The IEA sharply lowered its 2026 global oil demand outlook, citing the escalating Mideast conflict and elevated energy prices. The agency now projects a significantly steeper year-on-year decline in consumption than previously forecast, warning that market tightening and demand destruction are accelerating.
U.S. benchmark and international crude benchmarks both fell as investors took profits following prior gains on the announcement of sweeping new U.S. sanctions targeting Iran. The 'Operation Economic Outcast' campaign imposes global sanctions with no exemption for China, creating uncertainty around Iranian oil flows. Prices remain volatile as markets assess whether the sanctions will successfully isolate Iran's energy sector or be circumvented.
Asia
The price curve for white oil showed an inconsistent trend in Q2'26 in the Asian region. During the early part of the quarter, elevated crude and refinery costs increased production expenses for highly refined mineral. However, market prices normalised toward June as crude values retreated, reducing feedstock pressure and encouraging buyers to delay larger purchases. China retained sufficient domestic refining availability, while differences in viscosity, purity and end-use specifications created varied market conditions across industrial and specialty grades. China’s manufacturing output increased 4.4% year on year in May, providing support from plastics, chemicals and industrial processing. However, output of raw chemical materials and chemical products expanded only marginally, showing that downstream demand was not strong enough to sustain aggressive increases.
Europe
European white oil conditions remained comparatively firm through most of Q2 before easing by the end of the quarter. The market faced high energy and freight costs during the quarter, resulting in higher refinery operating expenses. According to Eurostat, euro-area industrial production increased only 0.1% month on month in April, indicating limited momentum across manufacturing. Demand from pharmaceuticals, cosmetics, food-contact applications and plastics remained stable, but general industrial buyers maintained controlled inventories. Softer crude values toward June reduced some cost pressure, although stringent purity requirements and higher European processing expenses prevented a sharper decline.
North America
North American white oil markets remained stable to firm as higher processing, distribution and industrial input costs offset softer crude conditions late in Q2. U.S. processed intermediate-goods prices increased 3.5% in May (as reported by U.S. Bureau of Labor Statistics), indicating continued pressure across chemical and industrial supply chains. Demand from pharmaceuticals, personal care, polymers, lubricants and food-processing applications remained regular, while unchanged manufacturing output limited stronger industrial consumption.
Analyst Insight
According to Procurement Resource, white oil markets are expected to remain stable to slightly soft as lower crude costs ease refinery pressure, while specialty-grade demand and constrained refinery availability limit deeper declines.
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Asia
White oil prices in Asia increased during Q1’26 as refiners faced higher feedstock costs and tighter supply movement. In India, disruptions around the Strait of Hormuz affected refinery procurement, with 40% of crude imports linked to the Middle East and 60% of LPG flows exposed to the same route. Higher freight and insurance costs raised landed feedstock expenses, which filtered into white oil production. Refiners also turned to alternate barrels, including Russian supply, while rescheduling maintenance and shipments. Meanwhile, demand from pharma, cosmetics, and industrial lubricant sectors remained stable, supporting the upward price movement during the quarter.
Europe
White oil prices in Europe rose in Q1’26 as limited Gulf-origin supply and higher import costs tightened refinery economics. European buyers competed for fewer available cargoes, while freight and insurance premiums increased due to riskier shipping conditions. However, demand from pharmaceutical, personal care, and industrial users was moderate, but limited supply flexibility kept prices firm.
North America
In North America, white oil prices moved upward in Q1’26 as refinery feedstock costs increased and Gulf-linked import risk premiums rose. Higher freight and tanker insurance costs affected supply chains, though domestic production and strategic stock availability helped reduce the severity of shortages. U.S. crude inventories rose by 3.5 million barrels to the highest level in over three years, supporting refinery continuity. Demand from healthcare, cosmetics, food-grade lubricants, and industrial applications stayed steady, keeping white oil prices on a firm trend.
White oil, commonly referred to as mineral oil or liquid paraffin, is an oil made from petroleum that has no flavour, smell, or color. Due to the presence of saturated aliphatic hydrocarbons, it is chemically inert. It is commonly used in pharmaceuticals, cosmetics, food processing, and a variety of other industries. Due to its qualities, which include non-comedogenicity and low toxicity, it can be used in food-grade items including lubricants, ointments, and lotions.
Pharmaceutical production, Lubricants, Agriculture, Rubber and plastic industry, Adhesives and sealants
Liquid Paraffin, Mineral Oil
British Petroleum, Renkert Oil, Inc, Exxon Mobil Corporation, JX Nippon Oil and Energy Corporation, Royal-Dutch Shell N.V., Sinopec Corporation
CurrencyUS$ (Data can also be provided in local currency)
Supplier Database AvailabilityYes
Customization ScopeThe report can be customized as per the requirements of the customer
Post-Sale Analyst Support360-degree analyst support after report delivery
Note: Our supplier search experts can assist your procurement teams in compiling and validating a list of suppliers indicating they have products, services, and capabilities that meet your company's needs.
The production of white oil involves blending paraffinic and naphthenic hydrocarbons, two petrochemical fluids, while upholding high purity criteria to ensure the highest quality of the finished product. The product is then produced by purifying and processing the chemical.
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