Lubricants Market Morning Report 20260529

Market Brief (Official Website Formal English Version)

I. Global Market Updates

Crude Oil Closed Sharply Lower on May 27: WTI $89.42 (-5.00%), Brent $93.11 (-3.82%)

Oil prices retreated amid progress in US-Iran negotiations. On May 27, WTI crude settled at USD 89.42 per barrel, down 5.00%, while Brent crude closed at USD 93.11 per barrel, falling 3.82%. Markets expect full navigation to resume in the Strait of Hormuz, triggering a rapid fade of geopolitical risk premiums. Previously, WTI once surged above USD 105, resulting in extreme volatility throughout the month.

EIA Monthly Report: 2026 Average Brent Forecast $95/bbl, WTI $85.68/bbl

The May 12 Short-Term Energy Outlook from the U.S. Energy Information Administration (EIA) revised the 2026 Brent crude price forecast down to USD 95 per barrel (previous forecast: $96), and WTI to USD 85.68 per barrel (previous forecast: $87.41). It projects Brent at $79 and WTI at $74.39 for 2027. The report also cut the 2026 global oil demand growth outlook to 104.2 million barrels per day.

Final Stage of US-Iran Deal: Strait of Hormuz Navigation to Resume in 30 Days, $12 Billion Iranian Assets Unfrozen

On May 23, Trump announced that the US and Iran have basically reached an agreement. Core clauses of the Memorandum of Understanding include: full shipping access restored in the Strait of Hormuz within 30 days; the US unfreezes approximately USD 12 billion of Iranian assets; both sides implement a 60-day ceasefire. Iran is required to clear sea mines to guarantee safe navigation and commit to non-proliferation of nuclear weapons. Nevertheless, Iran emphasizes it retains full jurisdiction over the strait.

Washington Post: US and Iran Reach Consensus on Memorandum of Understanding Framework

A May 24 report from the Washington Post stated the US and Iran agreed on the framework of the memorandum, covering a 60-day ceasefire extension, mine clearance and reopening of the Strait of Hormuz, and Iran’s reaffirmation of its nuclear non-development commitment. Once signed, Iran will immediately reopen the strait and restore shipping capacity to pre-conflict levels in phases, though the formal signing will take several more days.

Domestic refined oil prices hiked RMB 320/ton on May 8, followed by another RMB 75/ton lift on May 21

Domestic gasoline and diesel prices rose RMB 320 and RMB 310 per ton respectively on May 8; a second hike of RMB 75 and RMB 70 per ton followed on May 21. The cumulative increase across two rounds nears RMB 400 per ton, pushing the national average price of No.92 gasoline above RMB 8.7 per liter. Sustained high crude volatility triggered consecutive refined oil price hikes, substantially increasing fuel costs for end consumers.

EIA: 2026 Global Oil Demand 104.2 MMbpd, Output 101.6 MMbpd

EIA monthly data forecasts 2026 global oil demand at 104.2 million barrels per day and global output at 101.6 million barrels per day, creating a supply-demand gap of roughly 2.6 million barrels per day. Formalization of the US-Iran agreement and the return of Iranian crude to the market will effectively ease tight supply conditions.

II. Lubricant Industry News

May Base Oil Market: Domestic 150N Average RMB 9,737/MT, Imported Group II 150N Reference RMB 16,000/MT

Data from Longzhong Information shows the traded price of 60N base oil in South China stands at RMB 7,600/MT, mainstream 150N at RMB 10,350/MT, and 500N at around RMB 10,575/MT. Imported Group II base oils command a notable premium over domestic equivalents: imported 150N in East China is quoted at RMB 16,000/MT and 500N at RMB 15,000/MT. The base oil market faces downward pressure amid seasonal low demand and falling crude prices.

Sinopec Lubricants opens 2026 additive framework tender; Rianlon wins bid for Octylated/Butylated Diphenylamine

On May 24, Sinopec Lubricant Co., Ltd. released the pre-award notice for its 2026 lubricant additive framework agreement. Tianjin Rianlon New Materials Co., Ltd. won the tender for octylated/butylated diphenylamine procurement. Additives account for roughly 15-20% of total lubricant manufacturing costs, and leading enterprises are locking in stable supplies of critical additives.

III. South American Market

Russia cuts 2026–2029 oil output & export forecasts amid Western sanctions and drone attacks

Russia’s Ministry of Economic Development downgraded projected oil and gas output and exports for the next three years. Western sanctions and Ukrainian drone strikes targeting Russian energy infrastructure triggered a crude output decline in early April. The US waiver for seaborne Russian crude was extended a second time until June 17, yet an official US-Iran deal would erode the price discount advantage of Russian crude.

IV. African Market

Ruifeng New Materials completes registration of Saudi Yanbu lubricant additive JV, covering Middle East, Africa and India

The lubricant additive production joint venture between Ruifeng New Materials and Saudi Arabia’s Farabi Downstream has completed registration, with Ruifeng Hong Kong holding a 60% equity stake. The project targets the Middle East, Africa and Indian markets, shifting additive supply from cross-border shipments to localized production and integrated service packages.

V. Russian Market

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

The US extended sanctions exemptions for seaborne Russian crude by another 30 days to June 17. If the US-Iran agreement enters into force, Iran will resume exporting 2–3 million barrels of crude daily. Russian crude will lose its discount advantage for Indian buyers, as Iranian heavy crude delivers superior quality with no sanctions risk premium attached.

VI. South Asian Market

India’s crude import dependency hits 85% with only 9.5 days of strategic reserves; severe supply risks loom amid Hormuz crisis

India relies on imports for 85% of its crude consumption and holds strategic reserves sufficient for merely 9.5 days (the IEA recommends a 90-day reserve buffer). Persistent shipping disruptions in the Strait of Hormuz expose India to acute supply risks. To offset Middle Eastern supply shortfalls, India has ramped up crude purchases from Venezuela, Brazil, Angola and Nigeria.

VII. Malaysian Market (Marine Lubricants)

Malaysia’s Nam Cheong secures USD 25 million offshore vessel charter; Southeast Asian marine demand remains robust

Malaysian offshore support vessel provider Nam Cheong signed a USD 25 million charter contract covering Anchor Handling Tug Supply (AHTS) vessels and maintenance workboats, with maximum two-year tenures. Marine vessel demand across Southeast Asia stays strong, and offshore petroleum projects continuously drive growth in the marine engineering sector.

VIII. Lubricant Popular Science

How Will a US-Iran Deal and Falling Crude Prices Impact Lubricant Rates?

WTI has dropped 15% from USD 105 to USD 89 per barrel, yet terminal lubricant prices will not decline immediately, for three key reasons:

1. Manufacturers require 1–2 months to deplete high-cost base oil inventories purchased earlier;

2. The industry just completed a 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 Q3 price cuts (projected 3–5% reduction) to place bulk orders.

(Customer-Oriented Popular Science)

Differences Between ILSAC GF-7 and API SQ: Guidance for Oil Selection

ILSAC GF-7 is engineered for 2026 and newer vehicle models. Compared with API SQ, GF-7 mandates compulsory testing for Low-Speed Pre-Ignition (LSPI), stricter chain wear protection, and lowers the minimum High-Temperature High-Shear (HTHS) viscosity threshold to 3.0 for 0W-20 grades.

In short, GF-7 delivers superior performance for hybrid vehicles with frequent start-stop cycles and stricter fuel economy standards.

Oil selection advice: Prioritize GF-7 certified lubricants for China National VI b vehicles; API SP products suffice for China National V and older models. Note: GF-7 motor oils generally carry a price premium, requiring cost-performance tradeoffs.

(Sales & Technical Training Material)

IX. Technical Highlights (Thursday Focus: Automotive Lubricants)

BYD and ExxonMobil launch world’s first dedicated PHEV motor oil, optimized for DM Dual-Mode Technology

BYD and ExxonMobil co-developed the world’s first motor oil exclusively formulated for Plug-in Hybrid Electric Vehicle (PHEV) powertrains, fully tailored to BYD DM dual-mode hybrid platforms. Hybrid engines operate under unique harsh conditions: frequent start-stop cycles, prolonged low-temperature running, and elevated risk of water-induced emulsification. The dedicated oil features customized formulation: low viscosity design to reduce cold-start resistance and enhanced anti-emulsification additives to prevent lubricant degradation.

Uni New Energy: Hybrid-specific motor oils demand low viscosity + robust anti-emulsification performance

2026 maintenance for hybrid powertrains requires specialty 0W-8 or 0W-12 ultra-low viscosity motor oils with outstanding anti-emulsification properties. Hybrid engines endure up to 500,000 start-stop cycles over their service life — ten times the cycle count of conventional gasoline vehicles — alongside extended low-temperature operation and accumulated moisture that triggers emulsification.

Compared with traditional engine oils, hybrid-dedicated formulations include: low viscosity base stocks to cut cold-start friction, reinforced anti-emulsifier packages, excellent electrical insulation, and effective sludge inhibition.

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