Lubricants Market Morning Report 20260608

一、Global Market Dynamics

US-Iran talks make headway, Strait of Hormuz set to reopen

On June 3, Trump said US-Iran negotiations have advanced remarkably well, and a new round of talks may be held this weekend. The Strait of Hormuz will be reopened immediately once an agreement is signed. Israel has started pulling troops out of southern Lebanon, yet Iran insists the deal must include a full Israeli withdrawal from Lebanon. Driven by the news, WTI crude dropped to 92 US dollars per barrel and Brent crude fell to 95 US dollars per barrel.

US forces disable another Iran-linked oil tanker; maritime blockade persists

On June 2, U.S. Central Command struck the Botswana-flagged oil tanker Lexie in the Arabian Gulf with Hellfire missiles, leaving the vessel incapacitated. Since the blockade took effect on April 13, U.S. forces have disabled 6 merchant ships and diverted 122 vessels. Despite the ongoing US-Iran ceasefire, maritime blockades remain in place, and geopolitical risks still linger.

Singapore’s base oil exports slump to six-year low

As of June 3, Singapore’s monthly base oil exports hit the lowest level in six years, pointing to sluggish lubricant demand across Asia. In contrast, Europe’s Group I base oil supply climbed to a seven-month high in March, and U.S. base oil supply also rebounded to a seven-month peak. The global supply-demand landscape continues to diverge.

EIA: Brent crude to average $95/barrel in 2026

According to the latest Short-Term Energy Outlook released by the EIA, Brent crude is projected to average 95 US dollars per barrel in 2026, down from the previous forecast of 96 US dollars. The average price of WTI crude is estimated at 85.68 US dollars per barrel, compared with the prior forecast of 87.41 US dollars. For 2027, the forecast for Brent crude is revised upward to 79 US dollars per barrel and WTI to 74.39 US dollars per barrel, indicating expectations of looser long-term supply and demand.

Oversupply emerges in Brazil’s base oil market amid output recovery

Brazil’s base oil supply exceeded domestic demand in April, with local production continuing to recover. As refinery operating rates pick up across South America, the regional base oil market faces downward pressure, and prices are expected to stay weak in the short term.

Domestic refined oil prices cut by RMB 525/505 per tonne on June 6

Effective at 24:00 on June 4, China cut the prices of gasoline and diesel by 525 yuan and 505 yuan per tonne respectively. Translated to retail prices, No.92 gasoline dropped by 0.41 yuan per litre, No.95 gasoline by 0.44 yuan per litre, and No.0 diesel by 0.43 yuan per litre. The next price adjustment window will open on June 19.

II. Lubricant Industry News

SI Group completes capital restructuring and appoints new board

SI Group, a global manufacturer of specialty chemicals and lubricant additives, recently announced the completion of its capital restructuring and the appointment of a new board of directors. The restructuring aims to optimize capital structure and ramp up R&D investment, which is expected to enhance its global competitiveness in lubricant additives and functional chemicals.

Global bunker fuel prices fluctuate amid Middle East uncertainties

Global bunker fuel prices saw mixed movements in early June, with geopolitical uncertainties in the Middle East dominating market sentiment. A sharp increase in container shipping capacity on Far East-Europe routes has led to obvious regional divergence in bunker fuel demand, and the price gap between Singapore and Malaysia has widened with greater volatility.

Global industrial lubricants market to hit USD 30 billion in 2026

A report by Future Market Insights shows the global industrial lubricants market was valued at 28.6 billion US dollars in 2025, and is forecast to reach 30 billion US dollars in 2026. Growth is fueled by manufacturing recovery, wider adoption of automated equipment and expanding demand in emerging markets. The Asia-Pacific region leads the growth, with China and India as major contributors.

III. South American Market

Brazil’s base oil output recovers; oversupply weighs on prices

Brazil’s base oil supply outstripped domestic demand in April, and local refineries have resumed normal operating rates. The South American base oil market is under short-term pressure. Intensified export competition from Brazil has suppressed base oil prices in neighboring countries, which will help lower raw material costs for regional lubricant blenders.

IV. African Market

Angola’s crude oil exports continue shifting eastward

Angola’s June crude export schedule shows its light crude oil is largely shipped to Asian buyers, mainly China and India. Angola is striving to boost added value of crude processing and press ahead with domestic refinery upgrading projects. Energy cooperation between China and Angola deepens, and Angola has become one of China’s major crude oil suppliers.

V. Russian Market

Putin voices support for India at St. Petersburg Forum

At the St. Petersburg International Economic Forum in early June, Putin spoke highly of the St. Petersburg Declaration signed by Modi, stating openly that pressuring India would be futile and calling India a reliable partner of Russia. Energy trade between Russia and India keeps expanding, with large volumes of Russian oil and fertilizers exported to India.

Russia downgrades oil output and export forecasts for 2026–2029

Russia’s Ministry of Economic Development revised down its projections for crude oil and natural gas output and exports over the next three years. Western sanctions and drone attacks on energy infrastructure have already caused a decline in Russia’s crude output since early April. Combined with long-term production cut expectations and ongoing sanctions, Russia faces sustained risks of shrinking oil supply.

VI. South Asian Market

India diversifies crude imports to reduce reliance on Russian oil

Indian refiners have increased crude purchases from Venezuela, Brazil, Angola and Nigeria to lower dependence on Russian oil. The U.S. sanction waiver for Russian oil has been extended to June 17. Even so, India has proactively built a diversified supply chain to guarantee long-term crude import security.

VII. Malaysian Market (Marine Lubricants)

Malaysian bunker fuel prices follow international crude lower

Driven by falling global crude prices and eased tensions in the Middle East, bunker fuel prices across Asia weakened overall. The price of 380CST high-sulfur bunker fuel in Singapore declined alongside Brent crude. Demand for bunker fuel at Port Klang and Johor Port in Malaysia remained steady with no major swings in refueling volume. Ship owners adopt a wait-and-see attitude and slow down bunker procurement.

IX. Technical Highlights

Interpretation of ASTM D7669: Standard Guide for Trend Analysis of Oil Condition Monitoring

ASTM D7669 specifies methodologies for trend analysis of in-service lubricant data and serves as a core standard for oil analysis. It stipulates that regular sampling shall be conducted to establish baseline data, and long-term trends of key indicators including viscosity, acid number, water content and particle count shall be tracked to predict equipment failures. Alarms will be triggered once indicators deviate from the baseline beyond control limits. This standard is widely applied to equipment health management in industrial facilities.

Frontier research on nano lubricant additives: Friction reduction mechanism of fullerenes

Fullerene nanoparticles dispersed in mineral base oil can effectively lower the friction coefficient. Studies show these nanoparticles improve lubrication via three mechanisms: filling microscopic pits to reduce contact between rough surfaces; forming a rolling bearing effect to cut shear resistance; and generating protective films through tribochemical reactions with metal surfaces. Nano lubrication technology represents a key development direction for high-end lubricants in the future.