Weekly Asia Base Oil Price Report

Meanwhile, Iran has continued to target commercial vessels in the Arabian Gulf and the Gulf of Oman, with drone strikes hitting a tanker in Sohar and two more in the Strait of Hormuz over the weekend. The growing attacks on vessels, together with the Houthi missile strikes in Saudi Arabia, sent Brent to new highs above $105 per barrel on Monday, Oct. 12. This upward price trend, together with current fundamentals, supported stable-to-firm base oil prices.

Group I

API Group I base oil spot prices were assessed as stable to slightly firmer because of a dearth in spot offers as suppliers have largely withdrawn spot offers, while climbing crude oil and feedstock values offered support to pricing. Iranian attacks on vessels in the Strait of Hormuz intensified over the week, while Houthi strikes also escalated, threatening crude oil and refined products shipments and fanning concerns about potential Saudi crude oil supply shortages. While many refiners have diversified the source of their crude oil, national reserves have been run down and there were concerns that refineries might have to trim run rates if they are unable to secure enough crude oil from the Middle East.

At the same time, base oil demand was somewhat soft because buyers were mostly interested in securing small volumes to run day-to-day operations and not risk holding pricey inventories that may lose value at a later date. Indian consumers may be an exception in that many have depleted inventories during the monsoon season and were now in need of replenishments.

However, offers of flexibag cargoes from the usual suppliers in Southeast Asia, such as Thailand, and from Saudi Arabia were few and far between. Most buyers appeared able to continue running plants with volumes acquired under contract — at least for the time being — or sought domestic supplies in the case of India and China.

In China, spot discussions were expected to pick up following the National Day holidays celebrated Oct. 1-7. Bright stock continued to be the center of attention as it is typically scarce in China, with domestic production not considered sufficient to meet all requirements. This was a particular concern while a key producer was undergoing a turnaround, which has now been completed, allowing the supplier to bring more bright stock into the market. A producer offered bright stock through a tender at levels below those for Thai material. Offers of imported Group I grades were deemed too high compared to local supplies and buying interest was therefore subdued.

Chinese base oil prices remained exposed to upward pressure because of U.S. sanctions on Iranian crude oil exports and climbing international prices. Many Chinese refiners depend on these feedstocks to run their refineries. But domestic posted prices were reported as mostly stable from the previous week, with one producer slightly increasing Group II 150N prices from a week ago.

Given the regional supply tightening and threats on Saudi Arabian shipments, which continued to be moved out of the Red Sea, but had to be rerouted, taking longer to reach their destination, Indian buyers showed a preference for locally produced material. Import prices edged up given limited offers, making them less attractive compared to domestic products. Imported Group I SN150 edged up by U.S.$20-$30 per metric ton week on week, while the SN500 underwent steeper increases of around $30-$40/ton on a CFR India basis. Bright stock was stable as buyers had higher inventories and demand for this grade tends to decline during the winter months in Asia.

In related market news, India’s government has set new, stricter rules that affect the Corporate Average Fuel Economy (CAFE-III) norms set to go into effect from April 1, 2027. The framework, which will remain applicable until March 31, 2032, covers new passenger vehicles manufactured or imported for sale in India, The Times of India reported. The new framework changes how manufacturers can meet their fuel-efficiency requirements. Along with annual fuel-consumption targets, it provides credit trading, super credits for cleaner vehicles, carbon-neutrality factors for certain fuels and credits for specific fuel-saving technologies.

Group II
Group II prices were generally stable but have started to come under pressure as some suppliers strove to compete in other regions such as the Americas, where recent South Korean cargoes have been offered at attractive prices compared to U.S. shipments.

But spot offers were also limited in number because some producers are highly dependent on Middle Eastern crude oil, and the ongoing turbulence that is affecting shipments from Saudi Arabia and Persian Gulf refiners have led to mounting concerns about supply problems in the coming weeks. Other Asian refiners are able to use crude from diverse origins because refineries have been built with that flexibility, but this may alter their yields.

Taiwanese spot offers were unavailable because the sole Taiwanese producer will be starting a turnaround this week and it was focusing on building inventories to cover contract commitments. This turnaround may tighten spot supplies until the end of the year, although the producer may offer some spot availability in November. The producer has maintained discounts on term supplies unchanged from the previous month.

Saudi producer Saudi Aramco has restarted its East-West pipeline following attacks on its facilities, but ongoing Houthi threats to crude oil and products shipments out of Red Sea ports could affect oil supplies in the coming weeks. Additionally, gasoil/diesel supply shortages and skyrocketing prices were also expected to impact refinery operations, causing some refiners to prioritize diesel production over that of other refined products such as base oils. This was the case of a key South Korean refiner, sources noted, which has tightened its export availability.

Group I and Group II exports from Saudi Arabia may also be affected 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 and it would be affecting Group II grades mainly.

India typically receives large volumes of base oils from Saudi Arabia, but by far the most Group II imports are from South Korea. However, a key South Korean exporter has curtailed its exports this month as it is producing more diesel given global supply shortages and soaring prices. 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 this quarter may tighten supplies further.

Many Indian consumers have turned to domestic supplies of Group II as an alternative to imports, but domestic production is not sufficient to meet all requirements. While domestic pricing is usually more competitive than that of imported material, local producers have also adjusted prices up, particularly because of the light grade due to steep gasoil/diesel values. Group II light grade imports have jumped by $40-60/ton, while the heavy-visosity grade 500N underwent more moderate adjustments of around $10-20/ton, all on a CFR India basis.

In China, buying interest for imported products remained lackluster following the National Day holidays because demand tends to slow down in the last quarter, and the price of imports was not as competitive as domestic base oils. Increased domestic volumes were expected to hit the market as Hainan Handi Sunshine was heard to have restarted its Group II plant in late September and was expected to offer spot supplies after last week’s holidays.

At the same time, regional exporters have set their sights on other markets where netbacks were more attractive, and they have also restricted spot offers given crude supply uncertainties and the need to ensure that contract commitments were met. Chinese spot export offers were also not considered competitive as domestic refiners have increased their price expectations.

Group III
Even though Group III prices were still experiencing upward pressure due to global supply shortages and no changes to the supply situation in the Persian Gulf, spot prices did not show much upward movement because of increasing buyer resistance to steeper prices, following massive weekly increases since the beginning of the U.S.-Israel-Iran war in late February.

Participants were not particularly optimistic that the strained supply situation would improve soon. On the contrary, with the latest flare-up in hostilities and a stronger Iranian chokehold on the Strait of Hormuz as Tehran has targeted an increased number of vessels, marine exports from Abu Dhabi, Bahrain and Qatar were not expected to resume for quite some time. Base oil plants in these countries were heard to be shut down or running at reduced rates, with some shipments being able to be moved to neighboring countries by truck.

The fact that the official distributor of Abu Dhabi producer Adnoc’s material in the U.S. had been able to load products in Abu Dhabi and sail a vessel through the Strait of Hormuz was seen as an exception, as further movements appeared risky. The latest attacks on vessels near Hormuz resulted in at least two Indian seafarers going missing and substantial physical damage to the vessel, sending freight and insurance premiums higher.

The Middle East supply disruptions, together with current and upcoming turnarounds in Asia and other regions have partly exacerbated the product shortages, but at least one plant was expected to resume production.

The Malaysian Group III producer that had scheduled a 45-day turnaround at its plant in Malacca that started in late August was heard to have restarted production, although spot supplies were not likely to be available immediately. 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. Domestic producers were also facing crude supply uncertainties and climbing feedstock prices, which lent support to the current base oil values. A dearth of import cargoes offered further support. South Korean producers were allotting production to covering term obligations and had little extra product to offer for spot business.

In India, Group III 4 cSt, 6 cSt and 8 cSt import prices jumped by around $20/ton on a CFR India basis. Some blenders have no choice but to pay the higher price of imports due to specific approvals, but others tried to source domestic Group III molecules because they were offered at more competitive levels and were exposed to fewer logistical risks.

Shipping

Several base oil cargoes were on the table for shipment this month and the next, with a couple understood to be intra-company movements. Some of the transactions below involve not only Asian shipments, but Middle East movements as well.

• 16,000-ton lot expected to be shipped from Ulsan, South Korea, to Mumbai, Hazira and JNPT, India, on the Niseko Galaxy, Sept. 25-Oct 2.
• 10,000-metric ton parcel expected to be shipped from Singapore to Amsterdam-Rotterdam-Antwerp (ARA), Oct. 20-30.
• 7,500-ton cargo quoted for lifting in Yanbu, Saudi Arabia, to West Coast India and Singapore, Oct. 25.
• 4,000-ton cargo expected to load in Haldia to Chittagong, Bangladesh, on the Dai Quang, Oct. 5-7.
• 18,000-20,000 tons expected to load in Sitra, Bahrain, for Fujairah, UAE, Oct. 10-15.
• 3,000-ton cargo discussed for shipment from Port Klang, Malaysia, to Genoa, Italy, and Hemiksem, Belgium, Oct. 20.
• 10,000-ton lot expected to load in Yanbu and Jeddah, Saudi Arabia, to Lagos, Nigeria, Oct. 20-30.
• 4,000-5,000 tons mentioned for possible shipment from Ulsan to Karachi, Pakistan, second half October
• 5,000-12,000 tons expected to be loaded in Daesan, South Korea, to West Coast India, Oct. 16-31.
• 2,000-ton parcel expected to be shipped from Port Kelang, Malaysia, to Genoa, Italy, second half October.
• 5,000-ton cargo on the table for shipment from Tianjin, China, to Houston, U.S., Oct. 20-30.
• 2,000-ton parcel mentioned for loading in Yeosu, South Korea, to Dong Nai, Vietnam, October.
• 3,000-ton lot quoted for possible lifting in Ulsan to Colombo, Sri Loberanka, first half Oct.
• 7,000-10,000 tons discussed for shipment from Daesan, South Korea, to Mumbai in October.
• 9,000-11,000 tons 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.

Production

Persian Gulf plants

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 damage. 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 oil’s 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 (MOU) with Saudi Aramco Base Oil Company (Luberef).
• 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 fourth quarter of 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 the turnaround reported to have been completed 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 the turnaround reported to have been completed in early October.
• 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.
• SK-Pertamina (Patra SK) completed a 40-day turnaround at its plant in Dumai, Indonesia, from early May to mid-June 2026.
• 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 eased on Monday afternoon after choppy trading as the strikes on the main Saudi airport of Riyadh kept tensions high. Traders took into account improved Gulf exports and a U.S. claim that Russia and Ukraine had agreed to an energy ceasefire, although neither country confirmed the agreement. Washington also said that the U.S. Treasury Department had partially waived sanctions on Russian diesel through April 2027, and that Russia would be allowed to supply 300,000 tons of diesel immediately, 500,000 tons in November and 1 million tons afterwards to international markets.

• Brent December futures were trading at $105.83 per barrel on October 12, up from $102.46/bbl for front-month futures on Oct. 5 (ICE Futures Europe).
• Dubai crude futures (Platts) for November 2026 settled at $103.65/bbl on Oct. 9, up from $99.83/bbl for front-month futures on Oct. 1 (CME).

Base Oils

The price situation in Asia was little changed from the previous week. Spot base oil prices were steady-to-firm, 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 inched up by $10/t to $1,490/t-$1,530/t

SN500 also was assessed higher by $10/t at $1,530/t-$1,570/t

Bright stock was firmer by $10/t at $1,700-$1,740/t.

Group II 150N was higher by $10/t at $1,670/t-$1,710/t

500N also edged up by $10/t to $1,680/t-$1,720/t, all ex-tank Singapore.

FOB Asia

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

Group II
150N adjusted down by $10/t to bring them more in line with reported transaction levels, although upward price pressure persisted, with the resulting range being $1,520/t-$1,560/t
500N steady at $1,560/t-$1,600/t

Group III
4 cSt grade stable at $3,640/t-$3,680/t
6 cSt holding at $3,630/t-$3,680/t
8 cSt assessed unchanged from last week 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.