Manufacturing rates in some countries have been affected by the trade disruptions brought on by U.S. President Donald Trump’s tariffs, as steep levies imposed on thousands of exports have dampened business. This has also led to the reduced movement of goods on transpacific routes, lowering the number of vessels being utilized and curbing marine fuel and lubricant demand.

Group I

While the API Group I category was likely the tightest segment of all, there has been some relief from the snug conditions as demand has softened, while a number of plants have resumed production or are about to restart, following turnarounds.

Availability from Southeast Asia was heard to have increased at a time when consumption in key markets such as China declined. Base oils and lubricants demand typically weakens after the spring production season, and this year this seemed to have been exacerbated by a slowdown in some economic sectors such as the industrial, marine and heavy-duty transportation segments on the back of steeper U.S. tariffs on Chinese imports.

Prices for Group I base oils had increased because of plant outages in Southeast Asia, Japan and the Middle East, as the shutdowns had tightened supplies in the region. Chinese buyers had started to resist the high offers for Group I imports, especially for bright stock, which had edged up consistently over the last six months. China suffers from a deficit of the heavy-viscosity grades, and while buyers still needed to secure Group I base oils, they were less interested in securing imported products at the higher prices. Instead, they tried to meet requirements through existing inventories and domestic supply. Importers were delaying the purchase of additional imported volumes hoping to secure material at lower prices at a later date as supplies were expected to lengthen.

It was heard that an Indonesian supplier had offered some Group I spot cargoes, and there might be improved availability in Thailand after a producer completed a turnaround. The restart of a Thai unit after a maintenance program last month meant that additional spot material should become available in the coming weeks, although the producer seemed to have already placed all of its June supplies. A second Thai producer was understood to be planning to start a turnaround in July, (as mentioned below), which might take some barrels out of the spot supply system this month because the producer was likely to build inventories ahead of the shutdown and restrain spot sales.

In India, the start of the monsoon season dampened buying interest in additional spot cargoes. Indian buyers have become more conservative regarding purchases because the heavy rains pose challenges to industrial production and transportation.

Most blenders were hoping to cover product needs through term volumes and domestic material, particularly as local producers have lowered Group I prices following the completion of plant maintenance programs and an uptick in availability.

The lack of demand in India offset the limited options to secure Group I imports, which remained strained in Southeast Asia and the Middle East. Some Group I bright stock from Southeast Asia was heard to have been offered for shipment to India, and there were reports of U.S. product having been secured to cover a few requirements as well.

Group II

Declining demand for base oils in China has prompted regional suppliers to move Group II product to outlets that offered higher margins. At the same time, import prices for Group II grades have started to move up in China due to the more limited availability, countering the trend in the rest of the region that saw Group II prices decline on increased supplies, following a number of refinery restarts. The heavy viscosity grades were also exposed to the downward pressure given ample availability.

Offers of Group II grades of South Korean origin into India have also multiplied as more product has become available, and this has exerted pressure on pricing, particularly that of the heavy grade 600N. Availability of the light-viscosity grade of South Korean origin was more limited and this supported steady prices for the time being.

Buying interest in U.S. Group II cargoes, which were not abundant in any case, was muted because of the risk of securing product that may lose value while in transit over the next few weeks given ebbing buying interest and growing supplies in the region.

Group III

Group III import activity in China has declined as demand has started to fizzle on seasonal patterns. Domestic Group III producers continued to offer competitive prices to keep imports at bay, and most of the local production was consumed within China, leaving little surplus available for export.

Group III prices have edged up in Asia due to the ongoing tight supply and demand balance, with the 4 cSt grade seeing the largest upward revisions compared to the 6 cSt and the 8 cSt because of keen buying interest.

In India, Group III prices were largely stable as supplies were deemed adequate to cover the current call for product. Group III spot availability remained tight in Asia and the Middle East due to recent and ongoing turnarounds and prices were firm. But the snug supplies seemed to have limited impact on Indian blenders as Group III grades are mostly used in automotive applications and due to the heavy monsoon rains, the automotive, logistics and transportation segments were expected to suffer a slowdown.

Shipping

Discussions in shipping circles were more muted as base oils demand was generally softer in Asia. A 5,000-8,000-metric-ton cargo was mentioned for possible shipment from Ruwais, United Arab Emirates, to India at the end of June. A 5,000-ton lot was also on the table for shipment from Hamriyah, United Arab Emirates, to Singapore in mid-June. About 1,000 tons were expected to be shipped from Onsan, South Korea, to Zhangjiagang, China, with another 2,000 tons moving to Jingjiang, China, from the same origin in the second half of June.

Production

The global base oil supply and demand balance is likely to ease as a number of turnarounds will be completed and plants are expected to be restarted, although ongoing shutdowns at a few units, together with permanent closures over the last few years may continue to crimp supplies in some base oil segments.

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 have completed 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 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 for 45 days, 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 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 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, 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, 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 were largely steady in early trading on Monday after a weekly surge, with Brent hovering above $66 per barrel as U.S.-China trade talks raised hopes of a potential resolution of the dispute and the possibility of increased oil demand given more stable economic conditions.

On June 9, Brent August 2025 futures were trading at $66.38 per barrel on the London-based ICE Futures Europe exchange, from $65.03/bbl on June .2

Dubai front month crude oil (Platts) financial futures for July 2025 settled at $65.38/bbl on the CME on June 6, compared to $61.67/bbl for front-month futures on May 30.

Base oil spot prices were generally stable-to-firm as buyers and sellers reassessed their positions and some grades remained tight. 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-firm. Group I solvent neutral 150 was unchanged at $790/t-$830/t but SN500 was higher by $20/t at $1,040/t-$1,080/t. Bright stock prices were steady at $1,370-$1,410/t, all ex-tank Singapore.

Prices for Group II 150 neutral hovered at $820/t-$860/t and 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 SN500 was steady at $920/t-$960/t. Bright stock prices hovered at $1,260/t-$1,300/t FOB Asia.

Group II 150N was unchanged at $680/t-$720/t FOB Asia and 500N was assessed at $940/t-$980/t, FOB Asia.

In the Group III segment, 4 cSt was assessed up by $20/t at $1,110/t-$1,150/t but 6 cSt held at $1,100/t-$1,140/t. The 8 cSt was steady 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.