Why is the recovery for Group III base oils expected to take so long, even after the Strait of Hormuz reopens?

The recovery for Group III base oils is expected to be particularly drawn out due to structural disruptions—including the major outage at Qatar's Pearl gas-to-liquids (GTL) facility—and a lack of available substitutes; ICIS projects a six- to nine-month stabilization period after normalization of Hormuz shipping flows begins around end-June/start-July, meaning normalcy is unlikely before late 2026 or early 2027, with total Group III supply reduced by ~1.5 million tonnes and shortages exacerbated by quality gaps between existing material and new CTL-based alternatives from China.

What are the key implications for buyers, formulators, and blenders in the current Group III base oils market?

Buyers face limited-to-no spot availability and must anticipate contract minimum commitments and higher prices for additional volumes; formulators are urged to pursue reformulations now—while noting engine performance level (EPL) waivers have time limits and long-term disruption risk remains; strategic stocking is becoming critical, especially in Europe, which is currently the most attractive region for inventory buffering, and stakeholders must rethink contract structures to balance contractual obligations against spot market volatility.

Global Base Oils Face Long Recovery Despite Hormuz Reopening

Jun 25, 2026

ICIS forecasts global base oils stabilization by late 2026 due to Middle East conflicts and Qatar facility outages, causing severe Group III shortages. Buyers face sustained price pressure and supply constraints requiring strategic adjustments.

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Global Base Oils Face Long Recovery Despite Hormuz Reopening