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
In Asia, white oil prices firmed as feedstock costs rose through the quarter. Renewed tanker attacks in the Strait of Hormuz and a US blockade of Iranian exports cut crude oil supply from the Gulf, lifting costs for regional refiners. Refinery operations in China stayed subdued, as seaborne arrivals remained nearly 40% below pre-war levels, which limited base oil output and kept white oil supply tight. Chinese refiners turned to Russian cargoes to fill part of the gap. However, demand from personal care and packaging users stayed cautious, which kept producers from passing on the full cost increase.
Europe
European white oil prices rose as upstream costs followed the global benchmark higher. Refinery throughput worldwide was nearly 5 million b/d below last year's level in July, and attacks on Russian refineries further reduced processing capacity, tightening the supply of base oils. In September, Saudi Arabia cancelled some crude oil deliveries to European customers after its main bypass pipeline closed, adding to supply concerns. Demand from pharmaceutical and cosmetics makers remained steady, which helped producers raise offers, though buyers avoided large purchases at higher prices.
North America
North American white oil prices displayed upward trend following the upstream markets during Q3’26. Domestic crude oil prices spiked in mid-September after the Saudi pipeline closure and new strikes on Saudi Arabia, reaching their highest level since May. US inventories also declined as emergency stock releases continued, which supported refinery feedstock costs. Steady demand from food processing, plastics and personal care sectors helped producers pass on part of the increase, while the late-September restoration of Saudi pipeline flows eased some pressure.
Analyst Insight
According to Procurement Resource, white oil prices are likely to stay firm on high upstream costs, though weak overall demand and improving supply routes may limit further increases.
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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.
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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