The most evident repercussions were on the Roseland community as the blending plant employed about 450 people who were laid off after the accident and the environmental impact of the fire as well. Smitty’s customers were also expected to be affected as the manufacturer supplied large amounts of PCMO, HDMO, transmission fluids, gear oils, greases, hydraulic fluids, industrial oils, antifreeze, specialty fluids, additives and corrosion inhibitors from its Roseland plant, which included blending, storage and packaging facilities, according to the company’s website. Smitty’s also operates plants in Vicksburg, Mississippi; Hammond, Indiana; and Jasper, Texas, and market sources conjectured that these units would potentially increase production to compensate for part of the lost output at Roseland.

Some blenders and lubricant suppliers have already received several inquiries from Smitty’s customers looking for product. While other blenders would likely benefit from capturing part of Smitty’s business, participants admitted that it would be difficult for most manufacturers to match Smitty’s prices, possibly causing an increase in finished products pricing particularly as lubricant supply was expected to tighten due to the extended plant shutdown.

At the same time, market participants doubted that Smitty’s outage would have a significant impact on base oils supply. “It may move demand from one base oil supplier to another, depending on who Smitty’s was buying from,” a source noted, adding that the base oil market was fairly balanced, so the direct effect on pricing was likely to be minimal.

Base oil posted prices remained on a steady course but spot export prices have been under pressure because of competition among suppliers and the need to match buyers’ price expectations. Supply and demand were still the main conditions influencing prices since crude oil and feedstock values have shown few noteworthy fluctuations over the last few weeks. Spot prices have slipped between 2 cents per gallon and 5 cents/gal week on week, depending on the grade, according to sources.

Sentiment in crude oil circles was bearish as OPEC+ was expected to announce another round of production increases, adding more barrels to an already oversupplied market at a time when the U.S. has also reached record high production levels. Analysts also worried about demand at the end of the summer driving season and China’s manufacturing activity showing a contraction for a fifth straight month, suggesting a global economic slowdown.

Uncertainty about U.S. tariffs and their effect on manufacturing operations and lubricant demand lingered. Many of the tariffs that U.S. President Donald Trump has imposed appeared to be in limbo as a federal appeals court last week ruled that most of his so-called reciprocal tariffs against numerous countries were illegal. President Trump on Tuesday said that his administration would seek an immediate hearing from the Supreme Court in hopes of overturning the appeals court’s ruling, Yahoo Finance.com reported.

Group I

Most API Group I grades were described as largely balanced against demand although some pockets of this segment have begun to lengthen. Buyers appeared able to acquire additional volumes as needed as availability has improved compared with previous months. This condition was exerting pressure on prices while competition with Group II grades also weighed on values. Base oil plants were running at full rates, allowing for additional product to come into the market at a time when demand has weakened particularly as the summer driving season has ended.

The heavy grades and bright stock were still tighter than the lighter grades and this allowed them to maintain a firmer price structure although some suppliers have adjusted spot prices down in order to attract export opportunities.

Export activity into Mexico was steady but a few buyers preferred to postpone orders in hopes of achieving more attractive prices when U.S. suppliers release a majority of their extra stocks following the end of the hurricane season. Demand for Group I and Group II light grades has started to show an uptick because of these grades’ use in diesel blending given a tightening of diesel supply in Mexico.

Buying interest for U.S. exports from Brazil was also subdued but was expected to improve once more U.S. spot volumes become available in the coming weeks. The main Brazilian base oil producer has been able to maintain top operating rates and this domestic product together with existing inventories of imported product fulfilled current requirements. Furthermore, there were expectations that domestic prices would be reduced this month, making them more attractive against imports.

Group II

While the Group II segment was exposed to similar conditions as the Group I category in that supplies have started to grow while demand has declined, the downward price pressure was partly mitigated by prospects of reduced availability once the Excel Paralubes plant starts a scheduled turnaround in October. At the same time the more strained supply levels might be offset by additional volumes coming into the market as suppliers release the extra barrels held during the hurricane season along the U.S. Gulf Coast.

Excel Paralubes is planning to shut down its Group II/Group III plant in Louisiana for about one month for maintenance and a catalyst change. The unit has been running at reduced rates for most of the year with some market participants noting that this may have been related to the refiner’s Group III production. Excel Paralubes has started to build inventories to cover contractual commitments during the outage and has restricted spot availability, according to sources. There was no direct producer confirmation forthcoming about the plant’s operations.

For the time being the Group II 100N grade was heard to be plentiful and spot prices for bulk shipments have edged down by a few cents per gallon. Rerefined grades have also become more available because of the restart of a rerefining unit following a maintenance shutdown. The only grade that appeared to be less exposed to the downward pressure was the 220N.

One of the export markets that U.S. Group II suppliers often target is India. Demand in India was anticipated to improve as the monsoon season ends in September and various activities return to more normal levels although business was more muted this week due to religious holidays in India. Additionally, Group II availability in Asia has increased following the completion of plant turnarounds with spot prices coming under pressure as suppliers compete to capture orders.

U.S. suppliers have also been in negotiations with buyers in the West Coast of South America and other South American destinations as well as in Nigeria where some Group I grades have also been under discussion.

Group III

All base oils have been exposed to downward pressure because of growing availability and the Group III grades were no exception although products from a supplier with full approvals continued to carry a premium.

Most plants were running well but within the domestic realm Excel Paralubes has experienced issues with its Group III output since early in the year. The plant will be shut down in October for a turnaround but the impact on domestic supplies was not anticipated to be significant as the unit produces limited volumes for the company’s own internal consumption. Excel Paralubes does not comment on its production status.

Imports from Canada, Asia and the Middle East have become more plentiful after a fairly busy turnaround schedule in the previous months and some transportation and logistics issues in the Middle East back in June, which have been largely resolved. Additional Group III supplies may become briefly available following Smitty’s Supply’s devastating plant explosion and fire last week but the extra supplies may be absorbed quickly by blenders filling the gap left by the affected lubricants manufacturer.

Naphthenics

The most significant development on the naphthenic base oils front might be the start of Ergon’s scheduled turnaround this month. Ergon had started to build inventories ahead of a turnaround at its naphthenic base oils plant, restricting spot supplies. The six-week maintenance program at its refinery in Vicksburg, Mississippi, was expected to begin Sept. 1. Various operating units of the ERI refinery will be down as several reliability improvements will be implemented. No supply interruptions were expected for Ergon’s current ratable customers as product inventory levels were anticipated to be sufficient to support sales during the planned shutdown, company sources said.

Meanwhile, naphthenic base oil prices were reported as stable, supported by an expected narrowing of the supply and demand ratio. The lighter grades have been on the tighter side as demand from downstream applications has been healthy while consumption for the heavy grades from the tire and rubber industry, which serves the automotive segment in particular, has been lackluster. Some additional pale oil volumes might become available due to the extended shutdown of Smitty’s Supply base oil blending plant.

Crude oil prices continued to trade within a narrow range, promoting full operating rates and steady base oil output. Producers said that they were keeping an eye on crude oil values but would only consider price adjustments if crude oil and feedstock prices were to increase or decrease significantly and the ensuing values were maintained over an extended period.

Crude Oil

Crude oil futures were slightly down on Wednesday morning but remained close to a four-week high, supported by U.S. sanctions and ongoing supply concerns after Ukrainian drone attacks shut a significant portion of Russia’s refining capacity with weekly shipments from Russian ports falling to a four-week low. President Zelenskyy has also vowed more strikes. Additionally, industry data showed U.S. crude inventories decreased by nearly 1 million barrels last week though the drop was smaller than the expected 1.7 million barrels.

Oil prices were also affected by weaker U.S. economic data, highlighted by manufacturing contracting for a sixth consecutive month amid tariffs. Analysts did not expect a large change in crude output levels following the Sept. 7 OPEC+ meeting.

West Texas Intermediate October 2025 futures settled on the Nymex at $65.59 per barrel on Sept. 2, up from $63.25/bbl on Aug. 26.

Brent futures for November 2025 delivery on ICE: $67.91/bbl on Sept. 2, up from $67.01/bbl on Aug. 26.

Louisiana Light Sweet crude wholesale spot prices were hovering at $66.33/bbl on Aug. 29, down from $66.93/bbl on Aug. 25, according to the U.S. Energy Information Administration. (There was no trading on Sept. 1 due to the U.S. Labor Day holiday.)

Diesel

Low-sulfur diesel wholesale, Aug. 29 (Aug. 25), EIA
New York Harbor: $2.32 per gallon ($2.40/gal)
Gulf Coast: $2.20/gal ($2.27/gal)
Los Angeles: $2.42/gal ($2.45/gal)

Gabriela Wheeler can be reached directly at gabriela@LubesnGreases.co

Lubes’n’Greases shall not be liable for commercial decisions based on the contents of this report.

Posted Paraffinic Base Oil Prices Sept. 3, 2025

(Prices are FOB basis, in U.S. dollars per gallon and U.S. dollars per metric ton).

Archived base oil price reports can be found through this link: https://www.lubesngreases.com/category/base-stocks/other/base-oil-pricing-report/

Historic and current base oil pricing data are available for purchase in Excel format.

*ExxonMobil prices obtained indirectly.
**Rerefiner