Uncertainties related to the trade turmoil caused by United States President Donald Trump’s tariffs continued to affect economic activity in many countries, particularly those that have not yet reached an agreement with Washington. The Aug. 1 deadline for negotiations was quickly approaching. The trade disruptions will be among the factors weighing on central bankers from the U.S., Singapore and Japan this week as they decide how to move forward on interest rates, Nikkei Asia reported.

Group I
In the API Group I category, most grades continued to face upward pressure due to tight supply and demand. However, there were hopes that once the Thai producer whose plant is undergoing a turnaround completes its maintenance program in August, the strained conditions may begin to ease. Additionally, softer demand in other regions such as Europe due to the summer holidays could free up more cargoes, although Group I exports from Europe are seldom competitive enough to meet requirements in Asia. A Middle East producer was seen as a potential candidate to fill some of the supply gaps in countries such as India.

Since most Group I barrels originate in Southeast Asia and Japan, and a few plants in these areas have been shut down for maintenance, spot supplies have been limited. A Thai producer’s earlier turnaround and its focus on domestic demand, coupled with a second Thai producer’s ongoing maintenance program this month, have limited supplies from Thailand. Recent and ongoing turnarounds in Japan and the Middle East have further tightened regional Group I supply. Buyers were also watching for possible offers through tenders from Indonesia in the coming weeks.

In China, industrial activity has been less robust despite manufacturing data showing little change over the last few months, with some segments seeing an oversupply of goods that have not been shipped yet. Exports to the U.S. have slowed due to the steep tariffs imposed on Chinese products, with a fresh round of negotiations between the U.S. and China scheduled to begin in Stockholm, Sweden, on July 28 amid a possible extension of the trade truce beyond the Aug. 12 deadline. The U.S. envoy was expected to bring up topics such as the trade imbalance and China’s oil imports from Iran and Russia.

Chinese base oil demand remains subdued due to ample lubricant inventories, a seasonal slowdown in consumption and blenders’ concerns about securing base stocks that may lose value. Still, buying interest for Group I grades remained steady because of a shortage of these grades, with bright stock particularly sought. Group I prices in Asia have edged up given limited supplies, with the price of the heavy-viscosity grade SN500 actually surpassing that of Group II 500N. However, most buyers were not expected to accept higher levels for Group I grades versus Group II supplies. Domestic prices were largely maintained given the tight supply situation.

In India, import prices were stable to firm due to strained conditions over the last few weeks. Fresh supplies of Group I heavy grades from Iran following the ceasefire with Israel were expected to bring some relief, although it was heard that prices from this origin had also increased. Many consumers still preferred to rely on term volumes and availability from domestic suppliers, while demand was still dampened by the monsoons, which disrupted manufacturing and transportation.

Group II
Group II prices were mostly lower as improved availability provided buyers with more options and suppliers competed for spot purchases. Both South Korean refiners and the sole Taiwanese producer brought more product into the market. Increased domestic supplies in countries such as China also contributed to softer pricing.

With at least two Chinese Group II producers returning to production following shutdowns, domestic availability has grown, particularly as that segment is generally long given recent capacity expansions. This coincided with waning demand from several downstream sectors, particularly the automotive industry, where higher electric vehicle output has contributed to oversupply.

The Group II light grades still showed tighter availability and were better able to hold steady prices, although fresh imports from Taiwan and competitive offers from domestic producers were exerting downward pressure. Some importers offered attractive levels to reduce inventories. The heavy-viscosity grades have lost ground in China due to lengthening supplies and expectations of additional availability from regional and domestic suppliers in the coming weeks.

In India, many buyers continued to meet product needs through domestic supplies given competitive prices and ready availability, without logistical complications. However, domestic supply is not sufficient to meet all the country’s requirements, and many cargoes are still imported.

Some availability from the U.S. was expected in India as supplies there have increased. South Korean availability has also improved. Import prices on a CFR India basis were generally stable, but the Group II 500N was under increased pressure due to more available volumes and softer demand. Suppliers hoped for additional discussions to start in early August, with the end of the monsoon season in September expected to prompt more restocking.

Group III
As several regional plants resumed production following turnarounds, Group III supplies have increased, placing downward pressure on pricing. The summer holidays in Europe and waning demand in the U.S. following the peak summer driving season were also anticipated to free up more Group III barrels for Asia.

In China, finished lubricant demand has declined, leading to blenders’ concerns about holding high base oil inventories. Buying interest for high-performance Group III grades has softened. Domestic producers were competing with imports and lowered prices. A Chinese supplier offered a Group I heavy-viscosity cargo along with a Group III parcel for export this month. Only the Group I cargo was reported sold to a Southeast Asian buyer, reflecting low interest in Group III molecules in the region.

In India, Group III base oils typically see more restrained buying interest than Group II grades due to higher pricing and more limited applications. With Northeast Asian and Middle Eastern producers resuming output after annual turnarounds, the market was expected to see more offers and increased price competition. For now, Group III prices in India were largely stable.

Shipping

• Around 18,000 metric tons of base oils are expected to be shipped from South Korea to Kandla and Mumbai, India, in mid-August
• A 1,000-ton lot was discussed for shipment from Onsan, South Korea, to Singapore the first week of August
• A 6,000-ton lot was under consideration for lifting in Onsan to Antwerp, Belgium, on Aug. 5
• About 1,000 tons were quoted for shipment from Onsan to New Orleans or Houston, U.S., between Aug. 1-11
• Two cargoes are being discussed for loading in Yeosu, South Korea, and delivery to Hai Phong, Vietnam, in mid-August
• A 1,000-ton cargo was mentioned for shipment from Yeosu to Tianjin, China, in mid-August
• A 1,000-ton lot may be shipped from Onsan to Taichung, Taiwan, in early September

Production
The global base oil supply and demand balance is likely to ease as several turnarounds will be completed and plants are restarted, although ongoing shutdowns at a few units and permanent closures may continue to limit supplies in some segments.

Group I

• Thai Lube Base Oil’s Group I unit in Sriracha, Thailand, is shut for 45 days from mid-July to mid/late August
• IRPC’s Group I plant in Thailand, offline in May for maintenance, has resumed operations with limited spot availability
• In Japan, supply remains tight after shutdowns at Idemitsu’s Chiba unit and Cosmo Oil’s Yokkaichi unit
• Eneos completed maintenance at its Kainan (May–June) and Mizushima B (Feb–May) plants; Mizushima A is scheduled for October
• Two Eneos Group I plants were permanently closed in recent years
• HPCL in India restarted its Group I unit in late April or early May following a partial shutdown
• CPCL had a one-week maintenance at its Chennai plant in April
• PetroChina’s Dalian refinery began a permanent shutdown in 2023. The base oils unit closed in late 2024, with full closure expected by July 2025. Inventory clearance is scheduled by end of August
• CNPC’s Fushun plant in Liaoning is expected to increase production to offset the Dalian closure. Bright stock capacity is estimated at 60,000 t/y
• Sinopec completed a two-month turnaround at its Gaoqiao Group I and II plant in May
• Pertamina’s plant in Cilacap, Indonesia, underwent maintenance from mid-January to late February or early March

Group II

• GS Caltex completed a 45-day turnaround at its Group II/III unit in Yeosu (late February to May), with limited spot supply
• Hyundai Oilbank Shell Base Oil cut run rates at its Daesan plant in March due to feedstock limitations; increased rates in late May
• An unplanned outage at CNOOC’s Group II unit in Huizhou affected Q2 availability in China
• Sinopec’s Gaoqiao plant turnaround ended in May; its Jinan unit was shut for a month in April
• BPCL completed maintenance at its Mumbai plant in March
• HPCL reportedly conducted a 45-day turnaround in May (unconfirmed)
• Luberef shut down its Group I and II units in Yanbu, Saudi Arabia, for two weeks in Q2
• Chevron restarted its plant in Pascagoula, Mississippi, after a four-week turnaround in late May
• Motiva restarted operations in June after a three-week turnaround at its Port Arthur hydrocracker

Group III

• SK Enmove completed a partial turnaround at its Ulsan plant in late June; other trains continued production
• Adnoc shut its plant in Ruwais, UAE, for two-three weeks in early May; operations have resumed
• Bapco reportedly began a two-month turnaround at its plant in Sitra, Bahrain, in May (not confirmed)

Prices

Crude
Crude oil futures strengthened in early trading Monday on news that the U.S. had reached a tariff deal with the European Union, setting a U.S. tariff on all EU goods at 15%.

• Brent September 2025 futures traded at $69.07 per barrel on July 28, down from $69.35 on July 21 (ICE Futures Europe)
• Dubai front-month crude futures (Platts) August 2025 settled at $68.80/bbl on July 25, down from $68.47 on July 18 (CME)

Base Oils
Spot base oil prices were mixed, with some grades revised downward on lengthening supply, while others remained steady or moved up slightly.

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

• Group I solvent neutral 150: $820/t-$860/t, up $10
• SN500: $1,080-$1,120/t, up $10
• Bright stock: $1,390-$1,430/t, up $10
• Group II 150N: $850-$890/t, unchanged
• 500N: $1,080-$1,120/t, down $10

FOB Asia

• Group I SN150: $690-$730/t, up $10
• SN500: $920-$960/t, unchanged
• Bright stock: $1,280-$1,320/t, up $10
• Group II 150N: $690-$730/t, unchanged
• 500N: $910-$960/t, down $20
• Group III 4 cSt: $1,100-$1,140/t, down $10
• 6 cSt: $1,090-$1,130/t, down $10
• 8 cSt: $970-$1,010/t, unchanged

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.