Base Oil Market Steady Amid Soft Demand and Geopolitical Influences

Key Highlights

• Crude Oil Prices: Prices rebounded due to strong Chinese industrial growth and geopolitical risks in key trade routes.
• Base Oil Market: Prices remained stable, with ample supply and weak buyer sentiment limiting upward movement.
• India’s Crude Imports: Russia overtook the UAE as India’s top naphtha supplier, with shifting trade dynamics among Gulf nations.
• Market Outlook: Volatility persists due to China’s economic measures, geopolitical tensions, and global supply chain uncertainties.

Petroleum Price: Crude Oil & Base Oil Price Trends

• Base oil prices remained stable to slightly soft across various grades. In Singapore, Group I SN150 was assessed at $790-830/t, SN500 at $1,040-1,080/t, and Bright Stock at $1,360-1,400/t. 
• Group II 150N slipped by $10/t to $840-880/t, while 500N held firm at $1,070-1,110/t. FOB Asia values reflected a similar trend, with Group I SN150 at $660-700/t and SN500 at $900-940/t. 
• Group III 4 cSt and 6 cSt remained stable, while 8 cSt declined by $10/t to $950-990/t.
• Base oil prices varied across locations and product grades. In the bulk segment, N150 was priced at $63.50/t in Mundra, while N500 stood at $96.50/t in Silvassa.** In Mumbai, N70 was available at $63.50/t. Kandla recorded prices of $85.00/t for SN500 and $61.50/t for SN150.
• For the barrel segment, N150 in Delhi was priced at $69.50/t, while SN150 and SN500 stood at $68.00/t and $90.00/t, respectively. N500 was available at $103.00/t, and BS-150 was priced at $118.00/t in Delhi.

Global Supply & Demand Shifts

• Crude oil futures, which had been on a downward trajectory due to global economic concerns, rebounded on Monday. Positive economic data from China and geopolitical tensions supported prices. 
• Crude oil demand prospects improved with China’s industrial production growing 5.9% in January-February 2025, surpassing market expectations of 5.3%. Additionally, China’s policy measures to stimulate consumption, stabilize financial markets, and boost wages contributed to improved market sentiment. 
• On the supply side, geopolitical factors remain influential. The U.S. reaffirmed its commitment to military operations against Houthi rebels, which could disrupt oil transportation in key trade routes, adding a risk premium to oil prices.
• In the base oil market, trading activity remained subdued as buyers adopted a wait-and-see approach, leading to soft pricing in some segments. Group I and Group II base oil supply remained sufficient to meet current demand levels, while limited supplies of Bright Stock kept prices steady.

Petroleum News and Industry Developments

• Russia has surpassed the United Arab Emirates as India's top naphtha supplier in the year to March 2025, as refiners capitalize on discounted cargoes.
• India's crude oil imports increased by 4.7 percent in February 2025, while petroleum product imports saw a 17.5 percent decline.
• Saudi Arabia and Kuwait’s share in India’s crude imports has declined, while Iraq and the UAE have gained ground.
• India’s crude oil imports in December 2024 fell by 10.6 percent year-on-year to $10.34 billion from $11.57 billion in December 2023, as supplies from Russia, Saudi Arabia, and Kuwait declined.
• Despite a decline in global crude oil prices, petrol and diesel rates in India have remained unchanged. The average price of imported crude oil has fallen to $71.20 per barrel, marking a 42-month low, yet domestic fuel prices have not reflected this drop.

Expert Market Insights & Future Outlook

• The crude oil market is expected to remain volatile, with prices influenced by China’s economic policies, geopolitical tensions, and central bank decisions on interest rates. While China’s stimulus efforts could support demand, uncertainties surrounding global economic growth and oil supply disruptions may create fluctuations.
• For base oils, pricing is likely to remain range-bound in the near term due to weak buyer sentiment and ample supply. However, any improvement in downstream lubricant demand or disruptions in feedstock availability could lend price support. Traders are expected to remain cautious, closely monitoring refinery run rates and macroeconomic indicators for further direction.a