Base Oils and Lubricants: Weekly Global Market Review - 11 Sep '26

Base oils are approaching the fourth quarter with less surplus than usual, after the third-quarter slowdown failed to produce the usual supply build.

China and India are putting more pressure on available barrels, with China's Group II balance tightening as India's demand extends its recovery.

That stronger Asian demand is arriving as regional supply faces more constraints, with Taiwan and Saudi Arabia heading into October maintenance and Saudi shipments already running well below usual levels.

Asian supply is also being redirected toward the US, where an unusual wave of Singapore cargoes is adding to flows from South Korea and India.

A slump in US exports in July showed how global supply disruptions forced more barrels into domestic demand, leaving higher exports more dependent on additional supplies from elsewhere.

The additional US-bound flows could help boost supply, allowing the US to increase shipments to markets including Europe.

Group III maintenance across multiple regions is adding to an already tight premium-grade market, limiting the alternatives available to buyers.

Crude oil back above $100/barrel and elevated diesel prices are giving refiners more reason to divert feedstock toward fuel production, a pull that could tighten base oil availability further.

Any additional unplanned production disruption, on top of the maintenance already under way or scheduled, would stretch an already tight market further.