The Trump administration has also called for actions against the Chinese shipping segment, introducing phased service fees for vessels operated by Chinese companies, or built in China, which could affect shipping operators globally. Chinese-owned or operated vessels will be subject to special fees on each voyage, starting October 14. However, specialized chemical tankers built for bulk liquid chemical transport appeared to be exempt from the fees, according to market sources.

The uncertainties trickled down to many economic sectors, dampening business in areas related to base oils and lubricants, including the automotive, industrial and construction industries, despite the fact that base oils appeared to be largely exempt from increased tariffs. For example, South Korean base oil exports to the U.S. were not expected to be subject to the country-specific tariffs that Trump had announced earlier this month, which have now been put on hold for 90 days, because base oils fall into the energy commodities category making them exempt, according to market sources.

Base oil producers and consumers alike kept a watchful eye on crude oil prices, as they have fallen dramatically since March, exerting downward pressure on base oils. Even though crude oil price swings do not translate into base oil price fluctuations overnight, they eventually impact pricing, particularly in some countries like Japan that calculate their quarterly base oil prices against a basket of products, including crude oil.

Amid all of the turmoil, base oil spot pricing was little changed this week because many participants have adopted a wait-and-see stance, hoping that a clearer picture emerges once the dust begins to settle.

A global tight supply and demand situation in the API Group I segment has led to firm pricing, particularly of bright stock, which remained in high demand. A couple of plant turnarounds in Southeast Asia and ongoing maintenance in Japan had exacerbated the snug conditions in Asia, but production has resumed in Southeast Asia and additional spot cargoes were expected to become available, although they were still limited because of domestic term obligations. An Indonesian supplier has offered Group I cargoes through a tender this month, but prices were heard to be holding because buyers were resisting higher offers as they were unsure of being able to recoup the hikes through lubricant sales.

In the Group II segment, spot supply of the light-viscosity grades has lengthened slightly, despite plant shutdowns, as demand from the automotive industry has slumped and there was downward pressure from weakening feedstock values. Automakers in several countries have been hurt by the new U.S. tariffs on cars, and while South Korea and Japan stand out as key exporters to the U.S., vehicles from other Asian nations are also shipped there.

Additionally, there were expectations of increased Group II spot supplies once a South Korean producer resumes output in the next few days, following a maintenance program.

Ongoing demand for Group III cuts against tigthening supplies due to plant turnarounds appeared to insulate these grades from downward pressure, but a slump in demand from the automotive sector has started to weigh on prices. There had been concerns about reduced supplies from the Middle East because of a producer’s expected turnaround in March/April, but the supplier was heard to have delayed its shutdown.

Buying interest for imports has declined in China because of a general slowdown in base oil demand as industrial production has been affected by potentially reduced exports to the U.S. in the coming weeks due to the ongoing trade conflict. At the same time, lubricant blenders who import raw materials and components such as additives from the U.S. were facing sharply higher costs.

Domestic prices of most base oil grades were generally stable, but just like in the rest of Asia, Group II prices in China were exposed to downward pressure due to growing availability and falling feedstock prices amid efforts to reduce inventories in an uncertain business environment. Domestic supplies were also deemed plentiful.

Group III values were holding at levels seen the previous week, with Chinese domestic suppliers still trying to remain competitive against imported volumes to gain or maintain market share.

Nowhere has the wait-and-see trend been more evident than in India, where buyers have retreated in hopes that lower crude oil and feedstock prices would be reflected in reduced spot base oil values in the coming days.

The expected restart of a South Korean producer was anticipated to bring more Group II offers to the table in May-June and buyers were therefore less anxious about securing product. Furthermore, most consumers seemed to be able to run day-to-day operations with contract volumes, mainly of domestic supplies.

Imports of Group I and Group II light grades were heard to have slipped by about $5/ton to $10/ton on a CFR India basis on expectations of increased supplies in May.

Converserly, the Group III grades were largely steady on limited spot supply, given plant turnarounds and more attractive pricing in other regions, which was drawing many of the available spot cargoes away from India.

In shipping circles, a 6,000-metric ton cargo was quoted for shipment from Daesan, South Korea, to Mumbai and Karachi, Pakistan, between May 15-19. A 4,000-ton parcel was likely to be shipped from the Middle East to West Coast India at the end of April.

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, and upcoming turnarounds may reduce supplies further.

In India, Hindustan Petroleum Corp. Ltd. was expected to restart its Group I and Group II plant after a partial turnaround that started in late February.

Also in India, Chennai Petroleum Corp. Ltd. scheduled a one-week turnaround at its Group I plant in Chennai this month.

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 were expectations that Fushun would be ready to start producing additional Group I in April.

Also in China, Sinopec was understood to have scheduled 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 this year. The Mizushima B plant was expected to be shut down in Feb. for an extended turnaround that will last until May. 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. While the producer was expected to build inventories ahead of the outage to meet term obligations, it was likely to prioritize domestic commitments and reduce volumes offered for spot business.

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, according to reports. This had constrained the volumes available for export from the facility, but the plant was heard to have been restarted and additional cargoes were expected to be offered into the spot market.

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 started a 45-day turnaround at its Group II/Group III plant in Yeosu in late Feb. and had built inventories to cover term commitments during the outage, but spot supplies remained limited. The plant was anticipated to complete the maintenance program over the next few days.

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 now running at around 80% capacity.

In China, an unplanned outage at the CNOOC Group II unit in Huizhou may be impacting availability in the domestic market.

As mentioned above, Sinopec was understood to have scheduled a two-month turnaround at its Gaoqiao Group I and Group II plant starting this month.

Sinopec was also expected to shut down its Jinan 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.

In the Middle East, Luberef will shut 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.

Also in the Middle East, ADNOC was expected to shut down its Group II/Group III plant in Ruwais, Abu Dhabi, for two to three weeks in April.

In the U.S., Chevron was expected to shut down its Group II plant in Pascagoula, Mississippi, in April for a three-to-four-week turnaround and has built inventories to cover requirements during the outage, possibly causing some tightening of Group II spot supplies. There was no direct confirmation about the turnaround from the producer.

There were also reports that S-Oil has trimmed operating rates at its Group II/ Group III plant in Onsan, South Korea, due to reduced global demand.

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 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 early April, but the turnaround may have been delayed, although further details could not be confirmed.

Prices

Crude oil futures remained bearish due to concerns about a potential global recession triggered by the new U.S. tariff regime. Futures were trading lower on Monday morning as there appeared to be some progress in the negotiations between the U.S. and Iran on a nuclear deal, which would allow more Iranian crude oil to enter the market. Expectations that OPEC+ would stick with its plan to raise output by 411,000 barrels per day in May pressured prices further.

On April 21, Brent June 2025 futures were trading at $65.73 per barrel on the London-based ICE Futures Europe exchange, from $65.73/bbl on April 14. Brent futures were trading at $74.01/bbl on March 31.

Dubai front month crude oil (Platts) financial futures for May 2025 settled at $65.28 per barrel on the CME on April 11, compared to $65.28 on April 11. April futures settled at $74/bbl on March 28.

Spot base oil prices were generally steady to firm, depending on supply and demand fundamentals. 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 generally steady. Group I solvent neutral 150 was assessed at $790/t-$830/t, and SN500 held at $1,040/t-$1,080/t. Bright stock prices were hovering at $1,370/t-$1,410/t, all ex-tank Singapore.

Prices for the Group II 150 neutral were heard at $840/t-$880/t, and the 500N at $1,080/t-$1,120/t, ex-tank Singapore.

On an FOB Asia basis, Group I SN150 was slightly lower by $10/t at $650/t-690/t and SN500 was assessed at $910/t-$950/t. Bright stock prices were firm at $1,230/t-$1,270/t, FOB Asia on tight supplies.

Group II 150N slipped by $10/t to $690/t-$730/t FOB Asia on subdued buying interest and lengthening supplies, while the 500N held at $970/t-$1,010/t FOB Asia.

In the Group III segment, 4 cSt was steady at $1,060/t-$1,100/t, 6 cSt was unchanged at $1,070/t-$1,110/t and 8 cSt was assessed at $950/t-$990/t, all FOB Asia.

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

Lubes’n’Greases shall not be liable for commercial decisions based on the contents of this report.