Lubricants Market Morning Report 20260616

Global Market

US and Iran Reach Framework Agreement: 60-Day Ceasefire, Strait of Hormuz Reopened, Oil Prices Crash by Over 5%

On June 15, the United States and Iran signed a Memorandum of Understanding under Oman’s mediation. Iran agreed to reopen the Strait of Hormuz and clear sea mines; the US extended a 60-day ceasefire and unfroze approximately USD 12 billion of Iranian assets. Driven by this news, WTI crude tumbled 5.55% in a single day to USD 80.75 per barrel, while Brent crude fell 5.31% to USD 83.17 per barrel.

OPEC+ Confirms 188,000 Barrels per Day Production Hike in June and Cuts 2026 Demand Forecast

At its regular June meeting, OPEC+ approved a production increase of 188,000 barrels per day and revised down its forecast for global oil demand growth in 2026 to 1.17 million barrels per day, compared with the previous projection of 1.45 million barrels per day.

Domestic Refined Oil Prices Enter Downward Channel with Cumulative Cuts Exceeding RMB 1,000 per Ton

Since hitting a peak in late May, domestic gasoline and diesel prices have been slashed by more than RMB 1,000 per ton in total. Another drop of roughly RMB 0.16 per liter is expected at the June 18 pricing window. No. 92 gasoline in many regions now ranges between RMB 7.5 and 7.8 per liter.

UAE Releases First Production Report Since Exiting OPEC in May: Output Rises by 450,000 Barrels per Day

After withdrawing from OPEC on May 1, the UAE ramped up production rapidly, cutting its spare capacity from 3.8 million barrels per day to 2.5 million barrels per day. Coupled with the sharp slump in oil prices, this has sparked concerns within OPEC.

Industry News

Shanghai Lubricants Exhibition Wraps Up; Sector Focuses on Green and Low-Carbon Transition

The 25th Shanghai International Lubricants & Application Technology Exhibition closed from June 9 to 11 with 300 exhibitors in attendance. Core discussion topics included formulation development of lubricants dedicated to new energy vehicles, green upgrading of industrial lubrication, and digital supply chain management.

Russia Bans Jet Fuel Exports from June to Late November

The Russian government imposed a ban on jet fuel exports effective June 1 through November 30, and extended the export ban on motor gasoline until February 2026. Refinery throughput in April fell to its lowest level since 2009.

EU’s 21st Round of Sanctions Against Russia: Oil Price Cap Remains Unchanged

The European Commission proposed keeping the Russian crude oil price cap of USD 44.1 per barrel unchanged until January 2027 and scrapped the dynamic adjustment mechanism.

South American Market

Brazil remains the largest lubricant importer in South America, with steadily rising demand for machinery oils used in mining and agriculture. The 2026 Directory of South American Lubricant Importers has been published, covering more than 20 countries including Brazil, Argentina and Colombia.

African Market

Egypt (annual demand of 450,000 tons) and South Africa (360,000 tons) account for over 75% of Africa’s total market share. The June Directory of Lubricant Importers for South and East Africa has been updated, creating opportunities for Chinese enterprises to capture the mid-end market.

Russia

Russia has banned jet fuel exports from June until late November, with domestic refinery throughput hitting a 2009 low. The EU’s 21st round of sanctions retains the fixed crude oil price cap of USD 44.1 per barrel.

South Asian Market

India’s imports of Russian oil reached around 1.9 million barrels per day in May, representing a 23% month-on-month increase. The exemption for Russian oil imports was extended to June 17. India ranks as the world’s fifth-largest lubricant market, with industrial consumption making up 51% of total demand.

Malaysian Marine Fuel

Domestic quotation for 180CST marine fuel stands at RMB 5,750–5,800 per metric ton; high-sulfur bonded marine fuel at Zhoushan is priced at USD 660–670 per metric ton. Malaysia accounts for approximately 48.6% of China’s bonded marine fuel imports, ranking first among all suppliers.

Basic Knowledge

A. Popular Science: Why Are Synthetic Oils More Expensive Than Mineral Oils? Are They Worth the Extra Cost?

Synthetic oils (PAO/GTL) cost 3 to 5 times more than mineral oils for two core reasons:

1. High manufacturing cost of base stocks: Synthetic oils require chemical synthesis or gas-to-liquid production processes, whereas mineral oils are simply refined from crude oil via atmospheric and vacuum distillation.

2. Outstanding performance advantages: Synthetic oils offer 3–5 times stronger oxidation resistance than mineral oils, with oil drain intervals exceeding 10,000 kilometers, versus roughly 5,000 kilometers for mineral oils.

Whether synthetic oil is cost-effective depends on operating conditions. Mineral oil suffices for short-distance daily commuting vehicles; synthetic oil delivers better overall value for turbocharged, high-revving engines, as well as vehicles operating in extreme cold or high-temperature environments. Though its unit price is several times higher, the doubled service interval balances out the total cost of use.

B. Technology: Mechanism and Application Scenarios of Antifoams

Antifoam additives are a vital component of lubricant additive packages, mainly composed of polydimethylsiloxane (silicone oil) or acrylate copolymers. They work by lowering the surface tension of foam films to break down foam rapidly. Excessive foam triggers three major hazards: cavitation in oil pumps leading to insufficient oil supply, weakened oil film strength that accelerates component wear, and reduced heat dissipation efficiency resulting in local overheating. Typical applications include transmission fluids, circulating system oils and industrial gear oils.

Featured Technology

Organic Nitrogen Molybdenum Fullerene Lubricant: Minimum Friction Coefficient Reaches 0.001

The R&D team of Huayi Hongmeng chemically modifies fullerenes and combines them with nitrogen molybdenum to form a eutectic rolling lubricating film on metal surfaces. Four-ball friction tests show a friction coefficient below 0.001 and a wear scar diameter of 0.31 mm. The product meets both API SQ and ACEA C3 standards.

2026 Green & Intelligent Upgrade Trend in Industrial Lubrication

Iterative upgrading of base oil refining technologies (high-pressure hydrotreating plus hydroisomerization dewaxing replacing traditional processes) and innovation of eco-friendly formulas are core industry trends, supported by digital service response latency below 200 milliseconds. The entire sector is undergoing a comprehensive transformation from high-consumption, low-efficiency operation to green and intelligent production.