In 2018, Indias base oil imports from Korea dropped from a 50 percent market share to 45 percent, and Taiwan and Singapore each lost 1 percent of market share. Although imports from the United Arab Emirates also lost 5 percent to a 13 percent share, Indias 2019 data shows this trend [of increasing base oils from Middle East] continuing. In January to August this year, Middle East-origin base oils accounted for 25 percent of the top 10 [locations of origin] of imports into India. Middle East import volume was second only to South Korean material, he added.

Chinas imports from January to August 2019 showed a similar trend. South Korea and Singapore were the main sources of base oils imports, and the Middle East-origin base oils accounted for 8 percent of the top 10 [origins of imports into China], partly due to the trade war, he said. Supply from the United Arab Emirates accounted for 3 percent and Qatar 5 percent of the volume from the top 10 origins.

The Middle East has become a major player for Group III and Group III+, he added. The region has more than 2 million metric tons of Group III and Group III+ production capacity and more than 500,000 tons of Group II capacity.

This is affecting Asias major base oil suppliers. Koreas Group II and Group III exports to U.A.E. fell on new Middle Eastern capacities, he said. Although the U.S. sanctions on Iran had some impact, base oil exports from Iran have been declining. In 2018, the country exported 392,188 metric tons, down from almost 450,000 tons in 2017.