Weekly Asia Base Oil Price Report

Rising crude and feedstock costs, along with the challenges refiners faced in securing enough crude oil, have led to lower base oil production at several Asian facilities. Since many countries focused on maximizing fuel output, production of other refined products like base oils declined. As a result, a majority of Asian base oil producers have suspended spot offers and focused on fulfilling contractual obligations, which has proven difficult to achieve as well, forcing some suppliers to restrict sales and place customers on varying degrees of allocation.

Spot trading was largely at a standstill, with only a handful of suppliers and traders able to offer cargoes from existing inventories, but these were starting to be exhausted as most market players only keep 30 to 60 days’ worth of stocks and the conflict started just over 50 days ago. Prices have skyrocketed, making it difficult for most consumers to accept the new levels which appeared to be adjusted almost daily given the changing geopolitical scenario.

Lubricant and finished products manufacturers were hoping to implement increases to offset the increased raw material, packaging and transportation costs, but competition among suppliers and buyer resistance posed some difficulties in transferring the hikes down the supply chain. Some blenders have started to trim production as a result, and buyers have also begun to reduce purchases because of the steeper prices, which could lead to long-term demand destruction.

Experts explained that even if the war were to end and the Strait were reopened tomorrow, the long-lasting effects would be felt in oil, distillates, fertilizer, jet fuel and base oil markets — to name just a few segments — for many months. Shipping companies and their insurers are likely to be very hesitant to start sending ships through the Strait until there is clear assurance that the hostilities have ended. Many vessels that covered Middle East routes have been reassigned to other regions, and their return may take several weeks. Oil-producing countries that have reduced or halted crude production will require time to turn their wells back on and restart exports. A key base oils plant, the Shell/Qatar Petroleum gas-to-liquids facility, suffered damage from drone attacks and has been shut down, with repairs not expected to be completed for months. A couple of other facilities, Bapco and Adnoc, have also been damaged although production was heard to have recovered, but returning to full production and pre-war export levels may also take time.

Group I & II

Activity was muted in the Group I and Group II segments because a majority of producers have suspended spot offers, and those who were able to supply limited volumes have increased offer prices substantially, making it difficult for most buyers to access this material. Finding base oil supplies in other regions has also proven challenging because of long delivery times and steep freight rates. However, the vertiginous price climb observed in March seems to have slowed down, partly because crude oil prices have come down from highs observed a few weeks ago.

While most participants agreed that the market was eerily quiet, a few traders were able to get a hold of product that other traders or producers were holding in storage tanks, but some of these transactions faced logistical and transportation disruptions as well as higher freight rates, with logistics taking a lot longer than usual.

Aside from the fact that most suppliers were not offering spot cargoes because they focused on contractual commitments, a majority of refineries in Asia were running below capacity due to reduced availability of Middle East crude oil. Government mandates also required refinery operations to prioritize the production of fuels, leading to reduced base oil output, and the use of crude from alternate sources may also not offer the same yields as Middle East oil. Some plants have also started routine maintenance programs, further reducing availability.

Even though some countries like Japan have large strategic emergency oil supplies, refineries in that country were running at around 70% capacity as they waited for oil shipments from outside the Gulf, the Petroleum Association of Japan reported last week. Crude oil from North and South America and Africa would then be mixed with Middle East oil to improve yields, as Japanese refinery equipment is designed to run mainly on Middle East crude.

In South Korea, Group II producer Hyundai Oilbank-Shell was expected to stay on track with its planned maintenance program that started at the end of March and was anticipated to last until early May. The key Group II supplier exports significant amounts to countries such as China and India and had already restricted spot offers before the start of the conflict as it was preparing inventories ahead of its turnaround.

In Taiwan, the sole Group II producer, Formosa Petrochemical, was understood to be focusing on term commitments and has increased domestic list prices for a second time since the start of the month, following several increases in March. Formosa lifted prices for its 70 neutral and 150N by New Taiwan Dollars (NT$) 2.62/liter, and its 500N by NT$1.68/l, with an effective date of April 18. (NT$1.00  = US$0.03). The producer was heard to be running its base oil plant at reduced rates due to a 40-day turnaround at the crude distillation unit (CDU#2) that started in mid-March.

A key Southeast Asian Group I and Group II producer was heard to have informed customers that the company was significantly reducing term supplies in May. Some accounts had already seen reductions for March and April, but the May cuts appeared to be deeper, prompting buyers to look for alternative supplies. However, it was difficult to find other refiners able to provide additional base oil volumes as they have trimmed run rates and were only supplying term customers.

In China, Group I availability has tightened because traditional sources of product such as Thailand have dramatically reduced export shipments. Group II supplies were also scarce because supplies from South Korea and other origins were more limited. A domestic Chinese Group II producer that had halted production for several years was heard to have restarted operations to fill some of the supply gaps.

Bright stock supplies were tight and import prices have climbed in China due to reduced regional availability and higher crude oil prices. Demand has weakened as buyers were concerned whether they will be able to offset the steeper values by raising the price of lubricants and greases, as downstream price acceptance remained a challenge.

Chinese blenders have faced resistance to higher lubricant prices, and the difficulties in absorbing the steeper base oil values have prompted many to scale back production. This, in turn, has resulted in reduced base oil demand, with suppliers worrying about demand destruction and losing market share. Some domestic producers were therefore offering competitive prices to protect accounts. There were also reports of Chinese importers considering re-exports of Group II grades given attractive prices in other markets.

In India, import prices continued to climb due to reduced global base oil availability and hefty crude oil prices. Base oil shipments from the Middle East have been dramatically curtailed, although there were reports of possible cargoes moving to India from Saudi Arabia. The Saudi base oil producer is able to arrange shipments from Yanbu on the Red Sea, but other logistical challenges remained.

Prices for the Group I cuts were heard to have moved up by $50-70 per ton on a CFR India basis week-on-week, with the light grades showing the steepest increases given tighter supplies.

Group II import prices have also edged up, but by more modest amounts than the Group I cuts, with increases in the realm of $40-50/ton CFR India reported.

Group III

Given that a significant share of the world’s Group III capacity is located in the Middle East, and cargoes are not able to leave the region because of Iran’s closure of the Strait of Hormuz, global availability has declined. Furthermore, several base oil refineries have suffered Iranian drone and missile attacks, forcing producers to shut down operations temporarily or for a longer period, depending on the damages incurred. While ADNOC in Abu Dhabi and BAPCO in Bahrain were heard to be running, the Shell/Qatar Petroleum Pearl GTL plant was expected to remain shut for several months, possibly until year-end.

Considerable Group III volumes are also produced in Asia, and since many Asian Group III producers are highly dependent on Middle East crude oil to run their refineries and exports have been disrupted, some refiners were facing difficulties in running plants at full rates. Some countries have been able to import crude oil from other origins, or resorted to using strategic emergency reserves, but refiners were prioritizing fuel production for transportation and cooking needs of the general population.

The Malaysian refiner Petronas was heard to have been able to continue running its facilities at high rates because it can refine domestic crude oil, but it has restricted base oil volumes to term customers and has limited its participation in the spot market. In a press release posted on its website, Petronas confirmed that fuel supply had been secured through the end of June 2026.

In China, import prices for Group III grades on a delivered basis have surged because of an extremely tight global supply situation. Exports from the Middle East have been largely unavailable, and China is a large importer of Group III base oils from that region. Some Group III cargoes continued to reach China from South Korea and Southeast Asia, but they were more limited than usual as producers prioritized term obligations and fuel output, driving offers up. This has also supported higher prices from domestic Group III producers as many consumers have turned to them for supplies.

Import prices have also risen significantly in India this week, jumping by approximately $150-200/ton on a CFR India basis, although business was thin as spot volumes were sparce. Suppliers have also reduced allocations to term customers as they manage existing stocks very carefully.

Indian blenders have had some success transferring the higher production costs to lubricants, but buyers have become more reluctant to accept the increases. Market participants were hoping that Middle East negotiations would culminate in a peace deal this week and that the Strait would be open to vessel traffic soon, so values would come down from their elevated levels, but this will not happen overnight, sources conceded.

Shipping

• A 6,000-metric-ton lot was discussed for loading in Yeosu, South Korea, to Port Klang, Malaysia, April 27-May 5.
• About 700 tons were mentioned for shipment from South Korea to Japan between May 1-10.
• 18,000 tons were discussed for loading in Yanbu, Saudi Arabia, to West Coast India in late April.
• A 2,000-ton cargo was mentioned for shipment from Onsan to China in the second half of April.

Production

Qatar Energy halted production of liquefied natural gas (LNG) and other products following drone attacks on its facilities in Ras Laffan and Mesaieed on March 3. The facility will not be able to return to normal production for several years, and has declared force majeure on LNG shipments, according to the company’s website. The Shell/Qatar Petroleum Pearl gas-to-liquids base oil unit in Ras Laffan, which suffered some damage during an attack as well, was heard to be shut down. The unit utilizes natural gas from the Qatar Energy refinery to produce Group III base oils. The plant has a nameplate capacity of 1,372,000 metric tons of Group II/Group III base oils and its shutdown caused global availability of Group III base oils to tighten significantly. The plant was expected to remain shut down for several months.

Fire erupted at Bapco’s refinery in Maameer, Bahrain, on March 5 following an Iranian attack. The country’s Ministry of Interior reported that the fire had been brought under control without providing further details about potential damages. Bapco operates a 400,000-tons-per-year Group III base oil facility in Sitra, within the Bapco refinery complex. Sources familiar with the plant’s operations said that Group III production was unaffected by the fire, but some reports indicated that production had stopped for damage assessments and had been restarted. An official report was not available by the publishing deadline.

In the United Arab Emirates, a suspected drone strike triggered a fire at the Ruwais Industrial Complex, leading authorities to shut down the country’s flagship refinery as a precautionary measure. The Ruwais complex houses Adnoc’s Group II and Group III base oils plant. According to sources familiar with Adnoc’s operations, the base oil unit was not damaged during the drone attack as only one train of the refinery had been affected by the strike, although it was reportedly running at reduced rates.

The latest plant turnaround information for 2026 is provided below, along with turnarounds that took place in the second half of 2025 as they may have impacted base oil pricing at the time of completion and beyond.

Group I

• Pertamina was expected to embark on a one-month turnaround at its Group I plant in Cilacap, Indonesia, in April, but it could not be confirmed whether the shutdown will proceed as planned.
• Eneos’ plant in Kainan, Japan, suffered an unplanned shutdown in February 2026. The company’s Mizushima A plant underwent maintenance from October to November 2025.
• Two Eneos Group I plants were permanently closed in recent years.
• Luberef scheduled a 30-day turnaround at its Group I/Group II plant in Yanbu, Saudi Arabia, in August 2026. The company had previously completed maintenance at the unit from mid-November until December 2025. The plant underwent an expansion in 2017. 
• Luberef has secured a new feedstock supply agreement for the company’s Jeddah facility. The facility had been expected to close by mid-2026, but the new supply agreement will allow it to continue operations beyond 2026. As a result, the company will maintain its current production capacity of 275,000 tons per year of Group I base oils. With the completion of the Growth-II Project in Yanbu, Luberef’s total production capacity will reach 1.53 million tons per year, making it the only supplier in the region able to offer Group I, Group II, and Group III base oils.
• PetroChina’s Dalian refinery began a permanent shutdown in 2023. The base oils unit closed in late 2024, with full closure completed in July 2025. Inventory clearance was scheduled by end of August 2025.
• CNPC’s Fushun plant in Liaoning was expected to increase Group I production to offset the Dalian closure. Bright stock capacity is estimated at 60,000 t/y.

Group II

• Hyundai Oilbank Shell Base Oils shut down its plant in Daesan, South Korea, in early April 2026 for approximately 45 days. The plant had run at reduced rates for several days in February due to a technical problem.
• GS Caltex had a partial shutdown at its Group II plant in Yeosu, South Korea, in mid-March.
• CNOOC has scheduled a turnaround at its Taizhou, China, plant in the second quarter of 2026.
• State-owned Sinopec Jingmen Co. plans to have a turnaround at its plant in Jingmen City, China, in November 2026. It is the largest production plant for base oils and waxes in Central-South China.
• Formosa Petrochemical postponed a scheduled turnaround and catalyst change at its Mailiao, Taiwan, plant from the fourth quarter of 2025 to third quarter of 2026.
• ExxonMobil completed a capacity expansion at its Singapore Resid Upgrade Project and commenced on-spec production in August 2025. The producer has started to offer an ultra-heavy Group II grade with similar characteristics to bright stock. The project is an upgrade of the company’s integrated manufacturing complex, which will allow it to expand large-scale production of its global EHC Group II slate and meet growing demand for high-performance lubricants in the Asia-Pacific region, the company said.
• Indian Oil Corp. was understood to have completed a one-month turnaround at its Group II plant in Haldia in November 2025. The producer also completed an expansion of its Group III capacity in Haldia in December 2025.

Group III

• Petronas has postponed a turnaround at its Group II/III Melaka plant in Malaysia from June to August 2026.
• SK-Pertamina will be completing a 40-day turnaround at its plant in Dumai, Indonesia, in May 2026. A fire at SK-Pertamina’s refinery broke out on October 1, 2025, but was quickly extinguished, with no impact to base oil supply reported. The Dumai Group III base oil plant was shut down for maintenance after the fire and was restarted shortly after. Term supplies were not expected to have been affected. Pertamina also operates a Group I plant in Cilacap, Indonesia. The Dumai refinery is a joint venture between Indonesian state-run Kilang Pertamina Internasional and South Korean producer SK Enmove.
• Indian Oil Corp. completed an expansion of its Group III capacity in Haldia and a start-up of the expanded plant was achieved in December 2025.
• The restart of Shanxi Lu’an’s base oil plant following an unplanned shutdown in December 2025 should bring more Group III supplies to the market in early 2026.

Prices

Crude Oil
Crude oil futures surged on Monday as a U.S. Navy destroyer attacked and seized an Iranian-flagged ship that was trying to evade the U.S. blockade on Iranian ports. Iran had said it would open the Strait of Hormuz during a 10-day ceasefire, but reversed its decision after the ship incident. The cease-fire between the U.S. and Iran is set to expire on April 22. Crude prices had slipped the previous week on expectations that the war would come to an end following negotiations between the U.S. and Iran in Pakistan, but no agreement was reached.

• Brent June 2026 futures were trading at $93.98 per barrel on April 20, down from $102.36/bbl for front-month futures on April 13 (ICE Futures Europe).
• Dubai crude futures (Platts) for May 2026 settled at $84.66/bbl on April 17, down from $90.76/bbl for front-month futures on April 10 (CME).

Base Oils
Spot base oil prices in Asia continued to climb due to high feedstock and crude oil prices and tight supplies. Prices have been notionally adjusted up to reflect current market conditions and sentiment, but trading remained muted as producers have generally withdrawn spot offers.

The price ranges portrayed below reflect discussions, bids and offers, as well as deals and published prices widely regarded as benchmarks for the region.

Ex-tank Singapore

Group I
Solvent neutral 150 assessed higher by $120/t at $1,760/t-$1,800/t
SN500 up by $120/t as well at $1,760/t-$1,800/t
Bright stock assessed up by $50/t at $1,920-$1,960/t

Group II
150N adjusted up by $120/t to $1,830/t-$1,870/t
500N assessed up by $120/t at $1,820/t-$1,870/t

FOB Asia

Group I
SN150 jumped by $130/t to $1,600/t-$1,640/t
SN500 up by $140/t to $1,600/t-$1,640/t
Bright stock prices assessed higher by $140/t at $1,870/t-$1,910/t

Group II
150N assessments increased by $140/t to $1,710/t-$1,750/t
500N higher by $140/t at $1,700/t-$1,740/t

Group III grades also surged this week
4 cSt higher by $160/t at $2,050/t-$2,090/t
6 cSt up by $160/t at $2,030/t-$2,070/t
8 cSt assessed up by $160/t at $1,890/t-$1,930/t

Gabriela Wheeler can be reached at gabriela@LubesnGreases.com

Lubes’n’Greases shall not be liable for commercial decisions based on the contents of this report.