Base Oil Market Remains Subdued Amid Supply Constraints and Price Volatility

Key Highlights:

• Price Overview: Bulk N150 & N70 at ₹62.5/L; Barrel SN150 at ₹67/KG in Delhi.
• Supply Constraints: Turnarounds in India, Japan, and South Korea tighten Group I/II supply.
• Import Shifts: Indian buyers favor domestic supply; Group I imports persist for select grades.
• Crude Oil Impact: Prices supported by U.S.-Iran tensions and OPEC+ output signals.

Petroleum Price: Market Prices & Movement

• As of March 25, 2025, base oil prices vary across different grades and locations. In the bulk category, N150 is priced at ₹62.5/L in Mundra, while N70 in Mumbai is also at ₹62.5/L. 
• The N60 grade in Kandla stands at ₹65/L, whereas N220 is at ₹72/L. The 4cST grade in Mumbai is priced at ₹75/L, and 8cST in Mumbai is ₹73/L. SN150 is available in Kandla at ₹60.5/L, while SN500 in Kandla is ₹84/KG. N500 is priced at ₹95.5/KG in Silvassa.
• For barrel packaging, BS-150 in Delhi is priced at ₹117/KG, while SN150 in Delhi is ₹67/KG. The N150 grade in Delhi is priced at ₹68.5/L, and 4cST in Delhi is ₹75.72/KG. SN500 in Delhi is priced at ₹89/KG, while N500 is at ₹102/KG. 

Petroleum Demand and Supply: Trade Flow & Availability

• The base oil market in Asia continues to face subdued demand and tight supply conditions. Refinery turnarounds and permanent closures have restricted spot availability, supporting base oil prices despite weak demand. 
• Buyers remain cautious, preferring to wait for market developments before making purchasing decisions. 
• In China, domestic Group II production is sufficient to meet current demand, while interest in imported Group I grades remains due to a structural deficit of high-viscosity grades. 
• Indian buyers have shifted focus toward domestic production as local offers remain competitive, although imports of select Group I and Group II grades continue. 
• In Southeast Asia, Pertamina’s resumption of Group I production post-turnaround has slightly eased supply constraints. 
• Meanwhile, Group III competition between domestic and imported products remains high, leading to price revisions.

Petroleum News and Industry Developments

• Crude oil prices saw an unexpected rise due to optimistic economic data from China and new U.S. sanctions on Iran, which could tighten oil availability.
• OPEC+ announced potential output adjustments, further influencing crude and base oil markets.
• China’s Sinopec reported a 16.8% decline in net profit for 2024, citing lower crude oil prices and accelerated EV development.
• Economic policies in China aim to boost domestic demand and energy investments amid concerns over U.S. tariffs.
• Indonesia’s Pertamina resumed production following a turnaround, adding to Group I availability.
• Indian refiners are conducting maintenance, tightening Group I and Group II supply, though output is expected to resume in April.
• In Japan, Group I supplies remain constrained after extended refinery shutdowns, but a restart is underway.
• South Korean refiners are undergoing planned turnarounds, limiting Group II/III availability.
• Middle Eastern suppliers are maintaining competitive pricing, with some refineries planning maintenance shutdowns.
• U.S. Chevron plans a turnaround at its Group II plant in April, potentially tightening exports to India.

Expert Opinion: Weak Demand may Cap Price Increases

• Market participants anticipate continued supply tightness, especially for Group I and high-viscosity Group II grades, due to ongoing refinery maintenance and plant closures. Prices may see further support from crude oil trends, but weak demand could cap gains. Buyers are expected to remain cautious, relying on contract volumes and domestic supplies rather than spot purchases. 
• While Group III availability remains stable, competition between domestic and imported grades could lead to further price adjustments. The outlook for the next quarter remains uncertain, with buyers closely monitoring crude price movements and regional refinery activity.