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The market is moving into its seasonal demand recovery with supply still constrained, leaving South Korea, India and other alternative suppliers to cover more of the shortfall just as maintenance could reduce their ability to do so.
The summer slowdown is giving way to a seasonal demand recovery just as spare supply remains thin, making every major export source more important.
Supply is being redistributed rather than restored. South Korea, India and China have increased their importance as Middle East and other Asian flows weaken, but the shift leaves the market more exposed to disruption at any one of those suppliers.
South Korea has become a key swing supplier across multiple markets. Its exports to Southeast Asia stayed high while shipments to the Americas reached record levels, increasing the pressure on refiners to sustain output and exports.
China has kept output high, but a recovery in domestic demand could keep more of those barrels in the local market.
India is taking a larger role in Group III supply, with new capacity allowing supply to move well beyond its traditional destinations. A seasonal recovery in Indian demand could reduce the volume available for export.
Singapore domestic shipments remain below typical levels, imports have fallen and renewed European cargoes suggest outside supply is still needed.
The slowdown in Saudi Arabian and Taiwanese flows could have a growing impact as the seasonal demand pickup approaches, leaving fewer traditional sources available to Southeast Asia and India.
Group III faces an even sharper squeeze as several of the suppliers that helped replace Middle East barrels begin maintenance, increasing pressure on South Korea to sustain exports to Europe and the Americas.
The next few months will test whether the market has enough flexible supply to absorb both rising demand and planned maintenance.
