Lubricants Market Morning Report 20260521

Market Brief (Official Website Standard English Version)

I. Global Market Updates

May 20 Closing: Oil prices plunge sharply! WTI down 5.66% at $98.26, Brent down 5.63% at $105.02

International crude futures closed sharply down by over 5.5% on May 20. July WTI crude fell $5.89 (-5.66%) to settle at $98.26 per barrel; July Brent crude dropped $6.26 (-5.63%) to $105.02 per barrel.

Core driver: Trump stated U.S.-Iran negotiations have entered the 'final stage'. Markets expect the Strait of Hormuz to resume full vessel transit, triggering a rapid unwind of geopolitical risk premiums.

May 21 Asian Session: Oil prices stabilize and rebound, WTI up 1% at $99.25

During May 21 Asian trading hours, WTI crude rose 1% to $99.25 per barrel, and Brent climbed 1% to $106.38 per barrel. Markets digested bullish negotiation signals following the sharp crash, yet no formal timeline for full transit recovery has been released, keeping crude prices range-bound and volatile.

U.S. stock market surges! Dow Jones reclaims 50,000 points; crude oil and U.S. Treasury yields slump together

The crude selloff fueled a strong rally in U.S. equities: the Dow Jones Industrial Average jumped 645 points (+1.31%) to break back above 50,000, the Nasdaq Composite rose 1.54%, and the S&P 500 gained 1.08%. The 10-year U.S. Treasury yield fell more than 8 basis points.

Minutes from the Federal Reserve meeting showed most officials stood ready to hike rates if inflation stays above 2%, yet falling energy prices eased near-term inflation expectations.

Domestic fuel price adjustment tonight (May 21), expected to rise RMB 90–110/ton

The domestic refined oil price adjustment window opens at 24:00 on May 21. The crude oil price change rate stands at 1.94%–2.01% this cycle, far exceeding the RMB 50/ton adjustment threshold. Gasoline and diesel prices are projected to rise RMB 90–110 per ton (approx. RMB 0.09 per liter).

Note: This calculation is based on average cycle prices; the May 20 crude crash will be reflected in the next pricing cycle (adjustment date June 5).

Two supertankers carrying 4 million barrels of crude exit the Strait of Hormuz, first time in over a month

Shipping data from London Stock Exchange Group and Kpler shows two supertankers loaded with 4 million barrels of Middle Eastern crude sailed out of the Strait of Hormuz on May 20 after being stranded in the Gulf for more than two months.

Iran’s Revolutionary Guard stated 26 vessels passed through the strait under coordinated arrangements in the past 24 hours, delivering stronger signals of improved shipping throughput.

II. Lubricant Industry News

Fuel price hike imminent on May 21; nine adjustments in 2026: seven hikes, one cut, one suspension, total up nearly RMB 2 per liter

Domestic oil prices have undergone nine rounds of adjustments in 2026. Gasoline prices have risen cumulatively by RMB 2,505 per ton (approx. RMB 1.98 per liter), while diesel is up RMB 2,415 per ton (approx. RMB 2.05 per liter). If the May 21 price increase takes effect, it will mark the eighth hike of the year.

No.92 gasoline retails at RMB 8.72/liter in Beijing, No.95 at RMB 9.28/liter, with No.95 breaking RMB 9.5 per liter in some cities.

Uni Lubricants changes control: Cinda-backed entities plan to transfer 28.09% equity, stock hits daily limit May 19

Shenzhen Construction Investment (controlling shareholder of Uni Lubricants) and China Cinda plan to publicly solicit transferees for a 28.09% equity stake. Driven by positive restructuring expectations, the stock opened and closed at the 10% daily limit on May 19 at RMB 19.98/share.

Uni Lubricants has invested heavily in liquid cooling segments in recent years, and the ownership reshuffle may reshape industry competition patterns. Separately, Shell posted adjusted Q1 net profit of USD 6.9 billion, doubling quarter-on-quarter.

III. South American Market

Global crude supply shifts west; U.S. deepens ties with Latin American oil producers

Middle East tensions have accelerated restructuring of global crude supply flows. Trump confirmed the U.S. is receiving 'hundreds of millions of barrels of Venezuelan crude' for refining in Houston.

The EIA forecasts Venezuela’s output will recover to pre-sanction levels of 1.1–1.2 million barrels per day by mid-2026; Mexico has agreed to supply crude to Japan to ease supply tightness stemming from Iran conflicts. Total Latin American oil output is projected to hit 8.8 million barrels per day in 2026.

IV. African Market

2026 Africa Nuclear Innovation Summit: Nearly 600 million lack electricity; energy security tops agenda

The Africa Nuclear Innovation Summit opened in Rwanda on May 19. IAEA Director General Grossi noted nearly 600 million Africans lack access to power, making energy security the core priority for regional development. The summit called for optimized financing frameworks to turn nuclear energy policy proposals into investable projects.

V. Russian Market

Trump tightens Russian oil sanctions on eve of Putin’s China visit; expired waivers block supply channels

The U.S. declined to extend temporary Russian crude sanctions waivers after their May 17 expiry, cutting off roughly 3–4 million barrels per month of Russian heavy crude from global markets. The policy shift coincides with President Putin’s upcoming state visit to China.

Meanwhile, U.S.-Iran negotiations show signs of softening: Washington agreed to temporarily suspend Iranian oil sanctions during talks, creating a stark contrast between restrictive measures on Russia and leniency toward Iran.

Iran submits new negotiation proposal; U.S. grants temporary sanctions relief on Iranian crude during talks

Iran handed over a revised negotiation blueprint to the U.S. on May 18, after which Washington relaxed rules to temporarily lift oil sanctions on Iran for the duration of negotiations.

Iran also established the Persian Gulf Strait Authority (PGSA) to manage maritime operations in the Strait of Hormuz, stating it has rolled out measures to safeguard shipping safety. This marks the first sanctions relief signal since the U.S.-Iran conflict erupted.

VI. South Asian Market

India’s energy security crisis as Russian oil waivers expire; 2.3 million bpd imports face secondary sanctions

The May 16 Russian crude waiver expired without renewal. India imports 2.3 million barrels of Russian oil daily, accounting for 50% of total crude intake, and now faces risks of blocked bank settlements, marine insurance and U.S. dollar payment channels due to secondary sanctions.

India rushed to sign an energy supply agreement with the UAE to secure alternative crude, yet Middle Eastern shipments remain severely constrained by Strait of Hormuz blockades. Vehicle queues at gas stations stretch over 3 kilometers, while edible oil and fertilizer prices surge nationwide.

VII. Malaysian Market (Marine Lubricants)

Singapore VLSFO quoted at $852.5/ton; bunker fuel market trades sideways

Singapore port Very Low Sulfur Fuel Oil (VLSFO) was priced at $852.5 per ton on May 15 (+$16.5). High-sulfur 380cSt bunker fuel ranges $715–725/ton, and Marine Gas Oil (MGO) trades at $1,235–1,245/ton.

Domestic wholesale delivered prices for low-sulfur 180cSt fuel oil stand at RMB 5,150–5,450/ton. Expanded supplies of low-sulfur asphalt in Northeast China lifted feedstock costs, driving national price gains led by northern regions. Terminal inquiry volume remains sluggish, leaving dealers under persistent inventory liquidation pressure.

Malaysian Prime Minister: Fuel supply uncertainties may emerge in June

Malaysian PM Anwar stated Petroliam Nasional Berhad (Petronas) is actually a net crude importer, with supply outlook unclear after June. Petronas has secured sufficient fuel stocks for gas stations through the end of June, yet prolonged blockades in the Strait of Hormuz will disrupt global bunker fuel supply chains.

VIII. Lubricant Popular Science (For Customer Reference)

What does a crude oil crash mean for lubricant prices? Will lubricants fall in tandem?

No immediate price cuts will follow. Lubricant pricing logic: raw material costs (base oil + additives) account for 60–70% of total expenses, yet price adjustments lag crude trends by 1–3 months.

The May 20 crude plunge stems from short-term futures market sentiment; spot base oil prices have not yet declined. Additionally, additive, packaging and logistics costs are not directly correlated with crude futures prices.

Coupled with the 5–10% industry-wide price hike implemented across April–May, lubricant brands will not roll out new markdowns in the short run. Cost reductions will only pass through to end consumers from June to July at the earliest.

Customer sales talking point: Stockpiling is still cost-effective at present, as spot raw material costs have not decreased yet.

Marine lubricant system classification: Cylinder Oil, System Oil & Trunk Piston Engine Oil

Large low-speed two-stroke marine engines (container ships, oil tankers) adopt a dual-oil system:

1. Cylinder Oil: Injected to cylinder liners via lubricator quills for one-time consumption, with Base Number (BN) ranging 40–100 to neutralize acidic byproducts from high-sulfur fuel combustion.

2. System Oil: Circulates to lubricate crankcase components, featuring low BN (5–8), long service intervals and regular condition monitoring.

Medium-speed four-stroke engines (bulk carriers, fishing vessels) use unified Trunk Piston Engine Oil, which combines lubrication and acid neutralization functions with BN 20–40.

Core oil selection rule: Fuel sulfur content determines required BN grade – BN 70+ for fuels with sulfur >3.5%, BN 40 sufficient for low-sulfur fuels (<0.5%).

IX. Technical Highlights (Thursday Special Topic: Marine Lubricants)

Full rollout of API SQ / ILSAC GF-7A; domestic brands accelerate layout in premium engine oil track

The 2026 API SQ / ILSAC GF-7A standard has officially taken effect. Uni Lubricants Taiheneng completed dual certifications as an early adopter, while Kunlun Tianrun upgraded its full product lineup.

The new standard tightens requirements for Low-Speed Pre-Ignition (LSPI) suppression, fuel efficiency and emission reduction performance. Domestic lubricant brands now compete head-to-head with global majors Mobil and Shell in the high-end oil segment, with hybrid-dedicated oil formulations emerging as a high-growth blue ocean.

Lubrizol launches Chinese trademark 'EVOGEN Yijing' to drive industrial synergy for e-drive systems

Lubrizol rolled out the Chinese registered trademark 'EVOGEN Yijing' for its EVOGEN series, specialized lubricants for electric drive systems (EV reducers & e-drive transmissions).

With rapid penetration of new energy vehicles, traditional lubricant manufacturers are rushing to launch hybrid and pure-electric dedicated product lines, triggering industry reshuffling where OEM factories face elimination without technological transformation.