According to reports, ExxonMobil and HF Sinclair announced posted price increases on the heels of several initiatives by other producers last week in response to extremely tight supply conditions and rising feedstock and crude oil prices. Crude oil futures had weakened on hopes that Pakistan-mediated negotiations between the U.S. and Iran would yield a permanent ceasefire and a reopening of the Strait of Hormuz. However, hopes of a swift deal faded as Iran presented a list of demands that the U.S. was likely to reject, while U.S. President Donald Trump also sought Iranian compensation for victims’ families and Middle Eastern countries that suffered damages due to the conflict. Meanwhile, Iranian-backed Houthi rebels in Yemen, who over the last three weeks have threatened ships loading at Red Sea ports, struck a ship carrying food supplies to a port on the Bab al-Mandeb Strait, causing several fatalities. The latest attacks come just a day after Houthi forces targeted al-Makha (Mocha) and its port, killing seven people.
With tensions flaring up again, West Texas Intermediate crude oil futures jumped to around $83 per barrel on Tuesday and Brent briefly touched $90/bbl over the U.S.-Iran stalemate and the ongoing blockade of Hormuz. Additionally, a significant drawdown in crude inventories in China, particularly in the Shandong province, may push the country to seek fresh crude oil cargoes, mainly from Russia and Iran, and these purchases may help support crude prices. However, Iranian loadings have been close to zero in August.
Another issue that participants were keeping an eye on was the restart of Saudi Aramco’s 400,000 barrels per day Jazan refinery, scheduled for Aug. 30, following a second Houthi attack on the facility earlier this week. While this particular refinery does not produce base oils, it is key in terms of diesel production as the shutdown has taken substantial amounts of diesel off the market.
Meanwhile, in the U.S., the fresh base oil price initiatives might face buyers’ resistance because many blenders have not been able to increase lubricant prices as much as they had hoped. A fresh round of lubricant increases was announced by independent manufacturers last week, following similar moves in the previous months that applied to lubricants, greases and finished products as blenders tried to offset the escalating production costs since the start of the Iran war. Competition among suppliers and cash limitations on the part of buyers resulted in mixed implementation, with some increases fully going through, some seeing partial implementation, and some being rescinded. The fate of the most recent round of increases was still uncertain.
Group I and Group II
According to reports, ExxonMobil announced a posted price increase of 24 cents per gallon on its Group I SN100, SN150 and SN330 base oils and 36 cents/gal on its Group I SN600 and bright stock, “due to ongoing changes in supply/demand balances,” the company said. The refiner will also be raising the postings of its Group II EHC65 and Group II+ EHC45 base oils by 48 cents/gal, all with an effective date of Aug. 12.
HF Sinclair/Petro-Canada announced posted price increases of 40 cents/gal on its Group II 100N, 200N, 350N and 650N grades, while the price of the 70N cut will not change. The company’s Group II+ grades will move up by 40 cents/gal, and the Group III cuts will increase by 50 cents/gal. The increases will all go into effect on August 14. HF Sinclair/Holly Frontier’s Group I prices will remain unchanged. In a letter to customers, HF Sinclair explained that its priority “remained maintaining supply continuity and transparency to customers during a prolonged period of geopolitical uncertainty.”
Group I and Group II prices remained exposed to upward pressure given robust demand and constrained domestic availability, with allocations and sales controls still largely in place and producers unable to offer significant volumes for spot transactions. These fundamentals had driven spot prices up in the previous weeks, but this week, prices were reported as largely stable — likley due to the lack of availability and thin trading.
With some severe weather battering large swaths of the U.S. this week, participants expressed concerns about fairly lean inventories at a time when they typically prefer to keep extra barrels to cover potential supply disruptions during hurricane season.
There was also some concern regarding attacks on Saudi refineries and vessels by Iran-backed Houthi rebels, which might make it impossible for Luberef — a Saudi Aramco subsidiary — to load crude and base oil cargoes from its ports on the Red Sea, and this could cause global Group I and Group II availability to tighten further.
Luberef was originally planning to start a shutdown at its Yanbu plant in August, but the refiner has postponed it to October. The company has been completing construction and integration activities at its Group II plant to produce Group III base oils, but plans to focus on Group II output for now given healthy margins.
In the U.S., Paulsboro is planning to take its Group I plant in New Jersey off-line for maintenance for five weeks in September and was expected to build inventories to cover contractual obligations during the outage. Petro-Canada has also scheduled a 30-day turnaround on its Group II unit in Mississauga, Canada, in the third quarter that may be tightening supplies further.
Driven by strong margins and depleted domestic inventories, a number of refiners are shifting focus toward diesel production at the expense of base oil volumes. Global diesel supplies remain highly constrained due to trade sanctions and operational interruptions in Russia, keeping fuel prices elevated. This week, a Ukrainian drone attack on an oil refinery in Orsk, in the Orenburg region of Russia was expected to result in reduced diesel production. Compounding the issue, given the Middle East oil supply crunch, many refiners have had to adjust their crude oil feedstock blends, which has inadvertently compromised their overall base oil processing yields.
Spot export business has been subdued due to the lack of sizeable spot cargoes for export transactions. Buying interest for U.S. base oils from Brazil and Mexico remained healthy, and while Mexican buyers appeared to be able to get additional volumes under contract, spot shipments remained more constrained and prices were firm.
In Brazil, Group I availability has improved because the local producer, whose plant had been on turnaround since June, has completed its maintenance program and has been able to meet contract commitments. At the same time, Group II base oils remained very tight and prices continued on an upward trend.
Appetite for Group II base oils, both on the domestic market, as well as on the export front, was likely to be robust as blenders use these grades to replace Group III cuts in some formulations that allow substitution. Rerefiners have few extra volumes to offer as they strive to meet term commitments and have reported sold-out positions for several weeks. Some players in South America were also considering imports from South Korea, with offers said to be attractive, but logistics were still somewhat challenging.
Group II+/Group III
As reported above, ExxonMobil announced increases of 48 cents/gal on its Group II EHC65 and Group II+ EHC45 base oils as of Aug. 12.
HF Sinclair/Petro-Canada also communicated posted price increases, with its Group II+ grades edging up by 40 cents/gal, and the Group III cuts by 50 cents/gal on Aug. 14.
These increases follow in the footsteps of SK Enmove, Motiva, and rerefiner Avista Oil, who communicated price increases the previous week, largely driven by an extremely tight global supply and demand balance.
There were no changes to the force majeure that Penthol, the official distributor of ADNOC material in the U.S., was compelled to declare in late July as it was unable to resume shipments from the plant in Abu Dhabi. The supplier continued to monitor developments and communications from ADNOC and evaluating alternative supply arrangements and logistics to restore deliveries as soon as possible. A second supplier was also heard to have extended its 60 percent allocation.
The Group III base oil segment continued to be severely impacted by the supply constraints stemming from facility damage and shipping obstructions at three key Persian Gulf producers’ plants — ADNOC, BAPCO and Shell Qatar Pearl GTL, as these producers can only ship products through Hormuz.
On the domestic front, a Group III producer was reportedly operating its refinery at reduced production rates, a condition that could further tighten an already constrained supply environment. At the same time, most suppliers remained unable to accommodate the steady influx of additional spot demand. Rerefined base oils have played an increasingly important role in bridging the supply gap left by virgin base oil producers, with rerefiners indicating that their available volumes were fully committed.
Asian producers were also striving to meet contractual obligations in the U.S., with strict sales controls and allocations in place, but they also tried to fulfill some spot requirements, even though this proved difficult to achieve. Offers of Indian and Chinese Group III base oils have come to market, but these barrels do not carry the required approvals that many blenders need and were therefore only able to meet a limited number of inquiries. A 5,000-metric ton cargo of base oils was discussed for shipment from Mumbai, India, to the U.S. Gulf Coast in mid-August. A 5,000-ton parcel was also being considered to ship to the USGC from China. A 4,000-ton lot was also mentioned for possible shipment from Mumbai/Hazira, India, to Rio de Janeiro, Brazil, in the first half of September. It was not clear what base oil grades these shipments included.
Naphthenic Base Oils
Naphthenic prices were stable-to-firm, since the supply and demand balance remained tight and this offered support to the prevailing base oil values. Additionally, recent crude oil price spikes also exerted upward pressure.
As was the case in recent weeks, producers were watching both crude oil prices—Brent, in particular—as well as geopolitical developments as these were causing significant crude oil price swings. Refiners were also trying to optimize base oil production because margins were attractive vis-a-vis fuel prices.
Availability of the light naphthenic base oils was described as strained given robust demand from the transformer oil and metalworking segments. The heavy-viscosity pale oils saw steady demand from the rubber and tire segment, but buying activity in this segment of the market was not as consistent.
Lubricant Increases
A majority of lubricant manufacturers have implemented price increases since the start of the Iran war to offset rising production costs over the last five months, with a fresh round announced by several independent manufacturers last week as crude prices were very volatile and base oil prices hovered at elevated levels. Some suppliers have been successful at achieving the full intended amounts given concerns of potential shortages due to recent and ongoing supply disruptions. A number of manufacturers have faced resistance, particularly as buyers were dealing with cash flow constraints and credit limitations against a backdrop of demand uncertainties in downstream markets.
Independent lubricant manufacturers were facing competition from major manufacturers, who have started to reduce finished lubricant prices. Smaller blenders were largely unable to offset the sky-high base oil costs if they decreased lubricant prices, and may have to reduce output if price pressure from steep raw material prices does not let up soon.
Some manufacturers have already been forced to reduce output given difficulties in transferring the higher production costs down the supply chain, coupled with base oil shortages, particularly of Group III cuts. Several OEM dealers were understood to be facing serious challenges in fulfilling genuine motor oil demand given the current conditions.
Crude Oil
Crude oil futures rose on Tuesday as a U.S.-Iran peace deal seemed more remote and Houthi attacks on two ships fueled concerns about further Middle East crude supply disruptions, even though data showed an increase in U.S. inventories.
- West Texas Intermediate September 2026 futures settled on the Nymex at $83.20 per barrel on Aug .11, up from $75.77 per barrel on Aug. 4.
- Brent September 2026 futures were trading on the ICE at $89.48/bbl on Aug. 12, down from $90.12/bbl on Aug. 5.
- Louisiana Light Sweet crude wholesale spot prices were hovering at $85.71/bbl on Aug. 10. Spot prices had settled at $83.66/bbl on Aug. 3, according to the U.S. Energy Information Administration.
Diesel
Low-sulfur diesel wholesale, Aug. 10 (Aug. 3), EIA
New York Harbor: $4.21 per gallon ($3.90/gal)
Gulf Coast: $4.15/gal ($3.87/gal)
Los Angeles: $4.33/gal ($4.01/gal)
Gabriela Wheeler can be reached directly at gabriela@LubesnGreases.com
LNG Publishing Co. Inc./Lubes’n’Greases shall not be liable for commercial decisions based on the contents of this report.
Posted Paraffinic Base Oil Prices August 12, 2026 (Prices are FOB basis, in U.S. dollars per gallon and U.S. dollars per metric ton).
Archived base oil price reports can be found through this link: https://www.lubesngreases.com/category/base-stocks/other/base-oil-pricing-report/
Historic and current base oil pricing data are available for purchase in Excel format.
*ExxonMobil prices obtained indirectly.
**Rerefiner
