As October 2025 began, base oil prices in China were steady at a momentary respite from a largely downward-trending market signaled by a widening gap between supply and demand. The pressure eased for lighter grades due to seasonal demand for cold-weather lubricants, while heavier grades were pressured by sluggish consumption and stockpiling. Asian economic problems, exacerbated by U.S. tariffs on trade and manufacturing, further dampened the downstream lubricant demand for base oil. The drop in the feedstock crude oil prices during October 3, 2025, was influenced by Saudi Arabia and Russia, and discussing a 137,000 b/d production increase for November that doubles the October increase, which fuels oversupply fears. Golden Week festivities in China interrupt activity with base oil market activity dropping before inventories-taking profits. New deals are expected after the breaks but experts caution bearishness will remain with the tariffs and OPEC+ actions.
Key Highlights:
As October 2025 kicks off, China base oil prices have been stable, briefly holding firm in a falling market.
The base oil market in China was muted during the National Day holidays Golden Week from 1 to 8 October. Travelers, mostly citizens, are returning home to family or going to tourist attractions, bringing business to a halt in most industries. Domestic base oil prices in China came down before holidays, amid abundant supply and in anticipation that suppliers would want to reduce inventories going into the break.
The situation isn’t all that different in the rest of Asia where the appetite for high viscosity base oils such as bright stock is waning. Several consumers are stocking up on lighter grades for winter lubricants, and therefore not as urgent to purchase bright stock.
To add to these difficulties, Asia is rippling with economic uncertainties, worsened by the ripples of U.S. tariffs, which are curbing trade and manufacturing in the region. This has simultaneously affected the downstream lubricant demand.
Among factors influencing the base oil market is the recently falling feedstock crude oil futures on October 3, 2025, on the pronouncements by OPEC +. The nine-member group, Saudi Arabia, Russia and seven other member countries drafted to lead discussion in an on-line meeting, announcing a rise in crude production for November of 137,000 barrels per day the same increment of October. This resolution has increased worries of oversupply and put more pressure on the sustainability of base oil prices.
Because of additional supplies on the spot market from the U.S. and Europe Group I base oils buyers are holding back, delaying purchases and waiting for prices to fall further. This cautious attitude is making a more negative scenario with participants expecting stockpiles to rise as the market is quieting down.
Following ChemAnalyst, Looking forward, new deals for base oil could take place when market participants get back from holiday closure in the late October 2025. Analysts say that if leading indicators of global economic activity improve, or if the downstream lubricant demand recovers after the holidays, the market might stabilize. Yet they also could face an even more fragile economic climate, as continued tariff effects and possibly more OPEC+ supply hikes exacerbate the bearish sentiment.
