Base oils and waxes
Overview
As the world pivots towards decarbonisation, challenges and opportunities loom for base oils production and demand. Staying on top of this market is more important than ever to realise these opportunities and mitigate pricing risk.
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Latest base oils and waxes news
Browse the latest market moving news on the global base oils and waxes market.
Retaliatory tariffs could weigh on US base oil exports
Retaliatory tariffs could weigh on US base oil exports
London, 4 March (Argus) — Canada's retaliatory tariffs on US imports such as cosmetics, motorcycles and rubber tyres are also likely to affect Canadian demand for US finished lubricant and naphthenic base oils. Canada has imposed 25pc tariffs on $30bn worth of US imports, to be followed by another $125bn of imports in three weeks, in response to the US slapping a 10pc tax on energy imports from Canada and a 25pc tariff on non-energy imports. The US tariffs took effect at 12:01am ET (05:01 GMT) on 4 March. The first round of Canadian tariffs will affect cosmetics and motorcycle imports from the US. It will likely have a knock-on effect on the process oils market as well as finished lubricant demand, as these products are key to cosmetics production and the performance and maintenance of motorcycles. The Canadian tariffs extend to rubber tyres for motorcycles, passenger cars, and heavy duty and agricultural vehicles, which could weigh on demand for naphthenic base oils as they are used to manufacture rubber tyres. The second wave of Canadian tariffs is expected to cover passenger cars from the US, further weakening finished lubricant demand. Canada is a net importer of base oils and lubricants from the US, but is also one of the biggest exporters of those products into the US. Two of the largest Canadian base oil and lubricant plants are in the eastern province of Quebec and frequently target the US northeast and midcontinent. If base oil and lubricant trade flows between the US and Canada slow down, market participants expect more Canadian product to move into western Canada and surplus volumes to target Europe. Canada is mostly dependent on the US for its base oils and, in turn, its finished lubricant production. It has an estimated nameplate base oil production capacity of 1mn t/yr, compared with 10.8mn t/yr in the US. Canada has not placed direct tariffs on US base oils yet, and it is unclear whether it will extend them to include all energy commodities. The US is a net exporter of Group II base oils, with exports mostly targeting Mexico, Canada and Europe. If tariffs on US base oils are imposed, the US would have to target more competitively-priced regions such as India, the Mideast Gulf and west Africa. The US could also be forced to increase exports to South America, which would weigh on US export spot prices. The Mexican government has said it will announce retaliatory tariffs on 9 March. Base oils markets are unlikely to be affected in the short term as Mexico depends on the US for 90pc of its imports and has no domestic base oil production. Applications for new import permits to Mexico take 1-2 months to obtain, which would support US imports in the meantime. Furthermore, bulk availability out of Asia and Europe is limited amid a heavy round of refinery maintenance in the first half of 2025. By Gabriella Twining & John Dietrich Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.
Shell launches full-synthetic motorcycle, scooter oil
Shell launches full-synthetic motorcycle, scooter oil
London, 3 March (Argus) — Shell Lubricants will roll out globally a range of fully-synthetic motorcycle and scooter lubricants meeting the latest specifications, the company said today. Shell Advance Ultra products are motor oils delivering a 99.5pc base oil made from natural gas, rather than traditional mineral oil. Shell owns a 30,000 b/d gas-to-liquids (GTL) Group III plant in Qatar. The lubricants meet the latest 2024 American Petroleum Institute (API) SP engine oil specification, as well as the latest JASO MA2 and MB specifications for motorcycles and scooters, respectively. Stricter emissions regulations, as well as improved dirt deposit and sludge build-up is spurring demand for more premium base oils and subsequently lubricants. "The two-wheeler population continues to grow, and we see a trend of accelerated demand for premium lubricants," Shell Lubricants global executive vice president Jason Wong said. Shell has been investing in premium base oils for some years. It is converting its 147,000 b/d chemicals plant in Wesseling, Germany, to a 300,000 t/yr Group III plant . Crude processing will be halted in mid-March and the hydrocracker conversion work to a base oils unit began in mid-February. Shell has acquired two UK premium lubricants businesses to expand its electrification business. It also agreed a 12-year sourcing deal with re-refiner Puraglobe to secure volumes of re-refined Group II and Group III as part of the company's strategy to become carbon neutral by 2050. By Gabriella Twining Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.
Limited Group III base oil offers support India prices
Limited Group III base oil offers support India prices
Singapore, 25 February (Argus) — India's Group III base oil import prices have recently been supported because of limited spot offers, with suppliers more inclined to divert their cargoes towards the US and Europe. Suppliers have been less keen to push cargoes to India with attractive offers compared to last year, when Group III grades, especially 4cst, were in ample supply. Some suppliers have raised offers for Group III 4cst and 6cst to India. Group III production has fallen in the US because of a narrower spread between Group II and III base oils. This has led more US buyers to depend on Group III imports from Asian and Mideast Gulf suppliers that are in turn also targeting higher-priced markets like the US and Europe. Spot supply is likely to tighten further, as a key northeast Asian refiner is focusing on supplying Group III term volumes and has scant spot availability, while a Mideast Gulf Group III refiner will undergo a 45-day maintenance in March. Spot buying interest for Group III has remained slow in the absence of attractive offers. Indian buyers typically prefer to use Group II over Group III base oils unless specified in the formulations. Buyers that need Group III base oils in their formulations are largely covered with term volumes. Group III 4cst cfr India prices averaged at $969/t in 2024, down by 29pc compared with 2023. But Group III 4cst cfr India prices have been steadily rising between January to February. Group III 4cst cfr India averaged at $920/t in first three weeks in February, up from the average of $907/t in January. But Group III premiums to Group II remain weaker than usual, as the price increases in Group II grades outpaced Group III grades. Group II spot supply has tightened with a major northeast Asian refiner going for a turnaround at the end of February. India's Group III 4cst cfr import prices were at a premium of $130/t to Group II N70 in the week to 21 February, lower compared to the five-year average of $230/t. Supply of 6cst is the lowest among Group III grades, and India's 6cst cfr India import prices were at a premium of $230/t to Group II N150 in the week to 21 February, relatively on par with the five-year average of $236/t. The lower returns selling into India may continue to motivate suppliers to hold out for firmer bids or divert cargoes to other regions. By Chng Li Li Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.
Shell starts construction of base oil unit at Wesseling
Shell starts construction of base oil unit at Wesseling
London, 18 February (Argus) — Shell has started construction of a Group III base oil production plant at its Wesseling oil refinery in western Germany, with commissioning scheduled by 2028, the company told Argus today. Two columns of 54 and 37 meters for the base oil conversion unit have been delivered and assembled at the site, Shell said. It announced plans to convert its Wesseling hydrocracker into a Group III base oil production unit at end of January 2024. The unit is anticipated to have a production capacity of 300,000 t/yr. Shell will cease crude distillation by March 2025 at the 147,000 b/d Wesseling refinery, as the company looks to reduce CO2 emissions. The base oil plant will receive vacuum gasoil (VGO) feedstocks from Shell's neighbouring 187,000 b/d Godorf refinery. European Group III prices have dropped on a persistent supply overhang. Argus -assessed prices for fca northwest Europe Group III 4cst with partial or no approvals fell by 23pc on the year to $1,020/t on 7 February. Suppliers in the Mideast Gulf target European buyers with ample spot supplies to capitalise on higher margins. Europe is the most attractive export outlet as it remains dependent on imports of Group III material owing to its smaller Group III production capacity in comparison to other regions. By Christian Hotten Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.
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