Last week, the U.S. Court of International Trade blocked the implementation of Trump’s tariffs as it ruled that the duties had exceeded his authority. However, on Thursday, a federal appeals court in Washington temporarily reinstated the most sweeping of tariffs, and ordered the plaintiffs in the cases to respond by June 5 and the administration by June 9, Reuters reported. The baffling tariff landscape caused much concern in countries whose economies rely heavily on exports to the U.S.

The contentious tariffs had also been pressuring crude oil prices, as dampened economic activity in key importing countries such as China would likely lead to reduced global demand. OPEC+’s decision to increase output in July by the same amount it did in the previous two months also weighed on prices, but futures climbed on Monday on low levels of U.S. fuel inventories, which fanned supply concerns ahead of expectations of an above-average hurricane season.

Group I

The API Group I segment continued to see support from healthy demand and reduced availability due to recent and ongoing plant turnarounds and permanent plant closures over the last few years. Healthy premiums against gasoil values served as an incentive for refiners to run plants at top rates.

While base oil market prospects in China were less optimistic than earlier in the year, demand for the heavy viscosity grades and bright stock seemed to continue on a fairly steady course, although buying interest for imports has subsided. This was partly the result of the substantial increase in pricing over the last several months, and while Chinese buyers seemed inclined to accept international prices in March to secure Southeast Asian material, they have turned towards domestic supply as prices were deemed more competitive and offered fewer logistical risks. The resumption of output at Chinese plants also meant that more domestic product should become available in the coming months.

A slowdown in industrial output rates and marine transportation in China also led to reduced demand for Group I grades, partly offsetting tight supply conditions. Activity in those segments was said to have been impacted by the ongoing trade war with the U.S. The U.S. tariffs were affecting exports not only from China, but from other Asian nations as well and this led to reduced demand for vessel space and bunker fuel. With fewer ships covering the regular trade routes, there would be less demand for marine fuels and lubricants, sources commented.

Prices for Group I base oils, and bright stock in particular, had jumped because of plant turnarounds in Southeast Asia, Japan and the Middle East. This condition had curtailed regional availability and was exacerbated by Southeast Asian producers’ need to meet domestic and term requirements vis-à-vis spot export inquiries.

Some plants have been restarted though, while others remained shut down for maintenance. Higher Group I and Group II export volumes from Singapore to Southeast Asia in May pointed at adequate availability and fairly robust demand last month. A tender offering Group I grades from a Thai producer was concluded in the second half of May within the assessed ranges, and there was availability reported from an Indonesian supplier. The restart of IRPC in Thailand after a 10-day turnaround meant that additional spot material would become available. However, it was heard that the producer had already completed June shipments.

In India, strained spot supplies of most grades had largely supported Group I prices in the previous weeks, particularly for bright stock, but buyers have adjusted down their price ideas because of the approach of the heavy rains season, when demand tends to fall. With domestic plants running quite well, many buyers turned to locally-produced material. But domestic product had also been fairly tight given plant turnarounds at Indian refineries in the previous months, and Iranian material, which is sometimes available in India, was also expected to remain snug given a plant maintenance program.

Group II

Price trends between Group I and Group II base oils seem to be diverging, with the Group II heavy viscosity grade seeing downward adjustments due to lengthening supply, while keen buying interest for the lighter grades was noted, supporting more stable pricing.

In China, demand for Group II imports has subsided, perhaps because of the upcoming completion of plant turnarounds in the region and at domestic units and expectations of increased availability. Buyers preferred to hold off on purchases in hopes that prices would decline given improved supply levels.

Increased availability of Group II cuts in South Korea had started to exert pressure on offers, with some cargoes heard to have been awarded to regional buyers at lower prices. A South Korean producer was heard to continue running its plant at reduced rates due to feedstock supply issues, but this could not be confirmed.

While export volumes moving from Singapore to Southeast Asia remained fairly healthy in May, they were less so to India, likely reflecting a seasonal slowdown in demand.

Indian buyers have become more cautious in terms of purchased volumes as the monsoon season has started and the heavy rains pose challenges to production and transportation. Most consumers were expected to have built inventories ahead of the monsoons, but others had been delaying purchases in hopes of obtaining lower prices. The plentiful availability of heavy grades exerted pressure on price ideas for domestic and imported material in India.

Many buyers also preferred to secure base oils from domestic suppliers whenever possible as prices were attractive and could be delivered on short notice versus shipments coming from faraway origins such as the U.S.

Nevertheless, there was talk about U.S. cargoes moving to India because a large producer has restarted its plant and supplies were expected to lengthen, although many Northamerican buyers and sellers were also padding inventories ahead of the hurricane season and this might reduce spot availability.

Group III

The Group III segment continued to display tight conditions, particularly for the 4 cSt and 6 cSt grades because of plant maintenance in Asia and the Middle East and steady demand. The snug supply has driven prices up for these two grades, while the 8 cSt was relatively stable. Asian buyers had to adjust their bids up in order to compete for volumes that would otherwise move to Europe, where prices were firm and demand has picked up ahead of the summer holidays and peak driving season.

In China, competition between domestic suppliers and imported product was ongoing, because local refiners were doing their utmost to maintain or gain market share. Demand was generally lackluster in any case, leading to fewer import shipments and balancing out the reduced availability from the Middle East where a couple of turnarounds were taking place.

Group III buying appetite in India was steady, but not hefty, and the tighter global supply and demand conditions has lifted CFR India pricing, making it less attractive for blenders who were able to use Group II grades in some applications. South Korean spot availability remained limited because of a maintenance program in one facility and reduced spot volumes on offer from a second supplier.

Shipping

A number of base oil inquiries were under discussion, with an 8,000-10,000-metric-ton cargo mentioned for shipment from the U.S. Gulf to West Coast India in late May. A 900-ton parcel was expected to be shipped from Onsan, South Korea, to Taichung, Taiwan, at the end of June. A second cargo of approximately 1,000 tons was on the table for shipment from Onsan to Bangkok, Thailand, in late June. A 2,300-ton lot was expected to be shipped from Onsan to Huizhou, China, between June 20-22. A 4,000-ton lot was being considered for shipment from Onsan to Yanbu, Saudi Arabia, in mid June. A 1,100-ton cargo was quoted for shipment from Onsan to Nagoya, Japan, in July. A 2,000-ton cargo was also mentioned for lifting in Yeosu, South Korea, to Zhuhai, China, in the first half of July. About 4,500 tons were discussed for shipment from Ulsan, South Korea, to Rio de Janeiro, Brazil, in the second half of 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 over the last few weeks, 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. The company 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 (CNPC)/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 tons per year. There unconfirmed reports that Fushun had started producing additional Group I in late April/early May.

Also in China, Sinopec completed 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 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. The plant was expected to have been restarted. 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 in May. The producer was heard to have built inventories to cover term commitments during the outage and has begun to offer spot supplies following the restart, according to reports.

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. 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 45-day turnaround at its Group II/Group III unit in Yeosu in late February. 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 in May.

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 expected to be running at around 80%-90% capacity.

In China, an unplanned outage at the CNOOC Group II unit in Huizhou impacted availability in the domestic market over the previous three months.

As mentioned above, Sinopec was understood to have scheduled a two-month turnaround at its Gaoqiao Group I and Group II plant that was expected to have been completed in May.

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, Hindustan Petroleum 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 – 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, United Arab Emirates, 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, in May.

Prices

Crude oil futures edged up on Monday, despite news that OPEC+ had agreed on output hikes for a third consecutive time this year, fresh threats of U.S. tariffs, and new trade tensions between the U.S. and China. The upward trend was attributed to a draw in U.S. crude supplies, coupled with expectations of higher demand during the summer season, temporarily assuaging fears of a global oil glut.

On June 2, Brent August 2025 futures were trading at $65.03 per barrel on the London-based ICE Futures Europe exchange, from $64.78/bbl for July futures on May 26.

Dubai front month crude oil (Platts) financial futures for June 2025 settled at $61.67/bbl on the CME on May 30, compared to $63.20/bbl for front-month futures on May 23.

Base oil spot prices were mixed, with some edging down on lengthening supplies and lower offers, and most grades remaining steady on tighter 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 was unchanged at $790/t-$830/t, but the SN500 was assessed down by $10/t at $1,020/t-$1,060/t. Bright stock prices were steady at $1,370/t-$1,410/t, all ex-tank Singapore.

Prices for the Group II 150 neutral were hovering at $820/t-$860/t, and the 500N was heard 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 steady at $920/t-$960/t. Bright stock prices were adjusted down by $10/t to better reflect current discussions taking place within a $1,260/t-$1,300/t FOB Asia range.

The Group II 150N was unchanged at $680/t-$720/t FOB Asia, but the 500N was lower by $10/t at $940/t-$980/t FOB Asia.

In the Group III segment, the 4 cSt grade was stable at $1,090/t-$1,130/t and 6 cSt was holding at $1,100/t-$1,140/t. The 8 cSt was assessed at $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.