Asia Base Oil Price Report


The base oils market started another year in the grips of the coronavirus pandemic, with uncertainties related to short-term demand, potential restrictions to the population’s mobility and refinery operations at the forefront of some of the discussions.

While the direct effects of the rapid spread of the Omicron variant on base oils demand was still unclear, it was evident that the supply chain would continue to suffer disruptions, which in turn might affect base oil operations. Blenders have been dealing with a shortage of additives and other components and this has forced manufacturers to reduce operating rates or to temporarily close business at some lubricant plants. As a consequence of these measures, base oil consumption has suffered.

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While there were early signs that the Omicron contagion rates in Asia were more under control than in other regions such as the Americas and Europe, this week, a number of Asian countries have reported spikes in new infections. This was the case in Japan, where the government had implemented stricter border controls and quarantine for travelers in late November after the Omicron variant was identified in South Africa. The number of infections in Japan was still comparatively very low this week, but it doubled in a matter of days, which sparked new concerns about the possibility of further restrictions in coming weeks, potentially leading to reduced business activities and fuel and lubricant consumption.

For the time being, Japanese base oil suppliers were heard to be running plants at normal rates and preparing to implement price increases for the

first quarter of the year. Japanese refiner Eneos communicated that it would raise its first quarter 2022 price of API Group I 150 grade by 7.3 yen per liter. The price is stipulated using a formula that incorporates a “cocktail” of values such as the price of imported crude oil. There were also reports that this price move was placing pressure on indications for South Korean base oil imports, as prices into Japan remained lower compared with other regions.

South Korean suppliers continued to actively pursue export opportunities, both within Asia and to more distant destinations such as Latin America.  Recent cargoes were heard concluded into Ecuador and Mexico, and more were on offer, according to sources. Regular shipments to China and India were also on South Korean suppliers’ agenda. Group III supplies from South Korea were said to be tight, as demand for these grades had remained healthy on a global scale, but an easing of availability was expected in coming weeks as plants were running full out.

One of the roadblocks that Asian suppliers were dealing with was transportation and logistics issues caused by a lack of vessel and port personnel due to coronavirus infections and the fact that some ships were unable to return to Asia from other regions. “The continuing inability of ship operators to conduct crew changes has been the single greatest operational challenge confronting the global shipping industry since the Second World War,” the International Chamber of Shipping explained on its website last year. Regulatory crew changes were unable to take place due to restrictions imposed by national health and immigration authorities and the suspension of international flights.

While the shipping issues were expected to persist well into 2022, the problems should lessen after the holidays and Lunar New Year as container traffic backs off, Goldman Sachs predicted in an article published by Aside from the logistical issues, participants were also facing increasing freight rates that were difficult to transfer down the supply chain.

As a result of the supply chain disruptions observed since the start of the pandemic in early 2020, many manufacturers have started to look for suppliers that are closer to home, instead of solely relying on production that is done in distant locations, sources commented.

This seemed to be the trend in China, where domestic companies were looking at establishing or expanding production of additives and other chemicals used in the manufacture of lubricants. Chinese base oil plants have also increasingly been able to cover many of the country’s requirements, steering it away from being a net importer of base oils. In fact, China was able to export a few cargoes to other countries in the region in 2021 and this activity was expected to persist in 2022. Regular Group II imports from Taiwan were anticipated to continue, as a large portion of the Taiwanese producer’s output is earmarked for term shipments to China every month.

Meanwhile, in India, base oil supply levels were thought to be sufficient to meet the current call for product, as several cargoes reached Indian ports in December and a few more have been lined up for January arrival, while domestic producers have been running plants at close to full rates. Approximately 20,000 metric tons of base oils were heard to have arrived in the last week of December 2021 and close to another 9,000 metric tons were scheduled for early January arrival so far. The cargoes included both light viscosity and heavy viscosity Group I and Group II base oils from South Korea, Saudi Arabia, the United Arab Emirates, U.S., Qatar, Taiwan and Singapore.

Spot base oil prices in Asia were assessed as stable to softer this week as business was just starting to pick up with the return of participants to the workplace, following the New Year’s holidays. The Group I heavy-vis grades saw downward pressure since availability has improved, particularly from Southeast Asian suppliers in Indonesia and Thailand. More defined price trends were expected to emerge in coming days. The spot ranges portrayed below reflect bids and offers, deals and published prices widely regarded as benchmarks for the region.

Ex-tank Singapore prices were assessed as stable to softer. The Group I solvent neutral 150 grade was holding at $840/t-$870/t, and the SN500 at $1,020/t-$1,060/t. Bright stock was down by $20/t at $1,180/t-$1,220/t, all ex-tank Singapore.

Prices for the Group II 150 neutral were stable at $870/t-$910/t, while the 500N was assessed at $1,120/t-$1,160/t, ex-tank Singapore.

On an FOB Asia basis, Group I SN150 was heard at $730/t-$770/t, and the SN500 was assessed down by $20/t at $880/t-$920/t. Bright stock was down by $20/t at $970/t-1,010/t, FOB Asia.

The Group II 150N was steady at $770/t-$810/t FOB Asia, and the 500N and 600N cuts were hovering at $850/t-$890/t, FOB Asia.

In the Group III segment, prices were unchanged from a week ago. The 4 centiStoke was holding at $1,440-$1,480/t, and the 6 cSt was assessed at $1,420/t-$1,460/t. The 8 cSt grade was gauged at $1,180-1,220/t, FOB Asia, all for fully approved product.

Upstream, crude oil futures moved up on Wednesday, extending an upward trajectory from previous sessions even after OPEC+ producers announced that they would increase output in February, and U.S. fuel inventories surged given a slump in demand as COVID-19 cases skyrocketed.

On Jan. 6, Brent March futures were trading at $81.44 per barrel on the London-based ICE Futures Europe exchange, from $78.66/bbl for February futures on Dec. 30.

Dubai front month crude oil (Platts) financial futures for February settled at $78.07/bbl on the CME on Jan. 5, from $76.98/bbl for January futures on Dec. 29. (CME note: Settlement prices on instruments without open interest or volume are provided for web users only and are not based on market activity.)

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.

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