Concerns about a global economic slowdown not only impacted stock markets, but also crude oil and feedstock prices. Oil prices continued to be weighed by the possibility of increased supply from OPEC+ member countries in July against potentially shrinking demand, along with rising crude inventories in the U.S.

Group I

The API Group I segment continued to display signs of snug availability, given a structural deficit of Group I production in many countries and ongoing demand from the industrial and transportation segments, particularly for the heavy-viscosity grades and bright stock.

Recent and ongoing Group I plant turnarounds in Southeast Asia, Japan and the Middle East have resulted in reduced availability in the region and have driven prices up over the last several months. Some of the countries that produce Group I grades were also prioritizing domestic requirements and this curtailed spot supplies for export. A number of buyers opted for using Group II base oils in lieu of Group I cuts whenever formulations allowed as Group II supplies were starting to lengthen and prices for the Group II light grade were deemed competitive.

Chinese buyers had shown keen interest in Southeast Asian Group I cargoes in the previous months, but buying appetite has weakened on lower demand from industrial applications. China’s manufacturing activity fell more than expected to a 16-month low in April, sliding into contractionary territory as the escalating trade war with the U.S. hurt bilateral trade, CNBC.com reported. Despite the temporary reduction of tariffs on Chinese goods, the added levies affected U.S. consumers more than they did previously. Trump also imposed 10% tariffs on virtually all countries and increased levies on many Chinese imports by 30 percentage points, on top of 25% duties that remained from his first term.

Marine applications were also heard to have been impacted by supply chain disruptions and a reduction in export volumes of many Chinese products affected by the U.S. tariffs, despite a temporary reduction in the original duty levels that had been announced. The tariffs were affecting exports from other Asian nations as well and this led to reduced demand for vessel space and bunker fuel. Fewer vessels were said to be covering the usual trade routes and this has dampened demand for marine fuels and lubricants, according to sources.

Chinese importers and suppliers have reduced their price expectations to encourage orders and lower existing stocks, and they have also shown weaker interest in fresh cargoes as uncertainties over future demand prevailed.

In India, buyers were trying to pad inventories ahead of the start of the monsoon season in June, when transportation and manufacturing activities can be disrupted by heavy rainfall and flooding. However, since prices for foreign Group I cargoes had been on an upward trend in recent weeks, many buyers had turned away from imports and preferred to look for locally produced material. But domestic product had also been fairly tight, given plant turnarounds at Indian refineries, and Iranian material, which is sometimes available in India, was also expected to be largely absent due to a turnaround at an Iranian plant.

A lack of spot supplies of most grades had largely supported Group I prices in the previous weeks, particularly for bright stock, but buyers have started to resist the higher offers. Prices have begun to fray because more spot cargoes have emerged from Southeast Asia, and many buyers deemed term shipments sufficient to meet requirements.

Group II

Group II spot prices were mixed, with some grades seeing decreases given growing availability, and others stabilizing given that June volumes have been exhausted. With a number of plants having been restarted, or on the brink of resuming production, there were expectations of increased avails in the region, which placed downward pressure on prices. Furthermore, falling crude oil and feedstock values also contributed to the decline.

In China, most plants were running well and availability was ample to meet requirements, despite recent plant turnarounds at local units. Chinese consumers sought supplies from local base oils plants, as well as from Singapore and South Korea, but there was more interest for the light grades versus the heavier viscosities.

Some Group II base oils continue to be shipped to China from Taiwan, but the reimposition of duties on Taiwanese products last year has led to a reduction in spot volumes. Formosa Petrochemical—the sole Group II producer in Taiwan— continues to regularly ship base oils to China under contract.

South Korean producer GS Caltex restarted operations at the end of April, following a turnaround, and additional spot volumes have become available for June shipment.

The increased availability of Group II cuts in South Korea had started to exert pressure on offers, as competition among suppliers was expected to grow, although a second South Korean producer was heard to be running at reduced rates due to feedstock supply issues, which may pare down spot supplies, although there was no confirmation about current run rates.

Indian buyers have also turned to domestic production to meet current requirements and to help build inventories ahead of the monsoon season, which typically runs from June until September, but could also extend beyond this period in some areas. Additional Group II offers were expected to emerge from South Korea and the U.S. in the coming weeks, exerting pressure on current indications.

Shipments from the U.S. to India had declined because of several turnarounds in that country accompanied by steep pricing. However, a large U.S. producer has resumed production and also lowered its domestic posted prices on the back of softer crude oil values and growing availability. Once the producer is able to rebuild stocks, and a second U.S. supplier resumes production, more U.S. cargoes were expected to become available for export.

Group III

A tighter global supply and demand scenario for Group III grades has pushed indications up, but prospects of reduced demand as the peak season for lubricant production winds down in a few countries was expected to stall the upward momentum.

Buying interest for the Group III 4 cSt and 6 cSt was more robust than for the 8 cSt cut, but all prices moved up in tandem given reduced avails stemming from plant turnarounds in Asia and the Middle East. Additionally, Asian buyers were forced to compete with their European counterparts as they vyed for available volumes during the peak lubricant demand season in that region.

In China, demand for most base oils has softened and interest in Group III imports has therefore suffered as well. Chinese consumers preferred to make-do with domestic supplies whenever possible as prices were more competitive and there were fewer logistical complexities.

Group III demand in India was largely steady, but not robust, while a tighter global supply and demand scenario due to plant turnarounds pressured import prices up on a CFR India basis. South Korean spot availability was more limited because of maintenance at one plant, and a second supplier not offering much extra product.

Shipping

There were fewer reports of inquiries this week, likely because of a general slowdown in product shipments in the region and on transatlantic routes. As mentioned last week, between 20,000 metric tons and 30,000 tons were under discussion to cover Yeosu, South Korea, to Mumbai, India, and/or United Arab Emirates in the first half of June. A 4,000-ton cargo was also on the table for shipment from Onsan, South Korea, to Yanbu, Saudi Arabia, in mid-June.

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 the Group I segment, Indian refiner Hindustan Petroleum Corp. Ltd. was expected to restart its Group I unit in late April/early May after a partial turnaround that started in late Feb. HPCL was also heard to be planning a 45-day turnaround at its Group II trains in May, but this was not confirmed by the producer directly.

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

In China, PetroChina’s Dalian Petrochemical Group I plant in Liaoning province was 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 late 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. The plant was expected to be restarted this month.

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 in Japan this year. The Kainan plant will be shut down in May until June. The Mizushima B plant was expected to be shut down in Feb. for an extended turnaround that would last until May. Later in the year, the Mizushima A unit was scheduled for a one-month turnaround starting in October. 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 this month. 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 in the first quarter.

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 restarted operations following a forty-five day turnaround at its Group II/Group III unit in Yeosu in late Feb. The producer had built inventories to cover term commitments during the outage, but spot supplies remained limited. The plant was heard to have completed the maintenance program last week, but it could not be confirmed whether the unit was running at top rates.

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 heard to be running at around 80%-90% 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 that may be completed this month.

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

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

Also in India, HPCL was heard to be planning a 45-day turnaround at its Group II trains in May, but this was not confirmed by the producer directly.

In the Middle East, Luberef will be shutting down its Group I and Group II units in Yanbu, Saudi Arabia, for a two-week maintenance program 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. An update regarding the turnaround schedule was not forthcoming.

In the U.S., Chevron shut down its Group II plant in Pascagoula, Mississippi, in April for a four-week turnaround and catalyst change, and had built inventories to cover requirements during the outage, possibly causing some tightening of Group II spot supplies. The plant was heard to have been restarted and additional product should become available in the next few weeks. 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 – especially of Group II grades – because of uninterrupted production on the facility’s other trains, company sources said.

In the Middle East, ADNOC shut down its Group II/Group III plant in Ruwais, Abu Dhabi, UAE, for two to three weeks in early May.

Bapco was heard to have started a 10-week turnaround at its Group III facilities in Sitra, Bahrain.

Prices

Crude oil futures were steady to lower on Monday, driven by rising U.S. inventories, weakening Chinese demand, and prospects that OPEC+ might boost production in July.

On May 26, Brent July 2025 futures were trading at $64.78 per barrel on the London-based ICE Futures Europe exchange, from $65.11/bbl on May 19.

Dubai front month crude oil (Platts) financial futures for June 2025 settled at $63.20/bbl on the CME on May 23, compared to $64.06/bbl for front-month futures on May 16.

Base oil spot prices were mixed, with some moving down on lengthening supplies and lower offers, some remaining steady and some inching up on tight availability. 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 steady-to-soft. The Group I solvent neutral 150 grade slipped by $10/t to $790/t-$830/t, but the SN500 was holding at $1,030-$1,070/t. Bright stock prices were assessed slightly lower by $10/t at $1,370/t-$1,410/t, all ex-tank Singapore.

Prices for the Group II 150 neutral edged down by $10/t to $820-$860/t, and the 500N was also down by $10/t at $1,070/t-$1,110/t, ex-tank Singapore.

On an FOB Asia basis, Group I SN150 was unchanged at $660/t-$700/t, and the SN500 was hovering at $920/t-$960/t. Bright stock prices were hovering at $1,27/t0-$1,310/t, FOB Asia.

The Group II 150N was unchanged at $680/t-$720/t FOB Asia, but the 500N slipped by $10/t to $950/t-$990/t FOB Asia.

In the Group III segment, the 4 cSt grade inched up by $10/t to $1,090/t-$1,130/t, and the 6 cSt was also higher by $10/t at $1,100/t-$1,140/t. The 8 cSt also edged up by $10/t to $970/t-$1,010/t, all FOB Asia.

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.