematic following recent start-up of new Group II unit in Singapore and imminent start-up of new capacity in India.· Prospect of rising supply in southeast Asia and India could put pressure on shipments from Taiwan to target other markets instead.· Singapore’s base oils supply shows mixed signals, with exports over last four weeks holding relatively firm in narrow range..· Export volumes remain well above recent lows in H2 July 2025, but close to typical levels over past year even after recent start-up of new base oils unit.· Singapore’s base oils imports over last four weeks by contrast extend sharp slowdown..· Any extension of that trend would slow build-up of supplies in southeast Asia.· Any extension of that trend could instead add to supply in the markets where the shipments originated from..S Korea's Sept base oils exports rise.Taiwan Sept base oils exports stay high.Asia base oils supply outlook: Week of 13 October.Asia base oils demand outlook: Week of 20 October.Base Oil News stories and analysis also available on ICIS platform
