For the Quarter Ending March 2025
North America
During the first quarter of 2025, the U.S. base oil prices remained relatively stable, supported by a careful balance of supply and demand. At the start of January 2025, domestic supply was generally sufficient due to increased export activity by U.S. producers, but certain grades became tight because of production cutbacks aimed at avoiding an oversupply situation.
However, February 2025 saw a slight uptick in demand, particularly from the lubricants sector, as manufacturers prepared for the spring production season. This, combined with planned plant maintenance and unexpected disruptions at key facilities, tightened supply further. Despite low crude oil costs helping to reduce production expenses, concerns over future supply and tariffs led to a modest market rebound by late February.
March brought additional supply challenges in the base oil market with a force majeure declared by two major producers due to severe weather. Another refinery remained offline for scheduled maintenance, further straining availability during this timeframe. Demand continued to climb, driven by seasonal lubricant needs and rising vehicle sales, though market sentiment was tempered by caution over new tariffs on imports from Canada, Mexico, and China.
APAC
In the first quarter of 2025, the base oil prices in Indonesia remained largely stable with a marginal uptick. At the start of January, market activity was subdued as many participants paused operations due to year-end holidays. However, some suppliers began building inventories in anticipation of the Lunar New Year and possible disruptions. These pre-holiday stockpiling efforts helped maintain a balanced market even as certain base oil grades from China faced tightness due to planned plant shutdowns and permanent closures. The Indonesian Pertamina plant in Cilacap was offline for much of February, adding to the supply strain. Despite these challenges, declining feedstock crude oil prices and lower intra-Asia freight costs helped ease upward pressure on prices, allowing the market to remain steady. By March, while actual demand from lubricants and automotive sectors stayed low, tight spot availability and planned maintenance spurred buyers to secure volumes early, creating artificial demand. This cautious yet proactive buying behavior kept the market balanced. Overall, countering forces of limited supply and weak demand helped maintain stability in Indonesia’s base oil market to settle base oil prices at USD 1127/Base Oil II H 500 CFR Tanjung Priok during the concluding week of March 2025.
Europe
The first quarter of 2025 in the European Base Oil prices has been characterized by a declining trend. Quarterly, base oil prices in Germany have declined by 6% as compared to the fourth quarter of 2024. While crude oil prices were relatively high at the start of the year, the overall market for base oils was weak. Demand was particularly low during the year-end holidays and remained subdued well into the first quarter. This was largely due to limited activity in the automotive and lubricant sectors, as well as broader economic uncertainty across Europe. As February 2025 began, Group I base oils were generally available which declined the price trend. Demand from the downstream lubricant sector remained soft as automotive sector performance was underwhelming, with falling vehicle sales and uncertainty caused by potential tariff hikes. However, by March, the base oil prices maintained their stable outlook. Buyers were cautious, making smaller purchases rather than building up large inventories. Although some supply disruptions were expected in April due to upcoming refinery maintenance, the overall availability was still sufficient in March to meet market needs.
MEA
Throughout the first quarter of 2025, base oil prices in the Middle East remained mostly stable despite facing several regional and global pressures. The market showed resilience even as geopolitical tensions flared across the Middle East, particularly due to disruptions in the Red Sea and ongoing conflicts involving Israel, Yemen, and Iran. These tensions caused supply chain challenges, including increased shipping costs and longer routes, yet base oil deliveries continued steadily to UAE ports like Fujairah, Sharjah, and Dubai. The supply of base oils remained relatively balanced. This consistency in supply, combined with softened crude oil prices in February 2025, kept manufacturing costs in check and helped maintain stable base oil prices. Demand, however, remained subdued through most of the quarter. Orders were slow during the holiday season and stayed low into the early months of the year. Uncertainty around potential tariffs and continued regional instability also made buyers hesitant. The downstream lubricant and automotive sectors, key consumers of base oils, experienced weak performance, contributing to the sluggish demand. By March, demand from the downstream lubricant sector was tempered by cautious buying due to the Ramadan festival which further kept the base oil prices stable in the UAE.
For the Quarter Ending December 2024
North America
Throughout Q4 2024, the North American Base oil market showcased stability with a marginal drop. While as compared to the third quarter of 2024 the base oil prices has declined by 1% on the back of low demand from the downstream lubricants sector.
During October 2024, suppliers had sufficient inventories that they had built up in anticipation of the hurricane season, hoping to secure more favorable pricing when they eventually released these barrels. Furthermore, the year-long demand for base oils has been somewhat weak, and the recent price reductions have not much increased sales.
With the devastation wrought by hurricanes in Florida and other coastal regions, base oil producers have grown more cautious, reducing spot market sales to assure enough supply through October and November which kept the pricing dynamics stable. Moreover, the destocking affect has begun in December to avoid tax implications at the end of the year which affected the market sentiments of Base oil prices to showcase a decline.
APAC
The fourth quarter of 2024 for Base Oil in the APAC region has been characterized by decreasing prices, influenced by several key factors. Despite plant shutdowns, the availability of most base oil grades was deemed adequate in October 2024 due to sluggish lubricant consumption in the region. Following the National Day holidays in early October, market activity in China witnessed a slight revival as some buyers returned to replenish their stocks. However, uncertainties surrounding imports prompted many consumers to opt for domestic products. Henceforth, the availability of plentiful domestic supplies at competitive prices further incentivized buyers to prioritize domestic sources which supported the downtrend during this timeframe. Moreover, the continuous decline in the feedstock Crude oil prices in November has declined the manufacturing costs. The market dynamics has shifted towards bearishness as most of the base oil producers have ample availability which delays the stock level purchases. Moreover, as the December begins to end, both imports and domestic suppliers looking to de-stock as the demand from the downstream lubricants sector remained weak, influenced by seasonality amid market players aiming to reduce stock levels toward the year end.
Europe
The fourth quarter of 2024 in the European Base Oil market has been characterized by declining trend followed by stability. In October, the Germany base oil market has remained relatively stable. Numerous disruptions, including extreme rainfall in Europe hampered export levels. While disruptions have impacted certain aspects of the market, overall availability has remained sufficient to meet demand amid businesses have adjusted their operations to mitigate the impact of supply chain disruptions. However, in November, base oil prices has declined post ExxonMobil's timely inventory release has helped to alleviate supply tensions and kept the market supply sufficient to cater to the low demand from the downstream lubricant industry. Moreover, the continuous decline in the feedstock Crude oil prices has declined the manufacturing costs. Several suppliers reduced their posted prices in December to clear inventories before the year-end. As the year draws to a close, many operations within the European region are planning extended breaks during the Christmas and New Year holiday period.
MEA
The Middle East base oil market experienced a dynamic fourth quarter in 2024, characterized by a period of decline followed by a period of stability. In October, the Saudi Arabian base oil market displayed a relatively stable trajectory. While disruptions, such as conflicts in the Middle East, impacted export levels, overall base oil availability remained sufficient to meet market demand. Businesses within the region effectively adapted their operations to mitigate the impact of supply chain disruptions. However, in November, a notable decline in base oil prices emerged. This downward trend was primarily attributed to adequate supply to cater to the subdued demand from the downstream lubricant industry. Furthermore, the continuous decline in feedstock crude oil prices led to a reduction in manufacturing costs, further contributing to the downward price pressure. In December, several base oil suppliers proactively reduced their posted prices to clear existing inventories before the year-end. As the year drew to a close, many operations within Middle East regions planned extended breaks during the Christmas and New Year holiday period, further impacting market activity.
For the Quarter Ending September 2024
North America
Throughout Q3 2024, the North American Base Oil market exhibited stability, with prices remaining relatively unchanged. Though prices remained stable initially, base oil demand saw an uptick in July, prompting suppliers to tap into their backup reserves. A key driver of stability was the balanced-to-tight supply conditions across most base stock categories as production levels were keeping pace with the current demand which prevented any major price spikes during this timeframe.
Moreover, inventory building in anticipation of hurricane season and unexpected production outages contributed to a tight supply situation for base oils in July. However, after witnessing immense stability, the US base oil market witnessed a marginal decline in prices in September 2024, primarily driven by lower demand from the downstream lubricants market. This price reduction was initiated by Motiva, followed by similar moves from other suppliers like Excel Paralubes, SK Enmove, Chevron, and Calumet declined the trend.
The overall trend in the third quarter remained stable, reflecting a resilient market amidst various challenges. As Q3 ended, the price of Base Oil Group I SN 150 FOB Texas in the USA stood at USD 17013/MT, underscoring the prevailing stability in the market.
APAC
The third quarter of 2024 for Base Oil in the APAC region has been characterized by decreasing prices, influenced by several key factors. Market dynamics were primarily impacted by oversupply conditions, as production rates remained high while demand softened from the downstream lubricant industry due to the off-season. This imbalance led to a surplus of base oils, putting downward pressure on prices. Seasonal patterns also played a role, with reduced buying activity due to the monsoon season affecting demand. Additionally, logistical challenges such as port congestion made imported base oil less appealing, further contributing to the decline in prices. Additionally, local base oils were more affordable than imports, allowing domestic consumers to meet many of their needs. This resulted in a cautious stance from purchasers, which in turn reduced demand for additional base oil cargoes. The overall trend in the Singapore region mirrored the negative sentiment, with prices declining by 1% compared to the previous quarter in 2024. The quarter-ending price for Base Oil I SN 150 Ex Jurong in Singapore stood at USD 873/MT, reflecting the prevailing downward pricing environment in the region.
Europe
The third quarter of 2024 in the European Base Oil market has been characterized by stability in prices. While base oil prices in Europe including the Netherlands remained stable during July 2024, the overall market remained surprisingly high for this time of year due to ongoing supply constraints. High shipping costs resulting from the Hamburg port strike and the Red Sea issues, particularly for exports to Europe face a significant lack of API Group I base oils. The European base oil market in the Netherlands has entered a period of relative calm, with prices holding steady amid a backdrop of seasonal slowdown and improving supply conditions. The traditional summer lull has seen a decline in market activity as industry participants take advantage of the holiday period to recharge. While the conflicts have disrupted supply chains and forced some businesses to adapt their operations, the market has shown resilience in September. The quarter has seen a balanced supply-demand dynamic, with restored supplies and lower feedstock Crude oil costs during September contributing to the overall stability. Ending the quarter at USD 1061/MT for Base Oil I SN 150 FD in Rotterdam, Netherlands, the market has maintained a consistent stable sentiment throughout the period.
MEA
The Base Oil market in the MEA region for Q3 2024 has been characterized by stability, with prices admitted to an uptrend during July. Supply constraints due to ongoing shipping issues and disruptions in traditional shipping routes have played a significant role in maintaining a hike during July 2024. High feedstock Crude oil costs, logistical challenges, and strong demand for finished lubricants have also contributed to the bullish pricing environment in the region. Fewer vessels were willing to operate in the Red Sea due to safety risks. This shortage drives up shipping costs for those who venture into the region. However, a deceleration in summer slowdown during August offset the uptrend trend and maintained stability during this period. In Saudi Arabia specifically, the 18% increase from the same quarter last year indicates a positive trend in pricing, while the 5% increase from the previous quarter underscores the continued stability in the market. The quarter-ending price of USD 1735/MT for Base Oil Group-III 4cSt FOB Dammam in Saudi Arabia reflects the overall stable sentiment in the market during Q3 2024.
For the Quarter Ending June 2024
North America
Q2 2024 has been a dynamic period for Base Oil pricing in the North American region, characterized by a significant upward trajectory. The primary driver has been the consistent rise in crude oil prices, which serve as the feedstock for Base Oil production. Concurrently, global geopolitical tensions and resultant supply chain disruptions have exacerbated the situation, pushing up production costs. Refiners have also prioritized Base Oil output in response to competitive pressures from other fuels, leading to a 30% year-over-year surge in production.
During April 2024, several refiners including Safety Kleen and Avista Oil disclosed new markups in the paraffinic market, while Ergon, Process Oils, and San Joaquin Refining declared price hikes in the naphthenic market. ExxonMobil, HollyFrontier, Calumet, Motiva, and Paulsboro also announced the same to encounter the profit margins which resulted in a bullish market trend.
Seasonality played a crucial role, with participants stockpiling inventories ahead of the hurricane season and the summer driving surge. This proactive behavior indicated strong future demand, further solidifying the price rise. From the previous quarter in 2024, prices rose by 8%, reflecting a consistent upward momentum. Concluding this quarter, the price of Base Oil Group I SN 150 FOB Texas stood at USD 1715/MT, signifying a positive pricing environment.
APAC
In Q2 2024, the Base Oil market in the APAC region experienced a notable upward trajectory in pricing, influenced by several critical factors. Firstly, supply constraints due to maintenance shutdowns and operational disruptions in key production facilities significantly tightened the market. Secondly, heightened demand from downstream industries, particularly automotive and manufacturing, compounded the supply shortages, leading to increased competition and bid prices among buyers. Moreover, geopolitical tensions and logistical challenges further exacerbated the supply-demand imbalance, contributing to the bullish pricing environment. Focusing on China, which has witnessed the most substantial price changes, the overall market trend has been markedly positive. This, coupled with a shift towards more cautious purchasing behavior which sustained the upward price momentum. From the previous quarter in 2024, prices increased by 2%, indicating a steady climb throughout the year. The quarter concluded with the price of Base Oil l SN 150 FOB Qingdao standing at USD 810/MT. This increment in prices highlights a generally positive pricing environment, driven by robust demand and constrained supply.
Europe
Germany, experiencing the most pronounced price changes during the second quarter, from bearishness toward bullishness. While the overall trend was upward, the market also saw stabilization factors, including increased imports and local production resumption. In April 2024, Base oil activities remained muted due to the Easter holidays. Coinciding with the Ramadan festivities, many businesses across Europe opted to close their doors. This led to a significant decrease in trading activity, which declined the trend. However, during May 2024, the price trajectory in Germany reflected a combination of heightened operational costs and supply shortages. Seasonal shifts, such as the summer driving season, increased demand for lubricants, further influencing high prices during June 2024. Comparatively, prices in Q2 2024 were down by 1% from the same quarter last year, indicative of the market's slight contraction. However, within Q2, the second half saw a 6% price increase compared to the first half, driven by tightening supply and rising operational costs. Overall, the pricing environment in Q2 2024 was predominantly positive, characterized by supply constraints, increased logistics costs, and seasonal demand spikes, which collectively fostered a landscape of escalating prices despite some stabilizing influences.
MEA
The second quarter of 2024 has witnessed a pronounced increase in Base Oil prices across the Middle East region. This incline was driven by a confluence of factors, including a rising of freight rates, a supply shortage post-Ramadan amidst halted cargos and an overall rising demand arising from economic uncertainties and geopolitical tensions. The Saudi Arabia, in particular, experienced the most significant price adjustments. Post-Ramadan resurgence, base oil trading activity has picked up across the Middle East, particularly after the Eid al-Fitr holiday. This traditional buying period sees lubricant blenders replenish stocks to meet the growing rises in finished lubricant sales during April. Buyers were willing to pay more to secure the base oil they needed to meet lubricant production demands. Moreover, Luberef, a major player in the region has faced challenges securing vessels, impacting deliveries of Group I and II base oils typically sourced from Yanbu and Jeddah. Meanwhile, Base oil supplies remained under pressure in Saudi Arabia due to the ongoing shipping attacks. Attacks by Houthi rebels in the Red Sea were forcing ships to take longer routes around the Cape of Good Hope, impacting delivery times and availability.
