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Asian base oils exports have reduced the summer surplus in the region, with recovering demand and upcoming maintenance complicating any extension of those shipments to Europe and the Americas
Asia's summer surplus is smaller than usual as open arbitrage kept more barrels moving to the Americas and Europe.
Cargoes that loaded in July and August are now reaching those destinations, partially offsetting tighter US and Middle East supply.
An extension of arbitrage shipments could be harder as regional demand revives, while October maintenance in Saudi Arabia and Taiwan will further reduce regional supply.
Saudi base oils loadings have already slowed markedly even before the scheduled maintenance work.
The slowdown complicates India's ability to secure additional supplies after imports remained unusually low in July even with stronger domestic demand.
Europe's Group III supply fell to a 30-month low in July as Asian shipments retreated, highlighting the importance of those supplies and the impact of any further slowdown.
Any extension of the slowdown to Group II base oils would increase Europe's reliance on supplies from the Netherlands and the US, whose exports to Europe slumped in July.
The tighter-than-usual base oils balance coincides with higher crude and diesel prices, increasing pressure on refiners to prioritise motor fuels.
