Lubricating Oils
Sourcing Guide & Market Intelligence

Tariffs to negatively impact the fuel additives, lubricants, and anti-corrosive materials sector

• The United States imposed a blanket 10.0% tariff on all US imports, a 25.0% tariff on goods imported from Mexico and Canada, and a 10.0% tariff on energy imports from Canada. According to the Energy Information Administration, Canada and Mexico account for 71.2% of US crude oil imports, 35.7% of US petroleum product imports, and 99.6% of US natural gas imports.
• With the increase in tariff rates, as well as retaliatory tariffs imposed by affected countries, oil, gasoline, diesel, and natural gas prices have been falling due to concerns about slowing global economic growth and energy demand. Falling oil and gas prices could put downward pressure on prices for fuel additives, lubricants, and anti-corrosive materials, as these products are derived from petroleum.
• Tariffs on steel and aluminum and falling oil prices have increased vendor risk for upstream suppliers in the sector; according to the New York Times, tariffs on steel have pushed up the cost of new wells by 10.0% to 20.0%. According to S&P Global, oil country tubular goods, made from steel, are anticipated to rise 15.0% with the increase in tariffs, and since these expenses account for 8.0% to 10.0% of drilling and completion costs, the fuel additives, lubricants, and anti-corrosive materials supply chain will see increased risk of disruption.
• US tariffs are expected to reduce imports and increase domestic prices for fuel additives, lubricants, and anti-corrosive materials such as biodiesel, ethanol, propane, and butane as Canada and Mexico are key suppliers of these products. According to Butane-Propane News, Canada supplies one of every seven barrels of propane used in the United States, and Canada accounts for 71.8% of US antifreeze imports.
• The tariffs on Canada and Mexico negatively impact US refiners as Canada accounts for 27.0% of total US refinery demand and some refineries are dependent on heavier or sour grades of crude oil from Canada. As refiners’ margins are squeezed with higher costs for imports and falling demand, prices for refined fuel additives, lubricants, and anti-corrosive materials will likely rise as refiners look to maintain profitability.

Crude oil prices dip, but natural gas and fuel prices remain volatile in 2025

• Oil prices have been falling with the introduction of higher tariffs and the predicted decline in global demand. The OPEC+ group of countries also announced they would be unwinding production cuts and increasing their collective output target for May by 411,000 barrels per day.
• Trade wars, ongoing conflict between Hamas and Israel, and general unrest in the Middle East are causing uncertainty surrounding oil prices, which has led to volatility in prices. In the third week of May 2025, crude oil prices hit $63.67 per barrel, but volatility remains as geopolitical concerns remain.
• Natural gas prices rallied early in 2025 with colder-than-usual temperatures in the United States and high demand, topping out at $4.68/MMBtu in March. Prices have since fallen with the onset of trade wars and weakening demand projections to $3.64/MMBtu in the third week of May 2025.
• The national average of gasoline prices has been rising slightly due to refinery maintenance/outages and blending issues, hitting a national average of $3.15 per gallon in the third week of May 2025. However, gasoline futures have been volatile, falling due to fears of oversupply and deepening concerns about weakening demand with tariffs, but rising after trade deals.