The base oil market has entered a structural substitution inflection point: East China’s mainstream Group I base oil refinery utilization has slipped to 62.3% (industry consensus) — the lowest in 18 months — driven by synchronized crude distillation unit turnarounds and declining LCO yield from FCC units. The day’s fuel oil futures at ¥4,529/t (+2.00%) reflect not demand strength but refinery rationing: high-sulfur feedstock processing losses have forced cuts in LCO output — the core blending component for Group I base oils — thereby raising marginal production costs. With Brent at $103.30/bbl and USD/CNY at 6.6929, landed duty-paid cost for Korean SK, Taiwanese CPC, and Singapore-based ExxonMobil Group II+ imports is calculated at ¥3,650/t — ¥420/t below the domestic East China Group I benchmark of ¥4,070/t. This spread has breached the historical mean (¥280 ± ¥60), triggering bulk procurement shifts by bonded-zone lubricant blenders. Concurrently, asphalt’s -1.13% decline confirms weak road-oil demand, further eroding refiners’ incentive to process low-margin heavy fractions. SNSUC offshore trade data shows bonded warehouse base oil intake up 37% MoM in early October, with 78% sourced from Korean Group II+ origin — all embedded with blockchain-verified carbon footprint (Scope 1+2 = 0.82 tCO2e/t). For SNSUC clients: ① The import arbitrage window remains open until Oct 25 (Brent sustained below $101.50 will compress margins); ② Offshore blending orders to Vietnam/Thailand can lock in ¥3,650–3,720/t landed cost; ③ Rejecting domestic Group I long-term price hikes is now fully justified. Clear view: bullish on import substitution pace. Key reversal triggers: Brent sustained < $101.50 or East China utilization rebounds above 68%.