Lubricants Market Morning Report 20260528

Market Brief (Formal Website English Version)

I. Global Market Updates

Crude Oil Plunges Again on May 28: WTI Settles Down 5.55% at $88.68, Brent Drops 5.31% to $94.29

Back-and-forth twists in US-Iran negotiations triggered a sharp slump in oil prices from high levels. WTI closed at USD 88.68 per barrel (-5.55%), and Brent settled at USD 94.29 per barrel (-5.31%). Over the whole month, WTI lost more than 20% cumulatively, while Brent fell roughly 12%. During Asian trading hours on May 28, WTI rebounded 1% intraday to $89.57 yet failed to sustain the gain.

Trump: No single nation governs the Strait of Hormuz, warns Oman of military retaliation for non-compliance

At a cabinet meeting on May 27, Trump stated the Strait of Hormuz constitutes international waters under no single country’s jurisdiction, rejecting proposals for joint Iran-Oman administration of the strait. He issued a warning to Oman, a Gulf ally, that non-compliant conduct would trigger military strikes. On the same day, Bagheri, Deputy Secretary of Iran’s Supreme National Security Council, noted Iran and the US had not reached consensus on strait-related issues and negotiations were still underway.

Domestic Oil Prices Expected to Cut RMB 340/ton on June 4, fully offsetting two consecutive May hikes

As of the 4th working day on May 27, the crude oil price change rate stood at -5.8%, corresponding to a price reduction of RMB 340 per ton (a cut of approximately RMB 0.26–0.29 per liter). Based on current trends, when the pricing adjustment window opens on June 4, the RMB 75/ton hike implemented on May 21 will be fully erased with an additional cut. The national average retail price of No.92 gasoline currently stands at RMB 8.76 per liter.

Iran refuses to back down over Trump’s remarks, sticking to three red lines: uranium enrichment, strait jurisdiction, full sanctions relief

The head of the National Security Committee of Iran’s Parliament stated on May 28 that Iran would not yield to Trump’s statements and would adhere to three non-negotiable red lines during negotiations: retention of uranium enrichment capacity and enriched uranium stockpiles, sovereign jurisdiction over the Strait of Hormuz, and complete lifting of all sanctions. Textual consultations for the US-Iran memorandum will take 'several more days', with the two sides remaining deadlocked on nuclear matters and the scope of sanctions relief.

Full framework of US-Iran Memorandum: Reciprocal ceasefire, 60-day truce, $12bn asset unfreezing & Iran oil exports

The two sides 'basically reached consensus' on the framework of a Memorandum of Understanding on May 24: Iran pledges to reopen the strait, clear sea mines to guarantee safe shipping, and commit to nuclear non-proliferation; the US agrees to extend the bilateral ceasefire for 60 days, lift maritime blockades, unfreeze around USD 12 billion of Iranian overseas assets, and resume permitting Iranian crude exports. Full navigation through the strait will resume within 30 days of formal signing. However, Trump backtracked on May 27, commenting he remained dissatisfied and no final agreement had been secured.

II. Lubricant Industry News

May 150N base oil average price RMB 9,783/ton, down 6% month-on-month; Group II capacity utilization only 57.62%

Domestic output of Group I/II/III base oils totaled 560,000 tons in May, a 4.44% month-on-month decline. The monthly average price of 150N base oil hit RMB 9,783/ton (down 6% MoM), and 500N slid 1% to RMB 10,578/ton. The market entered seasonal low demand in late April, while maintenance schedules at multiple refineries (Huanghe New Materials, Xintai Petrochemical, Liaohe Petrochemical) intensified in mid-May. Tightened supply may support price stabilization in Q3.

Sinopec Lubricants opens tender for additive framework agreement; Rianlon wins bid for Octylated/Butylated Diphenylamine

On May 24, Sinopec Lubricant Co., Ltd. published the pre-award announcement for its 2026 lubricant additive framework tender. Tianjin Rianlon New Materials Co., Ltd. was selected as the supplier of octylated/butylated diphenylamine. Additives account for roughly 15–20% of total lubricant manufacturing costs, and this framework tender signals leading enterprises are locking in stable supply of critical additives.

Domestic HSFO 180CST mainstream quotation RMB 5,700–6,650/ton; crude downturn eases cost pressure

May 26 domestic bunker fuel (IFO 180CST) ex-terminal prices: Shanghai RMB 6,020/MT, Ningbo RMB 5,800/MT, Qingdao RMB 6,650/MT, Zhanjiang RMB 5,700/MT. Bearish crude sentiment slightly relaxes blending costs, yet terminal shipping demand only recovers marginally, leaving bunker suppliers facing resistance to new order signing and flat price levels.

III. South American Market

India shifts crude sourcing to South America & Africa amid Hormuz shipping disruption: Venezuela, Brazil, Angola, Nigeria

Constrained transit in the Strait of Hormuz drove Indian refiners to drastically ramp up crude imports from Venezuela, Brazil, Angola and Nigeria between April and May to offset Middle Eastern supply shortfalls. India suspended purchases from Iraq last month due to export disruptions. Kpler data shows India’s projected refined oil demand growth has been revised down by nearly 40%, with high crude costs passing through to end-consumer consumption.

IV. African Market

Follow-up of Africa Nuclear Energy Summit: Lubricant demand rises steadily alongside industrialization

The Africa Nuclear Innovation Summit concluded in Rwanda on May 19, highlighting an urgent power shortage affecting nearly 600 million people. ExxonMobil and Shell continue expanding deepwater oilfield layouts in Nigeria and Angola. Though the African lubricant market starts from a low base, it boasts world-leading growth rates driven by industrialization and infrastructure construction, bringing prominent export opportunities for Chinese brands.

V. Russian Market

Russian crude sanctions waiver extended a second time to June 17; Iranian oil comeback to erode Russia’s price discount edge

The US announced on May 18 a second 30-day extension of sanctions exemptions for seaborne Russian crude, effective until June 17, following the first extension issued April 17. Should the US-Iran memorandum be formally signed, Iran will resume exporting 2–3 million barrels of crude daily. Russian crude will lose its price advantage for Indian buyers, as Iranian heavy crude delivers superior quality without sanctions-related risk premiums.

VI. South Asian Market

Heatwave + oil supply panic in India: Diesel sales up 19.66% YoY, gasoline +20.39%; strategic reserves only cover 9.5 days

Diesel sales in Maharashtra surged 19.66% year-on-year in the first half of the month, with gasoline rising 20.39%, fueled by heatwaves and robust agricultural demand. India relies on imports for 85% of its crude and holds strategic petroleum reserves sufficient for merely 9.5 days (the IEA recommends a 90-day reserve buffer). Prolonged disruption in the Strait of Hormuz will expose India to severe supply risks. Modi’s intensive shuttle diplomacy across five nations to secure crude supplies remains to bear fruit.

VII. Malaysian Market (Marine Lubricants)

Singapore bunker prices: HSFO 380CST $715–725/MT, VLSFO $860–870/MT

Longzhong Information data dated May 27 shows Singapore bunker quotations: High-sulfur fuel oil (380cSt) USD 715–725 per metric ton, very low-sulfur fuel oil USD 860–870 per metric ton, marine gas oil (MGO) USD 1,235–1,245 per metric ton. Hong Kong market prices are comparable: HSFO 380cSt $715–725/MT, VLSFO $870–880/MT. Bunker prices are expected to decline if the US-Iran deal is signed and the Hormuz strait reopens.

VIII. Lubricant Popular Science

Is it time to stock up on lubricants amid the crude slump?

WTI has fallen 16% from $105 to $88 per barrel, yet terminal lubricant retail prices will not drop immediately for three core reasons:

1. Manufacturers require an average of 1–2 months to deplete high-cost base oil inventories purchased previously;

2. The industry just completed a 5–10% round of price hikes between March and May, and sudden markdowns would damage brand reputation;

3. Logistics, packaging and labor costs are rigid and non-negotiable.

Recommendations: Distributors should avoid large-scale stockpiling at present; end-users may wait for the Q3 price adjustment window (projected 3–5% reduction) to place bulk orders.

(Customer-Oriented Popular Science)

Core Differences Between API SP and API SQ & Oil Selection Guidance

API SP (current mainstream grade) vs API SQ (launched late 2025):

SQ introduces mandatory Low-Speed Pre-Ignition (LSPI) testing, stricter chain wear protection, upgraded fuel economy requirements, and lowers the minimum High-Temperature High-Shear (HTHS) viscosity threshold from 3.5 to 3.0 for 0W-20 grades.

In short, SQ delivers superior performance for hybrid vehicles with frequent start-stop cycles and all-round enhanced engine protection.

Oil selection advice: Prioritize SQ-certified lubricants for China National VI b vehicles; API SP products fully suffice for China National V and older models with no need to pursue the newest standard. Note: SQ motor oils generally carry a price premium, requiring cost-performance tradeoffs.

(Sales & Technical Training Material)

IX. Technical Highlights (Wednesday Focus: Base Oil & Synthetic Oil Technology)

2026 Lubricant Industry Outlook: Triple pressures of new energy penetration, hybrid-specific formulations & OEM contract reshuffling

The 2026 lubricant market faces three major challenges:

1. New energy vehicle penetration curbs demand for conventional internal combustion engine oils, with a projected 750,000-ton (-22%) demand decline by 2028 compared to 2020;

2. Frequent start-stop cycles of hybrid powertrains demand specialized anti-emulsification & anti-shear formulations; traditional lubricants will trigger malfunctions after several thousand kilometers if used directly;

3. Hidden reshuffling of OEM contract manufacturing eliminates small factories lacking technical accumulation.

Core industry trends: High-end upgrading, new energy specialization, multi-scenario customized lubrication solutions.

2026 China International Petrochemical Technology Industry Forum to Kick Off in Shanghai in June, Theme: 'Innovate for Development, Layout Global Markets'

The 2026 China International Petrochemical Technology Industry Forum will be held June 9 at Shanghai New International Expo Center, concurrent with Inter Lubric China 2026. The forum centers on lubricant additive technology, advanced base oil R&D, and new energy lubrication solutions. Leading domestic enterprises (Uni Lubricants, Kunlun, Lopal) are set to showcase new SQ-grade products and dedicated hybrid engine oil formulations.

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