The U.S. also postponed the 25% tariffs on auto imports from Mexico and Canada for one month after a meeting with major U.S. automakers Ford, General Motors and Stellantis. The temporary exemption would allow these companies to adjust their supply chains and production processes to mitigate potential economic impacts.

Expectations for spring base oil demand were somewhat tempered with the awareness that base oil consumption had declined in the previous two years and the trend was anticipated to persist. Several factors seem to have led to reduced requirements, among them extended oil drain intervals in newer vehicle models, an increase in electric and hybrid car sales, remote work – with fewer drivers commuting – and financial concerns that force companies to postpone oil changes on car fleets and agricultural equipment for as long as possible. Current geopolitical uncertainties added to a global shift in automotive and industrial lubricant consumption as well.

Most base oil segments showed steady demand and adequate inventories, and domestic prices were therefore stable, although they continued to be exposed to downward pressure from falling crude oil and feedstock prices. Last week, oil futures dropped by nearly 5% – the largest weekly decline since last October – on economic concerns and an upcoming increase in oil output by the OPEC+. That said, it remained to be seen whether OPEC+ will indeed lift its supply curbs in April as was announced last week.

Supply and demand in the API Group I segment was balanced-to-tight, although the solvent neutral 500 cut has started to show some length, while bright stock still enjoyed the spotlight. While bright stock availability was limited on a global scale, prices in the U.S. were stable because there were no shortages of product. Traders had considered export opportunities to those regions where supplies were the tightest, such as in Asia, but the arbitrage was difficult to work, and shipments may not get there until after the prevailing tightness has started to ease.

Prices in the Group II segment were also holding, and although some grades such as the mid-viscosity ones were on the long side, most cuts received support from expectations of tighter spot conditions on the heels of ongoing and upcoming plant turnarounds.

As previously reported, Calumet plans to shut down its Group I and Group II units in Shreveport, Louisiana, for two weeks in the second half of March. The turnaround had originally been scheduled for the second half of February but was later postponed due to severe winter weather conditions. The producer has assured customers that it will have built ample inventory to cover contract demand during maintenance.

Chevron was expected to commence a three-to-four-week turnaround at its Pascagoula, Mississippi, Group II plant this month, but was anticipated to have started building inventories to cover contractual obligations during the outage. The producer does not disclose details about its plant operations.

Ergon announced that the company’sparaffinic refinery in Newell, West Virginia – which houses a Group I and Group II base oils unit – has scheduled a maintenance event beginning March 31. Various operating units of the refinery will be down for approximately seven weeks as the producer implements several reliability improvements. The company also said that no supply interruptions were expected for Ergon’s current ratable customers.

Further down the road, Excel Paralubes was expected to embark on a turnaround at its Group II plant in Lake Charles, Louisiana, in the second half of this year, according to sources, and may start to build inventories ahead of the shutdown.

In the Group II+ realm, Safety-Kleen will be starting a turnaround at its rerefining plant in Breslau, Canada, early next week. The shutdowns typically last a week or less, and are planned well in advance, so the producer has sufficient inventory in place to cover contract commitments.

Avista Oil’s rerefining Group II+/Group III plant in Peachtree City, Georgia, is currently undergoing a four-day planned shutdown that was not expected to have any impact on customers’ orders as the producer also prepares inventories ahead of time.

The Group III segments seemed to have attained more balanced fundamentals as well, which lowered the downward pressure on prices observed late last year and earlier this year.

Reduced Group III production at domestic plants and restrained import volumes allowed for prices to gain a firmer footing. Tariffs on Canadian energy imports were put on hold for now, and it remained to be seen whether Group III base oils would be subject to the proposed levies.

A couple of spot cargoes were being offered in the U.S. but elicited moderate buying interest because most consumers had enough inventories to cover current requirements. Upcoming plant turnarounds in Canada, the Middle East and Asia might further strain global spot availability and offer support to prices as well.

In Canada, Petro-Canada plans to embark on a one-month turnaround at its Group III plant in Mississauga in April.

In South Korea, SK Enmove will be completing a partial turnaround at its Group III plant in Ulsan for two months, starting in May, but the shutdown was not expected to have a significant impact on supplies because of uninterrupted production on the facility’s other trains, company sources said.

In the Middle East, Bapco was heard to have scheduled a 45-day turnaround at its Group III facilities in Sitra, Bahrain, starting in late March or early April.

In Group III production news, Chevron announced that it will start production of Group III+ base oils at its Pascagoula, Mississippi, facility by the end of 2026 (for more on this, go to this week’s Lube Report)

Paraffinic base oil export movements were lackluster because of reduced demand from countries such as Brazil, which was an avid buyer of U.S. base oils during most of 2024. Steep U.S. prices, lackluster demand at the beginning of the month due to the Carnival holidays and availability of competitively-priced domestic products – particularly given a weaker local currency against the U.S. dollar – have contributed to more muted buying appetite. Brazilian buyers were also heard to be looking for opportunities to import cargoes from other origins, although it was not clear how lubricant approvals might affect some of these purchases.

Mexican buyers were more active over the last couple of weeks as they hoped to build inventories ahead of the potential implementation of tariffs on U.S. imports.

On the naphthenics base oils front, prices were holding at similar levels as last week, but there was some upward pressure on the light pale oils as supplies have tightened on the back of emerging demand and reduced availability following San Joaquin Refining’s plant turnaround. The tighter supply scenario was partly offsetting the falling crude oil and feedstock values seen over the last several weeks.

San Joaquin’s naphthenic base oil plant in Bakersfield, California, completed a turnaround Jan. 31-Feb. 28. The producer continued to meet contractual obligations during the shutdown as it had built inventories for that purpose and was trying to catch up on additional orders. The producer was understood to have a long waiting list for pale oil 60 and 100, which have also seen limited availability from other suppliers.

There were also expectations that Ergon would be completing a maintenance program at its naphthenic base oils plant in Vicksburg, Mississippi, later this year, following a turnaround at its paraffinic plant in West Virginia, although no further details were available.

Crude Oil and Diesel Prices

Crude oil futures were on a downward trend for most of the previous week amid market uncertainties and tariff turmoil but settled slightly up on Tuesday on a weaker dollar, although concerns about an economic slowdown in the U.S. capped the gains.

On March 11, West Texas Intermediate April 2025 futures settled on the Nymex at $66.25 per barrel, compared with $68.26/bbl on March 4.

Brent futures for May 2025 delivery were trading on the ICE at $70/bbl on March 11, from $71.04/bbl on March 4.

Louisiana Light Sweet crude wholesale spot prices were hovering at $70.16/bbl on March 10, from $72.53/bbl on March 3, according to the U.S. Energy Information Administration.

Low sulfur diesel wholesale spot prices were $2.19/gal New York Harbor, $2.12/gal Gulf Coast and $2.08/gal Los Angeles on March 10, compared with $2.23/gal, $2.22/gal and $2.28/gal, respectively, on March 3, according to the EIA.

Gabriela Wheeler can be reached directly at gabriela@LubesnGreases.com

*ExxonMobil prices obtained indirectly.
**Rerefiner

Posted Paraffinic Base Oil Prices: March 12, 2025
(Prices are FOB basis, in U.S. dollars per gallon and U.S. dollars per metric ton).
Lubes’n’Greases Publications shall not be liable for commercial decisions based on the contents of this report.
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