· Global Group I brightstock prices stay unusually high relative to other grades..· Brightstock price-strength helps to cushion impact of lower prices for lighter-grade base oils, supporting firm Group I base oils margins in markets like Europe..· Firm Group I base oil margins incentivize refiners to maintain high output.· Brightstock price-strength follows sustained outperformance of brightstock prices versus other grades since early 2024..· Outperformance of brightstock prices follows closure of key Group I base oils unit in Italy around that time.· Base oils unit in Italy was key supplier of Group I brightstock.· Closure of unit, combined with plant-maintenance in H1 2025, trigger dip in Italy’s base oils output since early 2024..· Brightstock supply-tightness could now start to ease following start-up of new Group II base oils unit in Singapore in Sept 2025.· Base oils unit’s output includes heavy-grade Group II product that can be used as alternative to brightstock.· Singapore’s exports from domestic sources recover in Sept 2025 to highest in at least two months following start-up of new unit..· Exports include first cargo to US in almost two years.· US domestic production of Group II base oils curbs its need for Group II supplies, suggesting Singapore’s exports to US could include the new heavy-grade Group II product.· Current global brightstock price-strength reflects unusually tight supply of brightstock.· Any rise in availability of Group I brightstock or products that can replace Group I brightstock changes the supply fundamentals.· Any change in supply fundamentals could impact brightstock price-strength.· Europe brightstock price-premium to SN 500 averages more than $350/tonne in 2025, up from $150/tonne in 2024..· Asia brightstock price-premium to SN 500 rises even more strongly over longer period.· Factors supporting rise in brightstock price-premium in 2024-2025 suggest that price-premium could face pressure from any easing of supply-tightness.· Size of rise in brightstock price-premium to SN 500 suggests that brightstock price-premium could narrow sharply and still remain well above previous levels.· Any such price-adjustment would also impact brightstock margins.· Any such impact on brightstock margins would reduce their support as counterbalance for weaker margins of lighter-grade base oils.· Extent of any subsequent squeeze on Group I base oils margins could put pressure on refiners to adjust output in response..Global base oils margins outlook: Week of 6 October.Asia base oils supply outlook: Week of 6 October.ExxonMobil starts first-of-its-kind technology in Singapore.Base Oil News stories and analysis also available on ICIS platform
