Asia Base Oil Price Report


There were contrasting trends in the base oils markets in Asia, with prices for some grades edging up, some remaining unchanged, and others moving down on softer fundamentals. Lackluster base oil and lubricant demand in key markets China and India have placed downward pressure on some grades despite firming crude oil and feedstock prices. While availability of a few base oil grades was deemed tighter, helping drive upward adjustments, prices for other grades have dipped.

Market participants were keeping a watchful eye on crude oil and feedstock values, as they did not only have an impact on base oil pricing but were also likely to affect refining decisions. When the price of fuels such as diesel or gasoil starts to strengthen, many refiners prefer to stream more feedstocks into the distillates stream and reduce base oils output, resulting in reduced availability. This might affect supply and demand fundamentals in the coming months.

Crude oil values have jumped compared to two months ago. The price for the benchmark Brent crude was hovering at around $75 per barrel in early June but was flirting with the $85 per barrel mark in early August on output reductions in key oil-producing countries. According to S&P Global Commodity Insights, members of the OPEC+ saw their collective oil production slump to the lowest level in nearly two years in July after Saudi Arabia began its unilateral output cuts.

Crude oil futures reached new highs on Wednesday, with Brent close to its steepest level since January after a significant drawdown in U.S. fuel stockpiles, along with output cuts from Saudi Arabia and Russia, which offset concerns about lower demand from China.

On August 10, Brent crude Octoberfutures were trading at $87.60 per barrel on the London-based ICE Futures Europe exchange, from $85.25/bbl on Aug. 3.

Dubai front month crude oil (Platts) financial futures for September settled at $87.68 per barrel on the CME on Aug. 9, from $83.15/bbl on Aug. 2.

In the key market China, disappointing economic developments have had a dampening effect on various activities, including industrial output and construction. Although it has been eight months since China relaxed strict pandemic lockdowns that had paralyzed many parts of the country, the Chinese economy –

the world’s second largest after that of the United States – has started to slow after an initial upsurge, according to The New York Times. While many countries around the world have been dealing with inflation, in China, the opposite problem has emerged as the country was facing deflation, driven by a reluctance by the population to spend money and businesses to expand. “Chinese consumer prices, which have been largely flat for the past several months, fell for the first time in more than two years,” reported this week. Heavy rains and flooding in many parts of the country were also affecting daily activities and transportation.

Base oil demand for domestic products was deemed fairly steady in China, but buying interest was not as robust as expected and appetite for imports remained lackluster. Most local plants were running well, although a couple of shutdowns have been extended due to market economics, while the start-up of a new API Group III facility has also been delayed and was now anticipated to occur in late August. There was also talk about some Group I cargoes being exported from China to destinations within Asia given a product overhang.

Of all the base oil grades, those within the Group III segment were the most exposed to downward pressure as availability was plentiful in the region. The restart of a couple of key Group III production units in Asia and Europe allowed more barrels to enter the supply stream, while offers from the Middle East were plentiful as well.

Demand for some of the heavier grades within the Group I and Group II segments was expected to soften given seasonal patterns. For the time being, however, Group I and Group II supplies were deemed tighter in Asia because of a flurry of deals in previous weeks as buyers hoped to beat potential price hikes given firming crude oil and feedstock prices, and some suppliers have indeed increased offer levels this week. Some buyers remained cautious because of price uncertainty and preferred to wait for more market clarity.

Unplanned output issues at a Group II base oil plant in South Korea were expected to result in reduced regional supplies; the producer has curbed operating rates due to feedstock supply shortages caused by upstream maintenance work at the associated refinery.

There were also fewer spot cargoes offered by the sole Taiwanese Group II producer as it is building inventories ahead of a routine turnaround in October.

In India, demand has been sluggish because many buyers had built inventories ahead of the monsoon season which runs from June until September, when logistics and transportation can get complicated. Buyers were counting of being able to secure domestic products as plants were running well, and domestic producers have also lowered prices.

A number of import cargoes were anticipated to arrive during August, but there might be fewer shipments in coming months as spot availability in the U.S. – which typically ships large quantities to India – has tightened. Still, there were reports of South Korean cargoes being offered into India for August/September shipment. There were also competitive offers of Group III material from the Middle East.

Aside from India, South Korean suppliers have targeted other markets within Asia. There were discussions of a 2,000-metric-ton cargo for shipment from Yeosu to Rugao, China, in mid-August. A 1,500-ton parcel was mentioned for shipment from Onsan to Tianjin, China, in late August. A 1,660-ton lot was on the table for lifting in Onsan to Taichung, Taiwan, in the second half of August. About 5,000 tons were expected to be shipped from Yeosu to Southeast Asia in late August as well.

Spot price assessments were mixed in Asia this week, with some grades edging up, some staying at steady levels and some moving down. 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 prices showed diverging trends. The Group I solvent neutral 150 grade was down by $10/t at $800/t-$830/t, but the SN500 was holding at $920/t-$960/t. Bright stock slipped by $10/t to $1,070/t-$1,110/t, all ex-tank Singapore.

Prices for the Group II 150 neutral were assessed steady at $900/t-$940/t, but the 500N edged up by $10/t to $940/t-$980/t, ex-tank Singapore.

On an FOB Asia basis, Group I SN150 was softer by $10/t at $670/t-$710/t, but the SN500 was unchanged at $760/t-$800/t. Bright stock prices slipped by $10/t to $830/t-870/t, FOB Asia.

The Group II 150N was assessed unchanged at $770/t-$810/t FOB Asia, while the 500N and 600N cuts inched up by $10/t to $820/t-$860/t, FOB Asia.

In the Group III segment, prices edged down on increased availability and competitive pricing. The 4 cSt was assessed down by $20/t at $1,430-$1,460/t, and the 6 cSt was lower by $20/t as well at $1,390/t-$1,430/t. The 8 cSt grade was holding at $1,060-1,100/t, FOB Asia, for fully approved product.

Gabriela Wheeler can be reached directly at 

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

Archived base oil price reports can be found through this link:

Historic and current base oil pricing data are available for purchase in Excel format.

Related Topics

Base Oil Reports    Base Stocks    Other