· US Group II base oils prices stay in unusually narrow range versus vacuum gasoil feedstock prices throughout most of this year..· US Group II base oils domestic price-premium to export prices similarly stays in relatively narrow range so far this year..· US Group II heavy-grade price-discount to prices in markets like India similarly holds in relatively narrow range throughout most of this year..· Steady US price-spreads contrast with more volatile margins and price-differentials in recent years..· Steady US price-differentials point to unusually prolonged period of balanced supply-demand fundamentals.· Domestic and overseas demand is sufficiently strong to absorb US' higher base oils output in June-July 2025, leaving stocks tight in first seven months of the year..· Steady domestic base oils margins partly reflect support from steady domestic-export price-spread. · Steady domestic-export price-spread partly reflects support from steady US price-discount to prices in markets like India.· US Group II heavy-grade price-discount to CFR India price benefits from higher outright India cargo price amid tight supply in Asia in H1 2025 especially.· High CFR India price curbs pressure on US export price to fall any further, while tight supply in Asia boosts demand for US shipments.· India’s imports from US duly rise by 40% in first nine months of 2025 from previous year..· Steadier US export price and regular removal of surplus supplies from domestic market curb downward pressure on US domestic price.· US posted prices typically fall around this time of year in response to weaker demand and rising surplus supply..· Lack of any widespread round of posted price cuts so far in Sept-Oct 2025 suggests that US supply-demand fundamentals remain relatively balanced.· Balanced fundamentals partly reflect tighter-than-usual supply in Asia in H1 2025 and persistently strong demand in Mexico, balancing out weak domestic demand.· Those supportive factors are now set to change.· Asia’s supply begins to recover during Q3 2025 following completion of most plant-maintenance work..· Supply set to get further boost from start-up of new base oils unit in Singapore in Sept 2025 and in India in late-2025.· Mexico’s demand could face at least short-term impact from recent introduction of stricter rules on imports into the country.· Mexico’s base oils imports consistently far exceed country’s domestic lube demand..· Any narrowing of gap between imports and domestic lube consumption would impact demand for US base oils.· Unusually steady US base oils price-differentials through most of this year partly reflect balanced-to-tight fundamentals, especially compared with recent years.· Change in US supply-demand fundamentals could in turn prompt reversion of US price-differentials to trends similar to the ones they faced in recent years..Global base oils margins outlook: Week of 20 October.Asia base oils demand outlook: Week of 20 October.Asia base oils supply outlook: Week of 20 October.Base Oil News stories and analysis also available on ICIS platform
