Lubricants Market Morning Report 20260513

Global Market Brief (Formal Petrochemical Official Website English Version)

I. Global Market Trends

Saudi Aramco warns: Strait of Hormuz deadlock may delay full global oil supply recovery until 2027

Saudi Aramco CEO Nasser warned that if blockades on the Strait of Hormuz persist beyond mid-June, global oil markets may not restore normal supply until 2027. This assessment dispels the previous market optimism that the supply disruption would only be a short-term shock.

Escalating US-Iran tensions push crude prices above $105/bbl

Heightened geopolitical risks between the US and Iran lifted international crude prices. WTI hovers around $101 per barrel, while Brent crude surged above $105 per barrel, hitting a multi-month high amid rising risk aversion across energy markets.

Middle East conflict triggers supply shock; Brent spikes to $118/bbl

Closure of the Strait of Hormuz caused severe supply disruptions, sending Brent crude to an intraday peak of $118 per barrel. Citi forecasts an average Q2 price of $110/bbl, with the full-year average ranging from $86 to $110 contingent on Middle East geopolitical developments.

OPEC+ to raise daily output by 206,000 barrels starting May; analysts deem move largely symbolic

OPEC+ agreed to lift crude production quotas by 206,000 barrels per day effective May. Analysts comment that amid current shipping outages in the Strait of Hormuz, the production hike carries more symbolic weight than practical impact and cannot offset existing supply shortages.

New energy vehicle penetration tops 60% in April, pressuring long-term gasoline demand

China’s new energy vehicle penetration exceeded 60% for the first time in April 2026. Industry institutions project annual gasoline consumption will drop to roughly 140 million tons with a sustained year-on-year decline, creating substitution pressure for the conventional automotive lubricant sector.

Trump proposes reopening the Strait of Hormuz; crude futures plunge 7.36% in a single day to $94.99

Trump put forward a proposal to reopen the Strait of Hormuz, easing market anxiety. Upon the news release, crude futures tumbled 7.36% to settle at $94.99 per barrel, resulting in drastically amplified volatility in energy prices.

II. Lubricant Industry News

China’s 2025 base oil capacity hits 16.72 million tons; import dependency keeps falling

In 2025, China’s lubricant base oil production capacity stood at 16.72 million tons per annum, output reached 8.774 million tons, and apparent consumption totaled 10.368 million tons. Imports fell 4.4% year-on-year to 1.4689 million tons, while exports jumped 26.8% to 217,100 tons, highlighting an obvious domestic substitution trend.

Multiple rounds of price hikes rolled out by Shell, Mobil, Fuchs and other mainstream brands; lubricant prices up 10%-20%

Geopolitical conflicts in the Middle East triggered global base oil shortages, leaving repair shops facing severe supply pressure and spiking costs. Leading brands including Fuchs, Shell and Mobil have implemented multiple rounds of price increases of 10%-20% for some products, testing supply chain management capabilities industry-wide.

API Group II/III base oils rapidly replace Group I; high-end upgrading becomes mainstream

Upgraded API classification standards drive the industry shift toward high-end feedstocks. Group II and Group III base oils are quickly phasing out Group I alternatives, while low-viscosity synthetic oils gain wider adoption in passenger vehicle and industrial applications. Technical indicators of domestic high-end base oils continue to improve.

III. South American Market

Latin American oil & gas output keeps climbing, projected to hit 8.8 million barrels per day in 2026

Brazil, Guyana, Suriname and other nations accelerate oil and gas development, pushing regional Latin American crude production above 8.8 million barrels per day in 2026. Brazil hit an all-time high daily output of 4.247 million barrels in March, with crude export revenue reaching USD 4.8 billion (up 70.4% YoY).

Argentina’s February crude output hits record 870,000 bpd; target set at 1 million bpd for 2026

Argentina’s daily crude production averaged 870,000 barrels in February, rising 15.9% YoY to a historic peak. Argentina’s Ministry of Energy plans to lift full-year daily output to 1 million barrels, launching incentive policies to attract international investment.

IV. African Market

IMF cuts Sub-Saharan Africa’s growth forecast to 4.3% amid Middle East conflict economic headwinds

The latest IMF report notes the Middle East war has dampened regional economic prospects, lowering the 2026 Sub-Saharan Africa GDP growth projection by 0.3 percentage points to 4.3%. Oil-importing nations face widening trade deficits, while oil exporters benefit from higher export revenues.

Wave of African LNG project restarts; East Africa emerges as new global energy supply hub

ExxonMobil lifted force majeure on Mozambique’s Rovuma LNG project; TotalEnergies resumed construction of its Mozambique LNG complex (target startup 2029); Eni received approval for the Coral Norte FLNG facility (first gas expected 2028). The regional East Africa LNG supply landscape is undergoing rapid reshaping.

V. Russian Market

Russia’s crude exports hit 3.66 million bpd, the highest level since the Ukraine conflict

Russia’s average daily crude shipments from its ports rose to 3.66 million barrels over the past four weeks, marking the highest volume since 2022. Weekly average export revenue reached approximately USD 2.5 billion, a post-conflict peak, with robust shipments of Urals crude sustained.

Russia’s sunflower oil export revenue surges 150% YoY; India ranks top buyer

Russia’s sunflower oil export revenue hit USD 805 million from Jan-Feb 2026, jumping 150% YoY. India, with purchases worth USD 397 million, is the largest importer; exports to China skyrocketed 320% to USD 50 million.

VI. South Asian Market

India’s FY2026 auto sales reach 4.7 million units; conventional fuel vehicles remain dominant

India’s passenger vehicle sales totaled 4.705 million units in FY2026 (+8.4% YoY). Gasoline vehicles account for 47.48% of sales, diesel vehicles 18.08%, hybrids 8.21%, and pure EVs merely 4.25%. Conventional fuel cars still dominate the market, supporting resilient lubricant demand.

VII. Malaysian Market (Marine Lubricants Focus)

Malaysia to unveil petroleum supply stability plan to counter Strait of Hormuz crisis

Amid Iran tensions and Hormuz shipping blockades, Malaysia’s Prime Minister will release a petroleum supply guarantee contingency plan to secure sufficient domestic inventories. April fuel subsidy expenditures are projected to hit 7 billion ringgit (around USD 1.8 billion), roughly ten times pre-conflict levels.

Malaysia’s southwest monsoon commences May 14; maritime authorities crack down on diesel smuggling

Malaysia Meteorological Department forecasts the southwest monsoon will start May 14 and last until September. Meanwhile, Penang maritime law enforcement seized two vessels suspected of illegal diesel transfers, detaining approximately 800,000 liters of fuel and arresting 22 crew members amid stricter regulatory oversight.

VIII. Lubricant Popular Science for Customers

Key takeaway: Higher Viscosity Index delivers superior lubricant performance

The Viscosity Index (VI) quantifies a lubricant’s viscosity stability under temperature fluctuations. A higher VI means the oil thickens less in cold conditions and thins less at high temperatures. For example, 0W-40 boasts a higher VI than 5W-30, enabling easier cold startup and stable protective oil films under high heat. Selecting an appropriate Viscosity Index is the primary step to choosing suitable lubricants.

[Customer-Friendly Popular Science Section]

API SP vs SN Plus: Full breakdown of core performance upgrades

Launched by the American Petroleum Institute in May 2020, API SP is the latest gasoline engine oil standard, with three major improvements over SN Plus:

1. Enhanced protection against Low-Speed Pre-Ignition (LSPI)

2. Optimized shielding for turbochargers

3. Improved control over high-temperature deposits

API SP is recommended for all new vehicles, especially those equipped with turbocharged engines.

[Sales Technical Training Material]

IX. Technical Highlights (Industrial Lubrication Applications)

Centralized Lubrication System: Core Guarantee for Reliable Industrial Equipment Operation

An automatic centralized lubrication system delivers precise, timed doses of grease and oil to all equipment lubrication points, a core technology ensuring long-term stable operation of industrial machinery. Compared with manual greasing, automatic lubrication reduces bearing failure rates by 80% and minimizes production downtime. Widely applied in heavy-load scenarios including mining machinery, construction equipment and port installations, it is ideal for high-temperature, dusty, continuously running machinery with hard-to-access lubrication points.

Breakthroughs in Deepwater Lubrication Technology: Challenges & Solutions for Offshore Platform Equipment

Accelerated global deepwater oil & gas development exposes offshore equipment to extreme conditions including high pressure, low temperature and seawater corrosion. Modern deepwater lubrication solutions adopt corrosion-resistant coated bearings and synthetic base oils paired with seawater-resistant additive packages, capable of withstanding pressures at depths up to 3,000 meters. Companies including Shell and Eni deploy customized lubrication formulas for deepwater projects, drastically extending equipment service life and cutting maintenance frequency.