Lubricants Market Morning Report 20260601

Market Brief

I. Global Market Updates

WTI closes at $87.36, Brent at $91.55

International crude futures fluctuate at high levels, with market participants closely monitoring OPEC+ output policies and the pace of global demand recovery.

EIA cuts 2026 oil price forecast: Brent at $95, WTI at $85.68

The latest monthly report from the U.S. Energy Information Administration (EIA) downgraded the forecast for 2026 crude demand growth amid slowing global economic expansion.

Middle East conflicts push Brent crude above $118 at peak

Escalating geopolitical tensions triggered sharp short-term swings in international oil prices, with a remarkable surge in supply risk premiums.

Domestic refined oil prices hiked by RMB 320 per ton on May 29; No.92 gasoline up RMB 0.25 per liter

The National Development and Reform Commission (NDRC) announced a refined oil price hike, marking the largest price increase so far in 2026 and driving up fuel costs significantly for end users.

Major oil price surge of RMB 370 per ton on May 8; six hikes and one cut recorded in 2026

Since the start of 2026, domestic refined oil price adjustments have followed a pattern of six rises and one fall, with the overall price benchmark moving upward.

II. Lubricant Industry News

Shell plans divestment of French highway gas station network

Shell Group unveiled a strategic restructuring plan to spin off its highway retail fuel assets in France, focusing on high-margin core businesses.

Quotation: 100# base oil RMB 8,080/MT; imported 150BS RMB 13,650/MT

Domestic base oil quotations edge upward steadily. Prices of imported Group II base oils remain high amid sustained tight supply.

Global Base Oil Weekly Report – Market Review as of May 29

Base oil supply stays tight across the Asia-Pacific region due to refinery maintenance curbing output, with limited export volumes available.

III. Regional Market Highlights

South America: Brazil’s 2026 benchmark interest rate forecast raised to 13.25%

Expectations of further interest rate hikes by the Central Bank of Brazil have intensified. The high-interest-rate environment restrains automobile consumption and industrial activities, weighing on lubricant demand.

Africa: Refinery capacity expansion underway, yet infrastructure remains a bottleneck

Multiple African nations are pushing forward refinery capacity projects; however, insufficient supporting infrastructure such as ports and pipelines hinders industrial growth.

Russian Market: 16 Russian refineries suspended amid Ukrainian drone strikes

The Russia-Ukraine conflict persists. Drone attacks launched by Ukraine have forced numerous Russian refineries to halt production, restricting refined oil exports.

South Asia: India’s EV market expands rapidly, reshaping traditional lubricant demand structure

Soaring electric vehicle sales in India slow the growth in demand for conventional internal combustion engine oils, while demand for EV-specific lubricants rises.

Malaysia Marine Lubricants: Maersk raises bunker surcharges; VLSFO tops $700 per ton

Global marine fuel prices keep climbing. Major shipping lines including Maersk have lifted bunker surcharges, placing heavy cost pressure on vessel operators.

IV. Lubricant Basic Knowledge

Category A Popular Science: What is Sludge and How Does It Form?

Sludge refers to viscous sediment formed by the combined effects of high-temperature oxidation, mixed combustion residues, water and impurities in lubricants.

Main formation causes:

1. High-temperature oxidation: Lubricant degrades under extreme heat inside engines;

2. Incomplete combustion: Carbon deposits and soot blend into engine oil;

3. Water intrusion: Coolant leakage or condensed water leads to oil emulsification;

4. Additive depletion: Detergent-dispersants lose their ability to suspend contaminants after consumption.

Sludge can block oil galleries, impair heat dissipation and accelerate component wear. Regular oil changes and high-grade lubricants are essential for prevention.

Category B Technical Article: API Group I-V Base Oil Classification & Typical Applications

API classification standards for base oils:

1. Group I (Solvent-refined, Saturation <90%, VI 80–120): Low-grade engine oils and general industrial lubricants

2. Group II (Hydrocracked, Saturation ≥90%, VI ≥90): Mainstream passenger vehicle engine oils, hydraulic oils

3. Group III (Severely hydrocracked, VI ≥120): Synthetic-grade oils, premium automotive lubricants

4. Group IV (PAO Polyalphaolefin): Full synthetic oils, aviation lubricants

5. Group V (Esters & other synthetic stocks): High-performance additives, compressor oils

Group II and III base oils account for over 60% of global base oil output. Group IV and V products are applied in premium and special lubrication scenarios.

V. Technical Focus

Wärtsilä expands Finnish technology center, lifting capacity by 30%

Finnish marine engine manufacturer Wärtsilä announced the expansion of its Finnish R&D hub, boosting its lubricant testing and development capacity by 30% to strengthen competitiveness in marine lubrication solutions.

Global Base Oil Logistics: Tight supply in Asia-Pacific

Exportable base oil volumes remain constrained in Asia-Pacific. Refinery maintenance cycles in China and South Korea cut output, while Southeast Asia faces robust import demand, creating prominent regional supply-demand imbalances.

VI. Exhibition Calendar

• June 3–5, 2026: Shanghai International Lubricants & Auto Care Products Expo (Shanghai World Expo Exhibition & Convention Center)

• September 1–3, 2026: EV INDIA 2026 (Noida, India)

• October 28–30, 2026: International Oil & Gas Storage, Transportation Technology & Equipment Exhibition

Professional Glossary for Official Website