Participants that actively participate in import and export business said that they were keeping an eye on the proposed fees that the Trump administration plans to impose on Chinese owned and manufactured ships as of Oct. 14. Back in April, the U.S. government revealed plans to impose port fees on Chinese ships to revitalize shipbuilding in America and reduce China’s dominance of the industry. Chinese ship-owners and operators would be charged $50 per metric ton of cargo, with the fees increasing each year for the next three years with other port fees also expected to be required. The proposed fees have prompted ship operators to shuffle their vessel lineups and move vessels built in China off U.S. routes.

Market observers were concerned that the measures would further disrupt global trade following President Trump’s imposition of sweeping tariffs on imports from a majority of countries. While the tariffs themselves may not have had a direct impact on base oils because most energy products have been exempt of the steep tariffs, freight rates have already gone up because there has been a decrease in goods moving to the U.S. due to the tariffs with fewer ships covering transatlantic routes as a result. This has tightened vessel space and pushed freight rates up, according to sources. “Freight rates from Asia to the U.S. and Latin America have increased a lot indeed,” a source emphasized.

The full impact of the steeper U.S. tariffs is yet to be seen, but economists said that the effects are starting to be felt by American consumers, who are spending less and worry more about the job market. The punitive tariffs are also causing slower economic growth in the U.S. and major economies and have discouraged investment and trade. The health of a country’s economy is key to the lubricants and base oils industry; lubricant demand growth typically tracks GDP growth rates, particularly in manufacturing-intensive economies.

Base oil posted prices were reported as stable, but spot prices for some grades have weakened because of rising availability and competition among suppliers.

Group I
While most base oils were exposed to downward pressure due to softer market fundamentals, the API Group I segment appeared to be partly bucking the trend because some grades were still fairly tight and there were few extra cargoes offered for spot export business. Extra bright stock barrels in particular had been hard to find, but the grease production shutdown at Smitty’s Supply’s blending plant, which was destroyed by an explosion and fire in late August, has freed up some volumes, according to sources.

Suppliers were eyeing export opportunities to destinations in Europe, Latin America and India given slowing domestic demand. Demand from Europe has been disappointing because activity has not been as robust as expected following the end of the summer holidays.

Fairly steady buying inquiries have emerged for Group I and Group II base oils from Mexico but disruptions related to import permits and some logistical issues with railcar transportation have thwarted business. At the same time, some buyers were in possession of enough inventories to keep operations running and this afforded them the chance to wait for more U.S. product to come into the market in the coming weeks.

A similar situation applied to buyers in Brazil, who were trying to rely on domestic production and existing inventories for as long as possible in order to take advantage of additional U.S. offers in the last quarter of the year. Additionally, the main Brazilian base oil producer has reduced domestic prices this month to entice buyers and discourage consumers from buying imports. Some buyers were purchasing Group II grades at competitive prices to replace Group I cuts.

Group II
Following the end of the summer driving season, Group II base oil supply started to lengthen, and this was compounded by producers releasing the extra inventories built ahead of the hurricane season, exerting downward pressure on domestic prices. However, the light-viscosity grades were less abundant than the heavy cuts and prices were holding.

\U.S. suppliers continued to pursue export opportunities and have adjusted spot prices down with their sights set on South America, Mexico, Brazil and India. But some destinations were more difficult to work than others as buyers seemed unwilling to meet current offer levels. They preferred to wait in hopes of seeing competitive prices in the coming weeks as more supplies were likely to be freed up, although buying interest for the Group II light grades for diesel blending has picked up in Mexico. At the same time, the start of Excel Paralubes’ turnaround in October may strain U.S. availability.

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 in October. The Excel Paralubes unit in Lake Charles, Louisiana, was expected to be offline for approximately four to six weeks. 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 about the plant’s operations.

In Brazil, limited domestic availability of the Group I mid- and heavy-viscosity grades led buyers to seek Group II imports, which were competitively priced.

Discussions for additional U.S. cargoes moving to India were ongoing after a number of transactions were reported in the previous weeks for late September and October lifting. Producers appeared more open to adjusting prices of the heavy grades down, especially since competition from South Korean supply has intensified. South Korean producers were favoring the production of the heavy grades versus the light grades at their refineries, but Asian demand has declined and the supply overhang of the heavy grades has grown.

Group III
Sellers expressed growing concern about the fact that the U.S. has become the target of several Middle Eastern and Asian cargoes and availability has grown, placing downward pressure on pricing. With most Group III facilities having restarted following routine maintenance programs and demand in Europe and Asia remaining lackluster, several shipments were anticipated to move to the U.S. Suppliers were heard to be vying to protect or gain market share and have adjusted spot prices down. Prices for the 4 cSt grade were holding steady, but values for 6 cSt and 8 cSt have started to lose support as supplies were more plentiful.

With demand in most countries in Asia having declined, particularly in China, where fairly recent Group III capacity expansions have taken place, Asian and Middle East suppliers were trying to place product in India and in the U.S., where prices were more attractive than in other regions.

At the same time, higher freight rates were making the conclusion of business difficult. The reduced number of vessels covering the usual routes because of a decrease in import volumes of many products and the prospects of fewer Chinese-manufactured or Chinese-operated vessels being able to cover U.S. routes has pushed freight rates up.

In the U.S., Excel Paralubes was anticipated to shut down its Group II and Group III plant in Lake Charles for maintenance in October. However, the impact of the turnaround on the domestic market was expected to be limited as the unit produces Group III volumes for the company’s own internal consumption. Excel Paralubes does not comment on its production status.

At the same time, several U.S. producers were now manufacturing Group III grades, and even though most of these volumes were for internal use, it meant that demand from these producers in the merchant market has fallen.

Naphthenics
Prices for naphthenic base oils were steady, propped up by range-bound crude oil prices and a balanced-to-tight supply and demand scenario. A turnaround at Ergon’s naphthenic base oils plant in Vicksburg, Mississippi, was expected to tighten spot supplies, although reduced requirements for grease production linked to the shutdown of Smitty’s plant in Vicksburg following an explosion and fire in August freed up some barrels. These were expected to be absorbed by production at other sites.

Ergon started 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 suffer 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.

A second naphthenic refiner was heard to be running at top rates, but a large part of its production was slated for export business. Domestic pale oil production was deemed sufficient to meet the current call for product, particularly as consumption of the heavy grades was still lagging.

Crude Oil
Crude oil futures edged up on Wednesday as an industry report showed U.S. crude inventories had declined last week. The possibility that the European Union might impose fresh sanctions on Russian energy exports also pushed prices up.
West Texas Intermediate November 2025 futures settled on the Nymex at $63.41 per barrel on Sept. 23, down from $64.52/bbl for front-month futures on Sept. 16.
Brent futures for Nov. 2025 delivery were trading on the ICE at $68.34/bbl on Sept. 24, up from $68.02/bbl on Sept. 17.
Louisiana Light Sweet crude wholesale spot prices were hovering at $65.19/bbl on Sept. 22, down from $65.66/bbl on Sept. 15, according to the U.S. Energy Information Administration

Diesel
Low-sulfur diesel wholesale, Sep. 22 (Sep. 15), EIA
New York Harbor: $2.35 per gallon ($2.38/gal)
Gulf Coast: $2.24/gal ($2.27/gal)
Los Angeles: $2.44/gal ($2.53/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 September 17, 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