Global base oils arb outlook: Week of 25 August

·         Europe Group I brightstock price stays unusually firm relative to light and heavy neutrals so far in Q3 2025.

·         Europe Group I brightstock price stays unusually firm versus feedstock vacuum gasoil price so far in Q3 2025.

·         Europe Group I export brightstock price maintains steep premium to imported cargo prices in markets like India.

·         Europe Group I domestic brightstock price maintains steep premium to US export prices.

·         Europe’s high brightstock price differentials suggest the heavy-grade product’s supply-demand fundamentals remain as strong in Q3 2025 as they were in H1 2025.

·         Europe’s high brightstock price differentials stay high in Q3 2025 even after completion of Group I plant-maintenance in Europe during H1 2025.

·         Completion of maintenance-work raises prospect of rise in Group I supplies.

·         Italy’s Group I base oils output extends recovery at end-Q2 2025, reflecting that dynamic.

·         US moves unusually large volume of brightstock to India at end-Q2 2025, with shipments arriving in July 2025.

·         Shipment from US to India takes advantage of increasingly wide gap between US and CFR India brightstock prices.

·         US shipment moves to India rather than to Europe, despite Europe’s even steeper price-premium to US brightstock prices.

·         Argentina moves unusually large shipment of Group I base oils to Nigeria at end-June 2025, with shipment arriving in July 2025.

·         Shipment moves to West Africa despite steep premium of Europe Group I base oils prices versus other markets.

·         Shipment of Group I base oils supplies from Americas to other markets rather than to Europe in recent months points to regional supply that is now sufficient cover requirements.

·         Dynamic frees up more brightstock supplies from overseas markets to target other regions rather than Europe.

·         Rise in shipments to other regions raises prospect of easing sustained tightness of global brightstock supply.

·         Easing supply-tightness raises prospect of magnifying impact of any additional brightstock supply in global market in coming months.

·         Unusually firm brightstock price-differentials incentivize refiners to continue to maximise output even as fundamentals show signs of changing.