North America
The North American base oils industry underwent significant transformation since the COVID-19 pandemic, as consumption patterns and supply chain management were deeply affected by transportation disruptions and a sharp decline in automotive lubricant demand largely because consumers stayed away from their workplaces and worked from home, leading to a significant drop in vehicle miles traveled. In the U.S., total miles driven dropped by more than 40% in late March 2020, with some states seeing mileage reductions of over 60% compared with pre-pandemic levels.
This trend continued into 2024, and although many companies required a full-time return to the office, quite a few allowed for a hybrid work model, or preserved remote work for all their employees. At the same time, stricter emissions and fuel standards, longer oil drain intervals and a higher rate of adoption of electric and hybrid vehicles, incentivized by government tax benefits, also impacted demand for passenger car motor oils and ultimately deepened the decline in base oil demand that had been observed over the last twenty years.
In terms of pricing, the first week of 2024 ushered in fresh posted base oil price decreases in the North American market, with several producers announcing markdowns that went into effect on January 1, 2024, reflecting a steady decline during the last few weeks of 2023—a seasonal occurrence that seemed to be prolonged into the first few months of the new year. Spot prices had also been gradually losing ground as suppliers tried to encourage domestic sales as well as export transactions.
Similarly, in the first few weeks of 2025, soft fundamentals exerted downward pressure on base oil prices. Market participants hoped that domestic base oil consumption would improve compared to 2024, given that demand had been down by an average of 6-8% from the previous year. The market was also expected to face uncertainties related to the trade policies and immigration rules likely to be embraced by newly elected United States president Donald Trump.
In early 2025, however, there were no posted price decreases as base oil values received some support from an unexpected shutdown at the Excel Paralubes API Group II/Group III plant in Lake Charles, Louisiana, in November 2024 that led to a temporary reduction of short-term spot supply. Another factor that tightened supplies was the three-week turnaround that Chevron had scheduled at its Pascagoula, Mississippi, plant, in March 2025, because the company had started to build inventories to cover commitments during the outage. A fairly heavy turnaround schedule in the first half of 2025 continued to support stable naphthenic and paraffinic base oil postings. Several producers communicated posted price increases in February given a tighter supply and demand balance, with postings seeing very few revisions thereafter. Crude oil prices had moved up in January and remained at steep levels, with West Texas Intermediate hovering near $75 per barrel, providing further support to base oil pricing.
It was only in December 2025 that the market saw another round of posted price revisions, this time lowering Group I and Group II prices as a seasonal drop in demand – not only from the automotive industry, but also from the industrial segment given reduced manufacturing rates – together with plentiful inventories and extra barrels kept during hurricane season had started to weigh heavily on pricing. Softer crude oil and diesel values also exerted pressure. As an example, the posted price of ExxonMobil’s Group I SN100 cut was hovering at $5.74 per gallon in January 2025 and was adjusted down to $5.44/gal in December.
Asia
A snug base oil supply scenario and improved demand supported firm first-quarter 2024 spot price assessments in Asia, although values in some segments began to unravel as availability of certain grades started to mount, particularly in the API Group III segment, given high production rates at most plants. At the same time, crude oil futures rose to multi-month highs on expectations of firm demand in the United States and China, along with Ukrainian attacks on Russian energy infrastructure. The steep crude oil and gasoil values resulted in higher production costs for refiners and this was reflected in base oil prices. Spot prices hovered at elevated levels throughout the first half of 2024, supported by reduced supply given plant turnarounds and robust demand. However, prices showed a steady decline in the second half of 2024 as production rates improved and consumption levels slowed down given reduced activity due to the monsoons in some countries, national holidays and economic uncertainties.
This trend persisted into the first few weeks of 2025, with most base oil prices remaining under downward pressure in Asian markets until the second quarter, when values moved up on reduced supplies given a number of plant turnarounds and reduced output against steady demand levels.
A seasonal slowdown, growing economic uncertainties, tariff turmoil–particularly affecting those nations that largely depend on exports to the United States, and growing inventories along with new capacity coming on stream resulted in lower spot prices in the second half of 2025.
Even Group I bright stock, which had shown an upward price trajectory for most of the year, fell in the last few weeks of 2025 given lengthening supplies, slipping from a peak of $1,280-1,320 per metric ton FOB Asia in August 2025 to $1,120-1,160/t FOB in December. At the same time, the light base oil grades were able to maintain price levels more consistently than their heavy-viscosity counterparts for most of the year, with the Group II 150N declining from $720-760/t FOB Asia in March 2025 to $680-720/t FOB in June, and then rebounding to March levels near $720-760/t FOB Asia in December due to tighter supply and demand fundamentals.
Europe
Throughout 2025, geopolitical factors played a decisive role in shaping base oil markets across Europe, the Middle East and Africa. At the start of the year, crude traded near $75 per barrel, while Group I and II base oils were priced higher than current levels. Demand remained weak, with major economies under pressure and recession concerns widespread. Group III markets were burdened by slow European demand and excess supply built in late 2024.
By late spring, sharply reduced cargo arrivals from Asia-Pacific and the Middle East Gulf tightened Group III supplies, driven by refinery turnarounds, shipping disruptions and Red Sea security issues. Conditions eased once supply resumed from Korea and Malaysia, even as demand improved.
Group I markets adjusted to new supply sources, with Europe becoming a net importer, supporting prices and maintaining premiums over distillates. Group II experienced relative strength, particularly in the Middle East Gulf, while European prices remained insulated from global markets.
Despite ongoing price erosion linked to lower crude prices and weak demand, supply disruptions – including refinery fires in France and Hungary – helped balance European markets. African and Middle Eastern markets continued shifting toward premium base oils. Late in the year, Russian producers withdrew from export markets. Prospects for easing geopolitical tensions offered cautious optimism for 2026.