Crude oil futures appeared to be in a holding pattern and were anticipated to be weighed down by increased supply from OPEC+ members against weakening demand given prospects of a global economic slowdown. At the same time, there could be potentially more international sanctions imposed on Russian oil exports, which could affect the oil trade.

Despite weaker fundamentals in some segments, most suppliers agreed that base oil demand was at projected levels, perhaps because buyers and sellers had already adjusted down their expectations as the last few months of the year are typically less vibrant. The need to clear the extra inventories that were built ahead of the hurricane season tends to weigh on prices as well.

A number of lubricant manufacturers have received additional orders due to the shutdown of Smitty’s Supply Inc.’s large blending plant in Roseland, Louisiana, following a massive fire and explosion on Aug. 22. The producer has been trying to fill some of its commitments through production at its other manufacturing locations. Participants noted that lubricant and grease pricing received support from tighter conditions as Smitty’s plant produced significant amounts of lubricants and greases, which were now mostly out of play. There were also expectations that the outage might exert upward pressure on values as most suppliers were unable to match Smitty’s prices.

In terms of base oil posted prices, values were unchanged from the previous week and there have not been any official adjustments since May, but spot export prices for some grades remain under pressure because of growing availabilities and competitive moves among suppliers. 

Group I
Prices in the API Group I segment were largely stable, receiving support from a balanced-to-tight supply situation. The heavy viscosity grades have started to see some lengthening, with bright stock in particular expected to be affected by the grease production shutdown at Smitty’s blending plant and lackluster demand from export destinations in Latin America.

Plant turnarounds have been completed for the most part, and refiners were heard to be running units at close to full rates, resulting in more abundant supplies. This situation drove some suppliers to seek export opportunities to destinations in Europe, Latin America and India. Demand in Europe had been anticipated to improve once the summer holidays were over in late August, but activity has not picked up the pace as expected.

U.S. suppliers continued to fulfill steady requirements for Group I and Group II base oils from Mexico, although there have been some disruptions related to import permits, which are taking longer than expected to renew in some cases. The import licenses need to be obtained from the Ministry of Energy through the Mexican Foreign Trade Digital Window. The application must prove the import’s necessity for production, the goods’ intended use, and compliance with the Import Decree, whose aim is to prevent illegal fuel blending and tax evasion. Some buyers in Mexico have delayed orders as they expected prices in the U.S. to come under pressure in the last quarter as suppliers do their best to finish the year with lean inventories.

With some consumers having used up most of their inventories and local production not deemed ample enough to meet all requirements, it was not surprising to see a pickup in buying interest from Brazil. However, whether numbers would work remained a question, as buyers expected lower prices, given that U.S. suppliers were expected to clear inventories, and the main Brazilian base oil producer has reduced domestic prices this month to compete with imports. U.S. suppliers appeared open to discussions for Group II grades at more moderate price levels than in August.

Group II
A seasonal slowdown in demand, together with the gradual release of some of the extra stocks kept during hurricane season has led to a lengthening of the Group II 600N grade, exerting downward pressure on domestic spot prices. Range-bound crude oil and feedstock values also contributed to the bearish sentiment. Spot export numbers for the Group II 600N cut have slipped by a few cents per gallon week on week given plentiful availability, but prices for the 100N and 220N cuts were slightly higher given tightening supplies. Rerefined volumes have been more limited too given healthy offtake last month.

For the time being, however, participants expected the domestic Group II segment to remain fairly balanced rather than oversupplied given export movements and the fact that Excel Paralubes has been running its Group II/Group III plant at reduced rates for most of the year and the producer was preparing to shut down its plant for a maintenance program and catalyst change. The Excel Paralubes unit in Lake Charles, Louisiana, was expected to be offline for approximately four to six weeks, starting in October. Excel Paralubes has begun 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.

U.S. suppliers were pursuing export opportunities to place their extra volumes and they have targeted markets on the West Coast of South America, Mexico, Brazil and India. At least one large Group II parcel which included heavy grades was heard to have been concluded into India, and about 7,000 metric tons were shipped from Texas to Rio de Janeiro, Brazil, this month. Some buyers were holding back on purchases in hopes of achieving more competitive prices in the coming weeks, once more U.S. barrels hit the spot market.

Group III
Group III prices remained steady, supported by a fairly balanced supply and demand ratio. Market participants said that prices had been under pressure earlier in the year because of competitive pricing from a Middle Eastern supplier, but values had largely stabilized after April and had received support from concerns about potential supply disruptions in the Middle East in June when the U.S. bombed nuclear facilities in Iran, opening up the possibility of a widespread regional conflict. However, the confrontation was short-lived and any logistical and transportation issues that derived from it were quickly resolved.

Prices had also been propped up by tight supplies due to turnarounds or reduced operating rates at several facilities and logistical issues with some of the import shipments. However, all the facilities have been restarted and were running well, and several cargoes were anticipated to arrive in the U.S. from Asia and the Middle East this month and the next. A Middle East product supplier was heard to have discharged a cargo last week, and more imports were slated to arrive in October. The growing availability was expected to exert downward pressure on spot price ideas.

The 4 cSt grade was still reported as tight, with one supplier having placed this cut on allocation in the previous weeks, while the 6 cSt and 8 cSt were more abundant. Spot prices for the 8 cSt grade reportedly slipped by 4 to 5 cents per gallon compared to the previous week on plentiful supplies.

The impact on the domestic market of Excel Paralubes’ Group II/Group III shutdown was not anticipated to be significant as the unit produces limited Group III volumes for the company’s own internal consumption. Excel Paralubes does not comment on its production status.

Naphthenics
On the naphthenic base oils front, prices were described as steady, supported by a generally balanced-to-tight supply and demand scenario. This was partly the result of healthy demand for the light grades from the transformer oil segment, along with a turnaround at Ergon’s naphthenics plant in Vicksburg, Mississippi. At the same time, the heavier grades were more abundant because of sluggish demand from the rubber and tire segment and reduced requirements for grease production linked to the shutdown of Smitty’s plant in Vicksburg following an explosion and fire in August.

Ergon embarked on a 45-day maintenance program at its refinery on Sept. 1. The company announced that various operating units of the refinery would be down as several reliability improvements will be implemented. Ergon’s current ratable customers were not expected to see any supply disruptions because the producer built sufficient inventories ahead of the shutdown to support contract requirements, but the company was likely to restrict spot sales.

Given a lack of destabilizing price fluctuations on the crude oil market and August oil prices having fallen from July, naphthenic producers preferred to maintain base oil prices within current ranges, with few discussions about price revisions taking place.

Crude Oil
Crude oil futures eased in early trading on Wednesday on weaker spot demand, but prices were supported by potential supply cuts as Russian refineries and ports have been hit by Ukrainian drones and there were calls for additional sanctions on Russian oil exports. Traders were also awaiting the U.S. Federal Reserve’s meeting on Wednesday with expectations of an interest rate cut. 

West Texas Intermediate October 2025 futures settled on the Nymex at $64.52 per barrel on Sept. 16, up from $62.63/bbl on Sep. 9.
Brent futures for Nov. 2025 delivery were trading on the ICE at $68.02/bbl on Sep. 16, up from $66.99/bbl on Sept. 9.
Louisiana Light Sweet crude wholesale spot prices hovered at $65.66/bbl on Sep. 15, up from $64.80/bbl on Sept. 8, according to the U.S. Energy Information Administration

Diesel
Low-sulfur diesel wholesale, Sept. 15 (Sept. 8), EIA
New York Harbor: $2.38 per gallon ($2.37/gal)
Gulf Coast: $2.27/gal ($2.25/gal)
Los Angeles: $2.53/gal ($2.58/gal)

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

LNG Publishing Co. Inc./Lubes’n’Greases shall not be liable for commercial decisions based on the contents of this report.

Posted Paraffinic Base Oil Prices Sept. 17, 2025

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

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