White oil prices showed diverging trends in major markets during May 2025, with China recording a steady growth trend and the U.S. witnessing a spike before correction and eventual stabilization. Regional market behaviour in both areas exhibited a dynamic interaction between feedstock price volatility, end-user industry demand volatility, and deeper macroeconomic and geopolitical factors.

In China, white oil prices commenced the month on a firm footing, indicating a well-balanced supply-demand situation. Despite seasonal patterns generally driving consumption within the lubricant segments, market action was subdued in the face of continued macroeconomic uncertainty and trade headwinds. High inventory positions, especially in the lubricant segment, deterred aggressive restocking, while continued tensions between the U.S. and China and high logistics costs further weakened buying interest.

However, as the month progressed, white oil prices turned higher, fuelled by a mix of increasing feedstock costs and a cautious post-holiday demand recovery. Manufacturers raised white oil offers to preserve margins because of mid-month increases in the price of crude oil, which increased production expenses.

While the increase in demand was mostly restocking-related, improving mood from resumed Sino-U.S. trade talks and picking up export activity— as overseas buyers accelerated their purchases ahead of the upcoming Dragon Boat Festival, expecting possible delays caused by holiday-related factory shutdowns—propelled the bullish turn for white oil prices.

Conversely, the U.S. white oil market followed a more volatile path. Prices rose in early May on the heels of tighter global crude stocks and geopolitical threats, driving up production costs. Expectations for firmer seasonally driven demand prior to Memorial Day also spurred buying interest, specifically from the personal care sector.

However, a change occurred in the middle of the month, as white oil prices fell by 0.7%, undoing earlier gains. Softening downstream demand and declining feedstock costs were major causes of this decline. Crude stockpiles fell by 2.8 million barrels, according to EIA data, but the market was still pessimistic because of steady domestic production and lower refinery run rates.

Although demand for summer formulations usually increases in late spring, several manufacturers had already built-up inventories in May, which resulted in less purchasing activity. As market players adjusted their positions considering plentiful supply and moderate demand, white oil prices stabilised at the end of the month.

In the future, the white oil market is expected to remain cautious across both China and the U.S. In China, prices are likely to remain firm if feedstock prices are high and export momentum sustains. But ongoing recovery in demand will be essential for further increases. In the U.S., steady crude production and lacklustre downstream appetite might keep prices in check in the near term.