At the same time, there were concerns about an economic slowdown and reduced oil demand as U.S. President Donald Trump reignited the trade war. The president threatened to impose harsh tariffs in hopes of coercing several countries into signing trade agreements before an Aug. 1 deadline.

Group I

Buyers of API Group I grades appeared more open to securing cargoes at slightly higher prices as the segment remained tight globally. With permanent plant closures in recent years and ongoing turnarounds in various regions, availability was strained, particularly that of bright stock, a difficult cut to replace.

Southeast Asia was an important source of Group I grades but supplies from Thailand were limited. One Thai producer’s availability was constrained by domestic requirements and a turnaround earlier in the year, while a second producer started a scheduled turnaround this month expected to last until mid-August. The producer suspended offers ahead of the shutdown to build inventories. Recent and ongoing turnarounds in Japan and the Middle East also tightened regional Group I supply.

Some availability originated in Indonesia, where a supplier closed two tenders for Group I flexitank cargoes in recent weeks, including for bright stock and light grades. According to sources, the tender for the SN130 cargo that closed July 7 was awarded to a buyer in Southeast Asia within the reported FOB Asia price range.

In China, a slower manufacturing pace and reduced export volumes due to the trade war with the U.S. – its largest trade partner, according to the World Bank – curbed base oil demand from industrial and marine sectors. China was expected to release key economic indicators this week, starting with June trade data Monday and second-quarter gross domestic product Tuesday. Trade data was expected to reflect a further decline in U.S.-bound shipments after June’s bilateral talks resulted in a 55% levy on Chinese imports, Nikkei Asia reported. However, annual export growth may still show a slight uptick as more Chinese firms diverted goods to ASEAN and other regions.

China faced an ongoing deficit of heavy-viscosity base oil grades. Domestic production was typically insufficient, and Group I imports were expected to continue. An expansion at PetroChina’s Fushun plant, and later ExxonMobil’s launch of a Group II heavy-viscosity grade in Singapore, were expected to expand Group I availability in Asia.

Domestic suppliers in China lowered prices to compete with foreign products and abundant Group II grades, dampening interest in additional Group I imports. Bright stock spot offers climbed to $1,300 per metric ton-$1,400/t CFR, with some small cargoes offered even above these levels, though they attracted limited buying interest.

In India, limited import availability – particularly from the Middle East – drove prices up moderately. CFR India prices edged up by about $5/t week on week, as demand remained subdued due to heavy rains and disruptions to industrial, heavy-duty and agricultural activities. Weather patterns in India were said to be slowly transforming due to climate change, with more erratic rainfall, including both droughts and floods.

Domestic Indian suppliers had ample inventories to meet some of the current demand, and there was a resurgence in offers from U.S. and European cargoes as the arbitrage remained workable, although volumes from those sources were still thin.

Group II

Spot prices for Group II light grades faced upward pressure amid tight supply, even as a South Korean supplier and the sole Taiwanese producer resumed spot offers after previously suspending them.

Turnarounds and reduced output strained availability, particularly for the 150N cut, pushing prices up. This week, ex-tank Singapore prices for the light grade were revised higher as buyers accepted steeper offers to secure cargoes.

A South Korean refiner returned to the market with new offers for 150N after suspending them the prior week. Another South Korean producer no longer required 150N cargoes to be lifted in conjunction with 500N barrels. Reports surfaced of a South Korean bulk offer of 150N at $710/t FOB and 500N at $945/t FOB the previous week, though it was unclear whether deals were concluded.

In China, domestic supplies were offered at competitive prices, reducing interest in imports. Group II capacity has steadily grown, outpacing demand, with some plants operating at reduced rates to avoid oversupply. Many buyers met requirements with local product as producers discounted prices to foster demand.

In India, Group II import prices were stable. Domestic suppliers maintained offer levels due to firm feedstock costs and steady demand, even amid slower automotive activity during the monsoon. This tempered buyer willingness to accept higher prices. With better margins for heavy grades, refiners favored their production, resulting in greater availability, while tightness in light grades lifted spot price expectations.

Group III

Group III supply and demand remained balanced to tight, with 8 centiStoke prices under upward pressure this week due to limited availability from a South Korean supplier. The 4 cSt and 6 cSt grades were also not abundant amid healthy demand from Europe and the U.S., drawing Asian cargoes to those destinations. Supplies were expected to lengthen as plants completed turnarounds.

In China, Group III prices were steady, and competition between domestic producers and importers eased with fewer imported cargoes arriving. Downstream lubricant demand remained lackluster, attracting fewer Group III shipments, though term volumes remained stable, largely met by Middle Eastern cargoes.

In India, Group III supplies were limited as fewer suppliers shipped to Indian ports due to slow demand and more attractive margins elsewhere. The monsoon season also dampened activity in automotive and transportation sectors. However, buyers in need of cargoes appeared willing to accept higher offers, with CFR India prices for the 4 cSt and 6 cSt grades edging up by $5/t during the week.

Shipping

Several inquiries emerged, with a 1,000-ton cargo quoted for shipment from Onsan, South Korea to Huizhou, China in late August. A 2,000-ton lot reportedly shipped from Cilacap, Indonesia to Nantong, China in the first week of July. A 2,500-ton cargo was mentioned for shipment from Cilacap to Chittagong, Bangladesh in mid-July. Around 1,000 tons were quoted for shipment from Onsan to Bangkok, Thailand in early August. A 1,500-ton lot was considered for shipment from Yeosu, South Korea to Taichung, Taiwan in the first half of August. Last week, a 3,000-5,000-ton cargo was mentioned for shipment from Mailiao, Taiwan to Hamriyah, United Arab Emirates in late July.

Production

The global base oil supply and demand balance eased as several turnarounds concluded and plants restarted, although ongoing shutdowns at a few units and permanent closures in recent years continued to limit supply in some base oil segments.

In the Group I category, Thai Lube Base Oil PLC shut down a Group I lube base oil unit in Sriracha, Thailand for 45 days from mid-July to late August.

IRPC completed a turnaround at its Group I plant in Thailand in May, which constrained spot availability in the country. The producer reportedly built inventories to cover term commitments during the outage and limited spot sales afterward.

In Japan, tight Group I conditions persisted following the extended shutdown of an Idemitsu Group I unit in Chiba after a fire at the lubricating oil production facility in mid-2024. The plant reportedly restarted at the end of the year. It was scheduled for turnaround from May through July. A Cosmo Oil unit in Yokkaichi underwent extended maintenance starting in September 2024 and completed work at the end of the year.

Eneos completed maintenance at its Kainan and Mizushima plants in 2024. The Kainan plant shut down from May through June. The Mizushima B plant shut down in February for extended maintenance and reportedly restarted in May. The Mizushima A unit was scheduled for a one-month turnaround beginning in October. These outages followed the permanent closure of two Eneos Group I plants over the past three years.

Recent turnarounds at other units tightened spot availability earlier in the year, and the effects lingered.

Indian refiner Hindustan Petroleum Corp. Ltd. restarted its Group I unit in late April or early May after a partial turnaround that began in late February. HPCL reportedly completed a 45-day turnaround at its Group II trains in May, though this was not confirmed by the producer.

Chennai Petroleum Corp. Ltd. carried out a scheduled one-week turnaround at its Group I plant in Chennai in April.

In China, PetroChina’s Dalian Petrochemical refinery in Liaoning province, which included a Group I plant, began a permanent shutdown process in 2023. The base oils unit shut down in late 2024, and the refinery closure was scheduled for completion in June or July 2025 for relocation. The company planned to clear all product inventories by the end of August, according to reports.

At the same time, China National Petroleum Corporation/PetroChina’s Fushun plant in Liaoning was expected to produce additional Group I base oils to offset the Dalian closure, according to market sources. Fushun did not confirm the Group I volume, but earlier estimates placed the bright stock expansion at 60,000 metric tons per year. Unconfirmed reports suggested that Fushun started producing additional Group I in late April or early May.

Sinopec completed a two-month turnaround at its Gaoqiao Group I and Group II plant that began in March.

Pertamina’s Group I plant in Cilacap, Indonesia underwent maintenance from mid-January to late February or early March, limiting export availability in the first quarter.

In the Group II segment, several planned turnarounds and an unplanned run cut also reduced supply of certain grades.

South Korean producer GS Caltex restarted operations in May after a 45-day turnaround at its Group II/Group III unit in Yeosu that began in late February. The producer reportedly built inventories for term customers during the outage, but spot availability remained limited.

In South Korea, Hyundai Oilbank Shell Base Oil cut operating rates at its Group II plant in Daesan in March due to a refinery outage that restricted feedstock supply. The producer reportedly increased rates in late May.

In China, an unplanned outage at the CNOOC Group II unit in Huizhou affected domestic availability in the second quarter.

Sinopec reportedly completed a two-month turnaround at its Gaoqiao Group I and Group II plant in May and shut down its Jinan Group II unit for one month in April.

In India, Bharat Petroleum Corp. Ltd. completed maintenance work at its Group II facilities in Mumbai in March. The work began in late February.

HPCL was also expected to have conducted a 45-day turnaround at its Group II trains in May, though the company did not confirm the reports.

In the Middle East, Luberef reportedly shut down its Group I and Group II units in Yanbu, Saudi Arabia for a two-week maintenance and catalyst change in the second quarter. Spot sales were limited before and after the work.

In the U.S., Chevron restarted its Group II plant in Pascagoula, Mississippi in late May following a four-week turnaround and catalyst change. The company did not confirm the work, but spot export supplies were limited.

Motiva restarted its Port Arthur, Texas plant in June and began building inventories after a three-week turnaround on its hydrocracker that began in late May.

In the Group III segment, SK Enmove completed a partial turnaround at its Ulsan, South Korea Group III plant in late June. The turnaround began in early May. Supplies of Group II were not significantly affected as the plant continued producing on other trains, according to company sources.

In the Middle East, Adnoc shut down its Group II/Group III plant in Ruwais, Abu Dhabi for two to three weeks in early May and reportedly restarted operations.

Bapco reportedly started a two-month turnaround and catalyst change at its Group III facilities in Sitra, Bahrain in May, though details were not confirmed.

Prices

Crude oil futures rose Monday, even after OPEC+ announced a steep production increase, as global and U.S. inventories showed signs of tightness. However, conditions were expected to ease later in the year as supply increased and seasonal demand faded.

On July 14, Brent September 2025 futures traded at $71.06 per barrel on the London-based ICE Futures Europe exchange, up from $67.54/bbl on July 7.

Dubai front-month crude oil (Platts) financial futures for August 2025 settled at $69.45/bbl on the CME on July 11, compared with $67.67/bbl on July 3. (There was no trading on July 4 due to the Independence Day holiday in the U.S.)

Base oil spot prices remained stable to firm, with tighter supply of some grades supporting higher discussions. The price ranges below reflected bids, offers, deals and published benchmarks.

Ex-tank Singapore prices were steady to firm. Group I solvent neutral 150 rose $10 to $810/t-$850/t, with SN500 up $10 to $1,070/t-$1,110/t. Bright stock remained firm at $1,380/t-$1,420/t, all ex-tank Singapore.

Group II 150 neutral held at $850 to $890, and 500N was steady at $1,100/t-$1,140/t, ex-tank Singapore, after last week’s gains.

On an FOB Asia basis, Group I SN150 stayed at $680/t-$720/t, and SN500 held at $920/t-$960/t. Bright stock remained firm at $1,260/t-$1,300/t FOB Asia.

Group II 150N hovered at $690/t-$730/t FOB Asia, and 500N remained steady at $940/t-$980/t.

In the Group III segment, the 4 cSt grade held at $1,120/t-$1,160/t, 6 cSt was reported at $1,100/t-$1,140/t and 8 cSt remained firm at $970/t-$1,010/t, all FOB Asia.

Gabriela Wheeler can be reached at gabriela@LubesnGreases.com

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