· Europe’s Group II base oils prices maintain steep premium to FOB US and FOB Asia export prices..· Europe’s Group II base oils prices also maintain steep premium to US domestic prices..· Europe’s steep Group II base oils price-premium to other regions boosts attraction of moving more shipments to the region.· US base oils exports to Europe instead hold in narrow range throughout most of 2025..· US shipments to Europe hold in narrow range even as total US base oils/lube exports slump to twenty-one-month low in July 2025..· Steady US flows to Europe curb size or speed of build-up of premium-grade supplies in Europe during Q3 2025.· Slump in total US exports instead raises prospect of faster build-up of supplies in US domestic market.· More balanced premium-grade base oils supply in Europe limits any downward pressure on prices in that market..· Steadier prices in Europe, and already-open arbitrage from US to Europe, curb downward pressure on US prices even with any build-up of surplus supplies.· Steadier prices in Europe, and already-open arbitrage from Asia to Europe, curb downward pressure on Asia’s Group II export prices during Q3 2025, when surplus supply typically rises.· Rare cargo of Group II base oils moves from Taiwan to Europe in Aug 2025, removing some such surplus supplies from Asia..· More muted downward pressure on Asia’s base oils export prices supports more rangebound prices in markets like India and Middle East.· More rangebound prices support steadier demand.· More rangebound prices in India and Middle East also coincide with already-open arbitrage from US to those markets..· More rangebound prices in India and Middle East, and open arbitrage from US, again curbs downward pressure on US prices.· Dynamic suggests that US prices face less downward pressure from steady exports to Europe and firm prices in Europe even if a repercussion is rise in surplus supplies in US domestic market.· US’ steady base oils exports to Europe in July 2025, combined with slump in its total exports, support that scenario..Global base oils margins outlook: Week of 22 September.US’ July base oils exports fall.US July base oil exports to Europe stay low
