On April 2, Trump issued an Executive Order to implement a blanket 10% tariff on goods imported into the U.S. from all nations, with varying duties of up to 50% on imports from specific trading partners, depending on whether they have significant trade deficits with the U.S. Energy commodities and their direct derivatives appeared to be largely exempt from the tariffs. The 10% baseline duties went into effect on April 5, while country-specific tariffs have been paused for 90 days for nations that appeared willing to cooperate and enter further negotiations. China is the exception.

The trade war with China seemed to be the most contentious element in Trump’s plans. The president hiked the tariffs on Chinese goods to 125%, raising them effectively to 145% after levies imposed earlier this year. Chinese President Xi Jinping hit back, hoisting duties on U.S. goods entering China to 125%.

The Trump administration has also proposed actions against Chinese shipping services because an investigation by the Office of the U.S. Trade Representative found that China “unfairly dominates global maritime, logistics and shipbuilding.” Back in February, the USTR suggested charging up to $1.5 million for Chinese-built vessels entering U.S. ports to discourage the use of Chinese ships, Reuters reported. If shipping companies have more limited options on which vessels to use for their transportation needs, freight costs are likely to increase.

Meanwhile, pricing in the three main base oil segments reacted differently to current market conditions. Prices in the API Group I segment remained firm because of a global tight supply and demand ratio, which has been a constant theme for several months. While a couple of Southeast Asian plants have resumed production following reduced operating rates and turnarounds, most producers were focusing on meeting domestic contractual demand and had fewer barrels to offer for spot business. This was particularly the case in Japan, where maintenance programs and permanent plant closures have significantly reduced Group I availability.

Group II prices had also been on an upward trend in Asia for most of the first quarter given dwindling supplies on the back of plant turnarounds and steady demand, but prices for the light-viscosity grade seemed to have come under pressure due to reduced consumption from the automotive industry, lengthening supplies and lower crude oil and feedstock prices.

The Group III grades seemed to be enjoying a fairly well-grounded setting, with snug supplies and a more limited number of sources offering support to current price ideas.

Demand for certain Group I grades appeared to be steady in China, with buying interest for the heavy-viscosity cuts and bright stock remaining a highlight in terms of buying interest from the industrial, marine, heavy-duty and agricultural segments. While Chinese buyers had been willing to adjust bids up to secure available spot cargoes from Southeast Asia, their appetite has been suppressed by offers that were considered too steep against a background of uncertain downstream demand. There was also hope that increased bright stock capacity at a Chinese plant might help satiate some of this appetite at more competitive prices.

There were reports that an Indonesian producer would be offering Group I grades for April shipment through a tender during the previous week, but results were not forthcoming by the publishing deadline. In recent months, tenders from this supplier had elicited keen interest, but it was not clear whether the cargoes would be fetching higher levels than current prices given market uncertainties.

Group II demand in China has weakened, particularly as the country continues to expand its vehicle fleet electrification and the current trade war with the U.S. threw a huge shadow on economic prospects and lubricant consumption. Importers have reduced prices in order to move inventory and are facing competition with local producers, particularly since domestic Group II capacity has grown substantially in China in recent years.

Similar conditions were evident in the Group III segment in China, where expanding local production competed with imports. Local suppliers offered attractive prices to maintain or gain market share, while availability of South Korean and Middle Eastern products was considered plentiful.

In India, spot buying activity has almost ground to a halt given ongoing uncertainties. Buyers preferred to consume existing stocks and limit purchases to contractual volumes to avoid the risk of securing spot volumes, which may lose value in the coming weeks.

Group I grades were still tight and turnarounds at local plants have strained supplies further, helping buoy prices, but Group II availability was deemed ample and prices have come under pressure due to more muted interest and falling feedstock prices. Import prices for the lighter Group II grades have slipped by about $20 per metric ton on a CFR India basis, according to sources. The heavier grades were holding their ground given reduced regional supply as a number of plants were either completing maintenance or building stocks for upcoming turnarounds.

India typically imports large volumes of Group II grades from the U.S., but snug supplies at origin because of plant turnarounds and the risk of tariffs on U.S. imports if India retaliates for levies imposed on Indian exports have thwarted discussions. There was also concern that freight costs might escalate given current trade tensions.

Supply of Group III grades was fairly balanced against subdued buying interest in India. Curbed availability from South Korea and the prospect of reduced supplies from the Middle East given an imminent turnaround offset the generally lackluster demand for these grades. Moreover, more profitable opportunities in the U.S. and Europe were encouraging suppliers to move cargoes to those regions.

In shipping circles, a 2,400-metric ton parcel was discussed for shipment from Malaysia to West Coast India this month. About 30,000 tons were being considered for shipment from South Korea to West Coast India in April as well. Between 5,000 and 8,000 tons were on the table for lifting in Ulsan, South Korea, to Mumbai in late April. A second shipment was also mentioned for shipment from Pyongtaek or Ulsan to Mumbai in May.

Production

The global base oil supply and demand balance has become more strained as a string of permanent plant closures, unplanned outages and maintenance programs have reduced availability, and upcoming turnarounds may reduce supplies further.

In India, Hindustan Petroleum Corp. Ltd. was expected to have started a partial Group I and Group II turnaround in late Feb. that may last until the end of March/early April.

Also in India, Chennai Petroleum Corp. Ltd. scheduled a one-week turnaround at its Group I plant in Chennai in April.

In China, PetroChina’s Dalian Petrochemical Group I plant in Liaoning province shut down permanently in late 2024 due to the expected closure of the associated refinery in mid 2025 for its relocation. At the same time, there had been expectations that China National Petroleum Corporation/PetroChina’s Fushun plant, also located in Liaoning, would be producing additional Group I base oils that would likely help offset the Dalian closure, market sources said. Fushun has not yet confirmed the Group I volume it will bring online, but earlier estimates had put the Group I bright stock expansion at 60,000 metric tons per year. There were expectations that Fushun would be ready to start producing additional Group I in April.

Also in China, Sinopec was understood to have scheduled a two-month turnaround at its Gaoqiao Group I and Group II plant that started in March.

In Japan, tight Group I conditions persisted after the extended shutdown of a Group I unit in Chiba following a fire at the lubricating oil production facility in mid 2024, but the plant was heard to have been restarted. This plant has been scheduled for a turnaround from May until July. A Cosmo Oil unit in Yokkaichi, Japan, underwent an extended maintenance program which began in September 2024 and was completed at end of the year. Eneos also plans to complete maintenance at its Kainan and Mizushima plants this year. The Mizushima B plant was expected to be shut down in February for an extended turnaround that will last until May. All of these shutdowns come on the heels of the permanent closure of two Eneos Group I plants over the last three years.

Another outage that was expected to have some impact on Group I supplies was the ten-day turnaround at the IRPC Group I plant in Thailand in May. While the producer was expected to build inventories ahead of the outage to meet term obligations, it was likely to prioritize domestic commitments and reduce volumes offered for spot business.

Further down the road, it was heard that Thai Lube Base Oil PLC may be shutting down a Group I lube base oil production unit from mid July until late August.

Recently, the Pertamina Group I plant in Cilacap, Indonesia, underwent maintenance work from mid January until late February/early March, according to reports. This had constrained the volumes available for export from the facility, but the plant was heard to have been restarted and additional cargoes were expected to be offered into the spot market.

Within the Group II segment, a number of planned turnarounds and an unplanned run cut may also result in tight supply of certain grades.

South Korean producer GS Caltex was heard to have started a forty-five day turnaround at its Group II/Group III plant in Yeosu in late Feb. and had built inventories to cover term commitments during the outage, but spot supplies remained limited. The plant was anticipated to complete the maintenance program in April.

Also in South Korea, Hyundai Oilbank Shell Base Oil had significantly reduced operating rates at its base oil plant since early March due to a refinery outage which had limited the plant’s feedstock supply. Rates were heard to have been increased, with the plant now running at around 80% capacity.

In China, an unplanned outage at the CNOOC Group II unit in Huizhou may be impacting availability in the domestic market.

As mentioned above, Sinopec was understood to have scheduled a two-month turnaround at its Gaoqiao Group I and Group II plant starting this month.

Sinopec was also expected to shut down its Jinan unit for one month in April.

In India, it was heard that Bharat Petroleum Corp. Ltd. (BPCL) completed maintenance work at its Group II facilities in Mumbai in March. The maintenance program started in late Feb.

In the Middle East, Luberef will be shutting down its Group I and Group II units in Yanbu, Saudi Arabia, for maintenance at the end of the first quarter or beginning of the second quarter and was expected to limit spot sales to build inventories ahead of the shutdown.

In the U.S., Chevron was expected to shut down its Group II plant in Pascagoula, Mississippi, in April for a three to four-week turnaround and has built inventories to cover requirements during the outage, possibly causing some tightening of Group II spot supplies. There was no direct confirmation about the turnaround from the producer.

In the Group III segment, SK Enmove will be completing a partial turnaround at its Ulsan, South Korea, Group III plant for two months, starting in May, but the shutdown was not expected to have a significant impact on supplies because of uninterrupted production on the facility’s other trains, company sources said.

In the Middle East, Bapco was heard to have scheduled a 45-day turnaround at its Group III facilities in Sitra, Bahrain, starting in late March/early April, but details could not be confirmed.

Prices

After plummeting to their lowest level since 2021 last week, crude oil futures inched up on Monday as the U.S. announced some exemptions to tariffs on tech goods from China, and data showed a rebound in Chinese crude imports in March. However, gains were capped by fears about a potential global recession if most of Trump’s tariffs are implemented.

On April 14, Brent June 2025 futures traded at $65.73 per barrel on the London-based ICE Futures Europe exchange, from close to $63/bbl on April 7 and $74.01/bbl on March 31.

Dubai front month crude oil (Platts) financial futures for May 2025 settled at $65.28/bbl n the CME on April 11, compared to $66.48 on April 4 and $74/bbl for April futures on March 28.

Spot base oil prices were generally steady to firm, depending on supply and demand fundamentals. The price ranges portrayed below reflect discussions, bids and offers, as well as deals and published prices widely regarded as benchmarks for the region.

Ex-tank Singapore prices were generally steady. Group I solvent neutral 150 grade was assessed at $790/t-830/t, SN500 held at $1,040/t-1,080/t and bright stock prices were hovering at $1,370/t-1,410/t, all ex-tank Singapore.

Prices for Group II 150 neutral were heard at $840/t-880/t and 500N at $1,080/t-1,120/t, ex-tank Singapore.

On an FOB Asia basis, Group I SN150 hovered at $660/t-700/t, SN500 was assessed at $910/t-950/t and bright stock prices were firm at $1,230/t-1,270/t, FOB Asia on tight supplies.

Group II 150N slipped by $20/t to $700/t-740/t FOB Asia on subdued buying interest and lengthening supplies, while 500N held at $970/t-1,010/t FOB Asia.

In the Group III segment, the 4 cSt grade was steady at $1,060/t-1,100/t, 6 cSt was unchanged at $1,070/t-1,110/t and 8 cSt was assessed at $950/t-990/t, all FOB Asia.

Gabriela Wheeler can be reached directly at gabriela@LubesnGreases.com.
Lubes’n’Greases shall not be liable for commercial decisions based on the contents of this report.