Base Oil Prices Steady-to-Soft as Market Awaits Clarity on Tariffs and Crude

Key Highlights

• Base oil prices remain largely stable, with SN150 and 150N seeing marginal drops of$10/tonne.
• Bright Stock and Group III grades continue to see tight supply and firm pricing.
• Downstream demand stays weak, particularly in industrial and automotive sectors.
• Geopolitical risks and lower crude prices are pressuring overall market sentiment.

Petroleum Base Oil Price: Asia Base Oil Price Trends Across Groups

• Base oil prices across Asia remained steady to soft amid a sluggish trading environment, largely influenced by weak downstream demand and cautious sentiment surrounding economic and geopolitical developments.
• In Singapore, ex-tank Group I prices held largely stable: SN150 was assessed at $790-$830/tonne, SN500 remained firm at $1,040-$1,080/tonne, Bright Stock hovered at $1,370-$1,410/tonne.
• Group II ex-tank Singapore pricing also showed minimal fluctuations: 150N was heard at $840-$880/tonne, 500N at $1,080-$1,120/tonne.
• On an FOB Asia basis: Group I SN150 dipped by $10/ton to $650/-$690/tonne, SN500 was assessed at $910-$950/tonne, Bright Stock stayed strong at $1,230-$1,270/tonne, amid tight supply.
• Group II: 150N slipped $10/tonne to $690-$730/tonne due to growing inventories and subdued buying, 500N remained at $970-$1,010/tonne.
• Group III values remained steady: 4 cSt at $1,060-$1,100/tonne, 6 cSt at $1,070-$1,110/tonne, 8 cSt at $950/t-$990/tonne.
• Crude benchmarks were also soft, with Brent June 2025 futures flat at $65.73/bbl, significantly down from $74.01/bbl on March 31. Dubai front month crude for May settled at $65.28/bbl, also sharply lower from $74/bbl in late March.

Petroleum Demand and Supply: Regional Supply Constraints vs. Weak Demand

• The Asian base oil market continues to navigate through a mixed demand-supply scenario. While availability of certain base oil grades remains tight, particularly Bright Stock and Group III grades, overall trade volume was thin due to persistent downstream demand weakness.
• Key lubricant-consuming sectors such as automotive, industrial, and construction are still reeling under pressure from broader economic uncertainties, delaying restocking decisions. 
• Participants across the supply chain remain cautious, adopting a wait-and-watch approach. This has contributed to lengthening inventories for some Group II grades like 150N, especially in Northeast Asia.
• In contrast, tight Group I SN150 and Bright Stock supply, particularly for export out of Asia, helped support spot prices even as buyers hesitated to commit. The regional market is also being indirectly affected by scheduled and delayed turnarounds — notably, Bapco’s 45-day maintenance at its Group III plant in Sitra, Bahrain, originally planned for early April, has faced delays, further restricting availability in the premium segment.
• South Korea's exports to the U.S. have been less impacted due to base oils being categorized under energy commodities, making them exempt from recent tariff actions. This has helped maintain a steady export flow, especially for Group II and III products.

Petroleum Market News: Impact of Global Geopolitics and Tariff Developments

• The global base oil industry remains deeply entangled in evolving geopolitical risks and trade policy shifts, particularly surrounding U.S.-China relations.
• The U.S. has imposed new tariffs under the Trump administration, sparking retaliatory measures from China. This ongoing trade war has led to heightened transactional uncertainties between the two economies, which could have ripple effects throughout Asia, impacting investment, trade flows, and demand sentiment in commodity markets including base oils.
• Adding to the complexity, the U.S. has introduced new phased service fees on Chinese-operated or China-built vessels, set to begin from October 14, although specialized chemical tankers appear to be exempt. 
• While base oils themselves remain largely outside the scope of these new tariffs, the logistical and cost implications of these shipping rules could influence trade flows and costs in the near term.
• Another geopolitical development weighing on sentiment is the ongoing dialogue between the U.S. and Iran, which may pave the way for increased Iranian crude oil supply if a nuclear deal is reached. This could further depress crude oil prices, exerting a longer-term impact on base oil price structures.
• Meanwhile, OPEC+ remains on course to increase output by 411,000 barrels/day in May, reinforcing bearish pressure on global crude benchmarks and, by extension, energy-related commodities.

Expert Opinion and Strategic Buyer Sentiment

Market participants anticipate continued price stability in the short term, with supply tightness in select grades balancing the effects of subdued demand. Players are expected to remain cautious, closely monitoring geopolitical developments, especially the impact of U.S. tariffs and potential crude supply shifts, before making significant procurement decisions.