Weekly Asia Base Oil Price Report

Meanwhile, the war in Iran did not seem closer to coming to an end as hostilities resumed, with fresh explosions reported in the Strait of Hormuz and an oil tanker ostensibly hit by a ballistic missile over the weekend. United States president Donald Trump said an Iranian proposal to reopen the Strait of Hormuz to commercial shipping within a week under certain conditions had been rejected.

Crude oil futures fell early in the week as crude oil exports from the Middle East increased and the leaders of the Group of Seven agreed to release up to 100 million barrels of diesel and crude oil. Saudi Arabia unexpectedly cut its November crude oil prices to Asia to six-year lows. Brent futures were hovering near $102 per barrel on Monday, down from around $108/bbl a week ago.

Group I

Group I base oil spot prices were generally stable, with trade remaining thin as refiners worried about potential crude oil supply shortages given that attacks on vessels in the Strait of Hormuz intensified over the week, and Houthi rebel threats against Saudi Arabian oil shipments continued.

Asian manufacturers also expressed concerns about surging oil and fuel costs and the difficulties in transferring the higher production costs down the supply chain. The steep climb in gasoil/diesel prices might impact refining economics and refiners may favor diesel production versus that of base oils. Producers were also prioritizing base oil term obligations and have suspended spot offers, and while most commitments are being met, there were concerns that these volumes could be trimmed in the near future if refineries are unable to secure enough crude oil.

There were no fresh spot offers heard from a Thai supplier who regularly offers flexibag volumes of Group I base oils. Regional producers were holding off on offering spot supplies due to increased concerns about crude oil availability as the turmoil in the Middle East threatened shipments.

At the same time, demand has been lackluster as consumers preferred to use up existing inventories before going after fresh cargoes. India may be an exception in that buying interest has picked up following a period of reduced activity during the monsoon season. This demand pick-up, together with firm feedstock values, placed upward pressure on domestic prices, with October list levels heard to have been adjusted up. A turnaround at an Indian plant in the last quarter might tighten availabilty, offering further support to pricing.

With the uncertainties that foreign shipments were still exposed to, many Indian buyers preferred to secure locally-produced material as there were fewer logistical risks involved. Group I import prices edged up by $5-10 per metric ton on a CFR India basis for most grades, although bright stock appeared to be under downward pressure because of plentiful domestic supplies. Group I SN150 prices were heard discussed around $1,370-1,380/ton CFR India for October shipment; SN 500 was discussed closer to $1,400/ton CFR India. Bright stock was hovering near $1,580-1,630/ton CFR India.

In China, spot discussions slowed ahead of the National Day holidays celebrated Oct. 1-7. Base oil prices remained exposed to upward pressure because of ongoing shipping disruptions in the Middle East and U.S. sanctions on Iranian crude oil exports. Many Chinese refiners depend on these feedstocks to run their refineries.

Distributors reduced the price of some imports to incentivize sales ahead of the holidays, with bright stock seeing the largest adjustments. At the same time, distributors were concerned about securing too many fresh cargoes that they might not be able to sell once participants returned to business, as base oil purchases slow in the fourth quarter. This might also coincide with a reduction of exports from origins such as Thailand, since producers there may prioritize domestic and term commitments over exports, and there may be an increase of diesel output at local refineries as international prices have skyrocketed on extremely tight fundamentals.

Buying interest had waned in the previous two weeks in China, with blenders expressing concern that they would be unable to recover the higher production costs seen of late by increasing the price of lubricants and finished products, as competition was strong and buyers resisted the steeper prices. There were also expectations that domestic supplies would improve as a producer, Karamay Petrochemical, has completed a turnaround.

Group II

Group II prices were stable-to-firm and few offers were bandied about as producers  were still concerned about crude oil supply disruptions in the Middle East. Some producers are able to use crude from diverse origins because refineries have been built with that flexibility, but some units run heavily on Arab oil, relying on the Middle East for about 60% of their total crude supply. These plants were built specifically to process medium-to-heavy sour crude from suppliers like Saudi Arabia, Iraq, and the UAE.

Saudi Arabian crude oil accounted for less than 30 percent of South Korea’s crude imports this year amid efforts by local refiners to diversify their sources of crude following geopolitical risks in the Middle East, an article by Yonhap News Agency said, referring to recent industry data.

While Saudi producer Saudi Aramco has restarted its East-West pipeline, ongoing Houthi threats to crude oil and products shipments out of Yanbu could affect oil supplies in the coming weeks. Additionally, gasoil/diesel supply shortages and skyrocketing prices were also expected to impact refinery decisions, causing some refiners to prioritize diesel production over that of other refined products such as base oils.

Saudi Arabia also exports Group I and Group II grades to various Asian destinations, including large volumes to India, and supplies may be restricted due to the current shipping disruptions and because of a 30-day shutdown at the Saudi plant in Yanbu that was expected to start on October 1, although sources indicated that the base oils plant had already started a partial shutdown earlier.

As was the case with Group I cuts, demand has slowed down in some nations, but it has picked up in India, where buyers have returned to the market as the end of the monsoon season approached, and many buyers were in need to replenish inventories. Most buying interest appeared to be focused on South Korean cargoes, with one supplier having restricted spot offers the previous week because of crude supply concerns. Taiwanese offers were largely absent because the sole Taiwanese producer will be starting a turnaround in mid-October and it was striving to build inventories to cover contract commitments. This turnaround may tighten spot supplies until the end of the year.

Import prices for the 70N grade edged up by $20-30/ton on firm gasoil prices, while the 150N and 500N grades moved up by around $20/ton on a CFR India basis week on week.

Domestic supplies of Group II grades were also heard to have tightened in India. This was partly attributed to a key producer trimming Group II output in favor of Group III grades because of higher margins and export opportunities. A scheduled turnaround in the last quarter of the year may tighten supplies further. A domestic refiner increased its list prices in October, following markups in September as well.

In China, buying appetite has abated due to National Day holidays. Some buyers had replenished stocks ahead of the celebrations because they were worried about availability upon their return to business. The return to operations of a couple of domestic plants also seemed to be reassuring. Hainan Handi Sunshine was heard to have restarted its Group II plant in late September and was expected to offer spot supplies after the National Day holidays.

Some suppliers had been anxious to lower inventories ahead of the holidays, and adjusted down their price expectations so as to attract buyers.

Group III

Group III prices continued to be exposed to upward pressure due to the extremely tight global supply situation brought on by production and shipping disruptions in the Middle East. But prices were reported as unchanged from the previous week because of muted business and buyers’ resistance to higher prices.

The supply constraints were not expected to change in the short term. Iran held its chokehold on the Strait of Hormuz and a very small number of vessels appeared to be able to cross the waterway safely. The official distributor of Abu Dhabi producer Adnoc’s material in the U.S. was understood to have loaded products in Abu Dhabi and sailed a vessel through the Strait of Hormuz, with the cargo expected to arrive in the U.S. in late October. But further operations were expected to be risky and there was no guarantee that other vessels could be loaded from Abu Dhabi, Bahrain or Qatar. Group III production in these countries remained mostly shut down or being run at reduced rates, keeping upward pressure on prices. Escalating turmoil surrounding crude oil shipments from Saudi Arabia and attacks on vessels in the Red Sea intensified concerns about the slim likelihood of returning to normal conditions soon.

The Middle East supply turmoil, together with current and upcoming turnarounds in Asia and other regions were expected to exacerbate the product shortages.

A Malaysian Group III producer was understood to have scheduled a 45-day turnaround at its plant in Malacca that started in the second half of August and was expected to be completed in early October, although spot supplies were not likely to be available for some time. No confirmation could be obtained from the producer directly.

The joint venture production site operated by Repsol/SK Enmove in Spain has shut down 4 cSt production and supplies were not expected to recover until November, although the 6 cSt and 8 cSt cuts seemed more plentiful, not only in Spain, but in other regions as well.

In China, the domestic coal-to-liquids producer has raised prices because of tight availability, particularly of the 4 cSt cut. These prices were supported by a lack of import cargoes. South Korean producers were alloting production to covering term obligations and had little extra product to offer. Even though domestic prices have inched up, they were still deemed more competitive than import prices. Demand was somewhat subdued due to the National Day holidays this week.

In India, Group III 4 cSt, 6 cSt and 8 cSt import prices saw modest increases of $5/ton on a CFR India basis as numbers had seen hefty increases the previous week. Acceptance of these values had been limited, as most blenders were unable to recoup the steep increases from downstream segments given consumer resistance. Some blenders had no choice but to secure these prices because of strict product formulations, but many consumers tried to secure domestic supplies as well as Chinese Group III volumes as prices were considered competitive. On the other hand, offers of products of South Korean origin appeared to attract less buying appetite because of pricing and volumes were very limited.

Shipping

A number of base oil cargoes were discussed during the week, and additional details about a shipment also emerged:

• 6,000-ton cargo expected to be shipped from Ulsan, South Korea, to Chennai, India, Oct. 1-4, on the Ginga Hammerhead.
• 4,000-5,000 tons mentioned for possible shipment from Ulsan to Karachi, Pakistan,  second half October.
• Second parcel of 2,500-tons also under consideration for shipment from Pyeongtaek, South Korea, to Karachi early October.
• 5,000-12,000 tons expected to be loaded in Daesan, South Korea, to West Coast India, Oct. 16-31.
• 6,000-7,000-ton cargodiscussed for shipment fron Onsan, South Korea, to Mumbai, India, mid October.
• 1,500-ton lot mentioned for shipment from Onsan to Singapore, Oct. 5-15.
• 2,000-ton parcel was expected to be shipped from Port Kelang, Malaysia, to Genoa, Italy, second half Oct.
• 5,000-ton cargo on the table for shipment from Tianjin, China, to Houston, U.S., #een Oct. 20-30.
• 6,000-ton lot quoted for prompt shipment from Rayong, Thailand, to West Coast India.
• 6,000-ton cargo mentioned for shipment from West Coast India to Nigeria, late Oct.
• 2,000-ton parcel mentioned for loading in Yeosu, South Korea, to Dong Nai, Vietnam, in October.
• 3,000-ton lot quoted for possible lifting in Ulsan to Colombo, Sri Lanka, first half October.
• 7,000-10,000 tons discussed for shipment from Daesan, South Korea, to Mumbai in October.
• 9,000-11,000 tons also being considered for shipment from South Korea to the U.S. Gulf Coast, end October.

20,000-ton cargo discussed for lifting in Port Klang, Malaysia, to Savannah, U.S., Oct. 15-25.

• 8,000-ton lot on the table for shipment from Maoming, China, to Lagos, Nigeria, in October.

Production

Persian Gulf
Qatar Energy halted production of liquid natural gas (LNG) and other products following drone attacks on its facilities in Ras Laffan and Mesaieed in early March. The facility will not be able to return to normal production for several months, and has declared force majeure on LNG shipments, according to the company’s website. One train at 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 stocks. The damaged train was expected to remain shut down for several months until repairs to the highly specialized equipment are completed.

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-metric 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. An official report was not available by the publishing deadline.

In Abu Dhabi, United Arab Emirates, a suspected drone strike had triggered a fire at the Ruwais Industrial Complex, leading authorities to shut down the country’s flagship refinery as a precautionary measure on March 10. 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 producer appeared to have been able to maintain base oils output for its own downstream lubricant operations. The latest information indicates that ADNOC was preparing to ramp up production following news of a ceasefire in the Middle East in late June, although these plans have been derailed by a resumption in hostilities and renewed closing of the Strait of Hormuz on July 8. The distributor of ADNOC material in the U.S. was compelled to declare force majeure on contract shipments as no fresh base oil cargoes have been able to be lifted in Abu Dhabi.

The latest plant turnaround information for 2026 is provided below, along with plant shutdowns 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

• Luberef postponed a 30-day turnaround at its Group I/Group II plant in Yanbu, Saudi Arabia, from August to October 2026. The shutdown will only affect Group II production, according to sources. A partial shutdown had already started, according to market sources. The company had previously completed maintenance at the unit from mid-November until December 2025.
• 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 Karamay started a turnaround at its Group I and naphthenic base oils plant in Xinjiang, China, in August that was completed in late September.
• CNOOC Taizhou started a turnaround at its Group I/II plant in Jiangsu, China, in mid-April that was expected to have been completed in mid-June.
• Petrochina Fushun completed a turnaround in May at its Group I plant in Fushun, China.
• Idemitsu started a scheduled turnaround at its Group I plant in Chiba, Japan, in mid-May that lasted until July. The company secures Group III base oils required for its high-performance and eco-friendly engine lubricants through a partnership and a memorandum of understanding with Saudi Aramco Base Oil Company.
• 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 Japan in recent years.
• Pertamina reportedly completed a one-month turnaround at its Group I plant in Cilacap, Indonesia, in April 2026.
• CNPC’s Fushun plant in Liaoning was expected to increase Group I production to offset the closure of a plant in Dalian. Bright stock capacity is estimated at 60,000 t/y.

Group II

• Formosa postponed a scheduled turnaround and catalyst change from the Q4 2025 to mid-October 2026. The shutdown was expected to last until early December. The producer had unexpectedly shut down its Group II base oils plant in Mailiao, Taiwan, in early July due to feedstock supply issues given technical problems at the affiliated refinery, but restarted production the second week of July.
• Petronas was heard to have postponed a turnaround at its Group II/III Melaka plant in Malaysia from June to the second half of August 2026, with a restart expected in early October.
• State-owned Sinopec Jingmen Co. plans to have a turnaround at its plant in Jingmen City, China, starting in mid-November 2026 until mid-January 2027. It is the largest production plant for base oils and waxes in Central-South China.
• 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. The turnaround was completed around May 8 and spot shipments were expected to have resumed in June.
• GS Caltex shut down its Group II/Group III plant in Yeosu, South Korea, in early May to complete a month-long turnaround. The plant was restarted in June.
• CNOOC scheduled a turnaround at its Taizhou, China, plant in the second 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, and was expected to complete a Group II/Group III expansion at Gujarat in the third quarter of 2026.

Group III

• Petronas was heard to have postponed a turnaround at its Group II/III Melaka plant in Malaysia from June to the second half of August 2026, with a restart expected in early October.
• SK-Pertamina (Patra SK) completed a 40-day turnaround at its plant in Dumai, Indonesia, from early May to mid-June 2026.
• In China, Shanxi Lu’an started a partial turnaround at its plant in Changzhi in early September and restarted at the end of the month.
• Also in China, Hongrun Petrochemical started a shutdown at its plant in Weifang in early July and completed it in late September.
• 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 was expected to bring more Group III supplies to the market in early 2026.

Prices

Crude Oil

Crude oil futures slipped on Monday as crude oil flows from the Middle East seemed to be improving, but attacks on vessels showed a resurgence, keeping pressure on prices.

• Brent December futures were trading at $102.46 per barrel on October 5, down from $108.48/bbl for front-month futures on Sep. 28 (ICE Futures Europe).
• Dubai crude futures (Platts) for November 2026 settled at $99.83/bbl on Oct. 1, down from $100.46/bbl for front-month futures on Sep. 25 (CME).

Base Oils

Spot base oil prices in Asia were steady-to-firm this week, with Group I and Group II receiving support from a limited number of spot offers and Group III prices stabilizing because of buyers’ resistance to higher offers amid persistently tight fundamentals and regional shortages. Prices have been notionally adjusted to reflect current market conditions and sentiment, but trading continued to be limited and transactions remained difficult to track, especially for Group III grades, as there were hardly any spot volumes to be obtained.

The price assessments 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 steady at $1,480/t-$1,520/t
SN500 also unchanged from a week ago at $1,520/t-$1,560/t
Bright stock firm at $1,690-$1,730/t.

Group II
150N higher by $10/t at $1,660/t-$1,700/t
500N also edged up by $10/t to $1,670/t-$1,710/t

FOB Asia

Group I
SN150 was assessed unchanged from the previous week at $1,280/t-$1,320/t
SN500 holding at $1,300/t-$1,340/t
Bright stock prices steady at $1,460/t-$1,500/t

Group II
150N assessments hovering at $1,530/t-$1,570/t
500N was also steady at $1,560/t-$1,600/t

Group III
4 cSt stable at $3,640/t-$3,680/t
6 cSt holding at $3,630/t-$3,680/t
8 cSt assessed at $3,470/t-$3,510/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.