Lubricants Market Morning Report 20260519

Global Market Brief (Formal English for Petrochemical Official Websites)

I. Global Market Trends

US-Iran negotiations deadlock; Brent settles at $109.26/bbl, up 7.87% week-on-week

For the week ending May 15, front-month Brent crude futures closed at $109.26 per barrel (+7.87%), WTI at $105.42 per barrel (+10.48%), and Russian ESPO spot crude at $96.44 per barrel (+4.01%). Iran rejected the U.S. proposal, demanding war reparations and official recognition of its sovereignty over the Strait of Hormuz.

Brent surges 2% to intraday peak of $111.48 on May 18

During Asian trading hours on May 18, Brent crude futures rose by 2% to hit $111.48 per barrel, while WTI climbed 2.36% to $103.41 per barrel. However, prices retreated sharply late in the session, with WTI sliding 2% to $103.11 and Brent falling back to $105 per barrel.

Crude futures jump sharply at close on May 19; WTI gains 3.07% to $108.66

On May 19, June WTI crude futures rose 3.07% to settle at $108.66 per barrel, and July Brent crude futures increased 2.6% to $112.1 per barrel. The U.S. Treasury Secretary announced a further 30-day extension to sanctions waivers for Russian oil, easing market sentiment.

Domestic refined oil price adjustment on May 21 likely suspended, projected cut narrowed to RMB 10/ton

As of the 7th working day on May 18, the cycle average crude price stood at $102.42 per barrel with a price change rate of -0.65%. Gasoline and diesel are expected to decrease merely RMB 10 per ton, far below the RMB 50 threshold triggering price adjustment, so the May 21 revision will most likely be suspended.

EIA cuts 2026 global oil demand forecast to 104.2 million barrels per day

The EIA Monthly Outlook downgraded the 2026 global oil demand forecast from 104.6 million bpd to 104.2 million bpd, and trimmed the global production projection from 104.3 million bpd to 101.6 million bpd, widening the supply-demand gap.

II. Lubricant Industry News

Uni-President Lubricants ensures uninterrupted supply of CI-4 / CK-4 and premium SQ-grade products

The industry has faced sustained supply chain pressure since April 2026 amid soaring base oil prices, rendering low-viscosity high-performance engine oils scarce. Uni-President Lubricants prioritizes stable production of CI-4 and CK-4 commercial vehicle lubricants, as well as premium passenger car oils including SQ and Titanium Energy series to avoid market shortages.

Lubricant sector enters another price hike cycle; Mobil, Shell, Castrol, Uni-President and Great Wall raise prices by 5%-10%

Disrupted crude supplies triggered by Middle East geopolitical tensions prompted the EIA to revise its global oil market outlook. Domestic and international mainstream brands including Mobil, Shell, Castrol, Uni-President and Great Wall successively rolled out price adjustments, with 5%-10% hikes for selected automotive and industrial lubricants.

Hidden reshuffle underway for lubricant OEM model in 2026 amid three major headwinds

Three simultaneous pressures reshape the contract manufacturing landscape: booming new energy penetration (high technical barriers for hybrid-specific oils), stricter upgraded standards (next-gen API SP specifications and ACEA 2025 norms), and fragmented distribution channels (more niche brands with smaller individual sales volumes. Only OEM factories with flexible production capacity can survive; manufacturers lacking independent R&D capabilities are forced into cutthroat price competition.

III. South American Market

Global crude supply center shifts westward rapidly; South American producers poised to ramp up output

The U.S.-Iran conflict reshapes the global energy supply landscape. The U.S. deepens partnerships with Venezuela, Argentina and Brazil, driving accelerated production growth across South America. Trump stated the U.S. receives 'hundreds of millions of barrels of oil' from Venezuela for refining in Houston. The UAE’s withdrawal from OPEC further weakens the bloc’s influence, shifting market share to the Americas.

IV. African Market

India expands crude purchases from Africa; Angola, Gabon and Ghana emerge as alternative suppliers

With Russian oil waivers set to expire, India is forced to seek alternative feedstock and boost crude imports from African nations including Angola, Gabon and Ghana. However, African crude currently accounts for a minimal share of India’s total imports and cannot offset lost Russian supply in the short term.

V. Russian Market

U.S. Treasury extends seaborne Russian oil sanctions waiver for another 30 days

On May 18, U.S. Treasury Secretary Bessent announced an additional 30-day waiver for expired sanctions on seaborne Russian crude shipments, designed to enable 'the most vulnerable nations' to access stranded Russian oil at sea and add flexibility to spot markets.

Global crude prices surge upon Russian oil waiver expiry; analysts warn Brent may break $130

The U.S. Treasury let critical Russian oil sanctions waivers lapse on May 16. Combined with the Strait of Hormuz blockade and a global daily supply loss exceeding 1.4 million barrels, oil market tightness intensified. Analysts issued a warning that Brent crude could surge above $130 in the short run.

VI. South Asian Market

India’s May Russian crude imports hit record 2.3 million bpd; Urals average price jumps 19% to $112.3 in April

Kpler data shows India imported a record 2.3 million barrels of Russian crude per day in May, accounting for nearly 50% of its total crude intake. Yet the average price of Russian Urals crude rose 19% month-on-month to $112.3 per barrel in April, drastically inflating import costs. Indian officials commented the country 'will continue purchasing Russian oil with or without the U.S. waiver'.

India faces oil shortage crisis; strategic reserves cover merely 6 days of consumption

India relies on imports for 91% of its crude demand, with strategic petroleum reserves only sufficient for 9.5 days of consumption — far below the IEA’s 90-day safety threshold. A full termination of Russian oil waivers combined with prolonged Hormuz blockades would create severe energy supply risks for its 1.4 billion population.

VII. Malaysian Market (Marine Lubricants Focus)

Domestic marine fuel oil prices stabilize; mainstream IFO 180 quoted at RMB 4,700–4,900/ton

Domestic marine fuel oil prices stabilized overall in mid-to-late April. IFO 180 marine fuel oil was quoted at RMB 4,700–4,900 per ton in Shandong, while IFO 120 stood at RMB 4,600–4,800 per ton. The shipping sector remains subdued with weak bunkering demand; fuel suppliers continue destocking and adopt a wait-and-see stance. Geopolitical tensions in the Strait of Hormuz still place upward pressure on international marine fuel prices.

VIII. Lubricant Popular Science for Customers

Why are fully synthetic engine oils pricier than mineral oils, and are they cost-effective?

Fully synthetic oils adopt PAO or ester base stocks with neat, uniformly sized molecular structures. Mineral oils are residual distillate fractions of crude oil featuring irregularly sized molecules.

Core advantages of synthetics: superior high-temperature stability (minimal coking), outstanding low-temperature fluidity (pumpable at -40℃), and drain intervals 2–3 times longer than mineral oils.

Customer cost calculation tip: Synthetic oil costs 50% more upfront yet delivers triple mileage, cutting per-kilometer running expenses overall.

[Customer-Oriented Popular Science]

Online lubricant monitoring: paradigm shift from scheduled oil changes to condition-based oil changes

Conventional practice: Fixed-mileage or fixed-time oil replacement, overly conservative and wasteful.

Online monitoring solution: Sensors measuring electrical conductivity, dielectric constant and temperature compensation track real-time oil conditions, with data uploaded to cloud platforms for AI-driven oil change judgment.

Core benefits:

1. Eliminate waste from premature oil drains (extend service intervals by 30%-50%);

2. Detect abnormal equipment wear in advance to prevent breakdowns;

3. Remote multi-point monitoring for centralized asset management.

Uni-President Runzhibo achieves service response latency under 200ms and an over-sell ratio below 0.01%.

[Sales & Technical Training Material]

IX. Technical Highlights (Tuesday: Base Stocks & Additives)

Global industrial lubricant market exceeds RMB 450 billion in 2026; high-end products register 14.3% compound growth

The global industrial lubricant market surpassed RMB 450 billion in 2026, with China’s annual consumption hitting 12 million tons and an 8.7% growth rate leading worldwide.

Demand breakdown: Hydraulic oils 38%, gear oils 22%, slideway oils 12%.

High-end industrial lubricants achieve 14.3% compound annual growth; procurement decisions shift from 'lowest upfront cost' to 'total cost of ownership (TCO) optimization'.

3rd National Lubricant Innovation & Development Conference: 80% high-end additives rely on imports, core bottleneck unresolved

Industry consensus reached at the Tianjin conference: Over-reliance on imported high-end additives (80% import penetration) remains the core industrial pain point.

Three key breakthrough directions:

1. Zhuhai Shunyi business model (product + integrated service solution boosts customer stickiness 3–5 times and profit margins by over 20%);

2. Independent R&D of hybrid vehicle-specific oil formulations for new energy vehicles;

3. Domestic substitution of base oils plus AI-aided formula development technology.