Base oil prices in the UAE have stayed constant throughout April 2025, owing to constant market attitudes. Both grades of base oil, Group I, and Group II, showed no changes during this month.

According to ChemAnalyst, base oil prices in the UAE are likely to fall in May 2025 following the UK government's implementation of anti-dumping taxes on imported finished lubricants, notably downstream engine oil and hydraulic fluids from the UAE.

These taxes, set at 59.40% for the majority of UAE exports, are projected to severely restrict the number of downstream products carried to the UK. As a result, UAE-based lubricant firms that previously relied on the UK market may face an oversupply of finished lubricants domestically.

The possible excess of engine oils and hydraulic fluids in the UAE is expected to put downward pressure on the cost of these finished products. According to ChemAnalyst, the downward pressure on finished lubricant pricing is projected to transfer into reduced demand and, as a result, lower base oil prices in the UAE market in May 2025.

According to a recent estimate, base oil prices in the UAE have remained constant during April 2025. On the supply side, Luberef's Group I and Group II plants in Yanbu, Saudi Arabia, will be shut down for maintenance at the start of the second quarter, and spot sales will be limited to build stockpiles before the shutdown. Furthermore, rising Israeli-Hezbollah and Israeli-Hamas hostilities resulted in Houthi attacks on Iran-linked ships in the Bab-al-Mandeb, endangering marine traffic and creating fears about supply chain disruptions from Saudi Arabia, particularly base oil.

Despite increased pressure from limited availability caused by several refinery turnarounds in Saudi Arabia and continued shipping delays in the Middle East, imported base oil prices in the UAE have remained stable. The end of Ramadan and the accompanying start of the Eid-al-Fitr vacation in Islamic nations throughout the Middle East and abroad appear to reduce demand for base oil in the downstream lubricant business. With little market activity, demand for downstream lubricants decreased significantly.

Furthermore, according to the report, feedstock oil prices have fallen by 5.8%, putting crude oil at its largest monthly decrease since 2021. Adding to the downward pressure were reports suggesting that the OPEC+ alliance could consider increasing oil output in June. This would exacerbate existing supply levels, further weighing on prices. This drop has reduced Saudi Arabia's base oil manufacturing costs, offsetting severe supply pressures. Saudi producers have since adopted a rollover policy, causing import UAE prices to remain steady over this duration.