Asia Base Oil Price Report


Base oil market participants in Asia appeared to be in wait-and-see mode—a distant cry from the situation in January 2021, when buyers had fervently tried to secure as much product as possible as inventories were depleted and prices for some grades had started a vertiginous climb. At the time, many refineries were running at reduced rates in response to the slump in transportation fuel consumption caused by a pandemic-related reduction in mobility of the world’s population.

As a result, several base oil grades had become extremely difficult to find, catapulting prices to nosebleed levels. API Group I bright stock, for instance, was assessed at $980-$1,020 per metric ton FOB Asia on Jan. 22 and jumped to $1,280-$1,320/t by February 26. By the end of May 2021, bright stock was hovering at historic highs of $1,840-$1,880/t. Prices then started to weaken, as supply became more plentiful given increased operating rates at many refineries and the resumption of production at those plants that had undergone turnarounds.

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Conversely, this year, bright stock values remained under pressure as consumption was more temperate and Asian supplies were more than ample to cover demand. Some of the other heavy-viscosity grades were suffering as well, given a seasonal slowdown in demand for these cuts.

Group II base stocks were less abundant, and prices were therefore less exposed to downward pressure. Demand for these grades seemed to be holding mostly steady, particularly in Southeast Asia. Most suppliers appeared to have managed inventories well at the end of the year and were not holding much surplus.

Group III base oil prices were stable to slightly softer, and there were no significant fluctuations in terms of demand. South Korean availability was deemed ample and no turnarounds at Group III plants in that country have been scheduled until April. A Middle Eastern Group III facility was heard to be shutting down in March for a two-month turnaround, and while most of the output from that unit is used for the producer’s downstream lubricant blending, the company was understood to be looking for additional cargoes from other regional suppliers to help cover the shortfall during the outage.

While the pandemic has not disappeared, and the Omicron variant is in fact spawning new infection waves in many countries, there are fewer mobility restrictions and lockdowns in place compared to a year ago, leading to improved demand for fuels and other refined products. Most refineries have been therefore running at optimum rates, allowing for base oil inventories to be plentiful.

No significant turnarounds were scheduled for the first quarter of the year, and with the exception of a couple of very brief maintenance programs such as the one at a Thai plant in late February, most Asian base oil plants were anticipated to run well over the next three months. A potential problem might be a temporary labor shortage caused by the increasing number of employees who get infected with Omicron and have to stay away from the workplace. This situation has also impacted logistics and freight, with market participants treading cautiously when it came to sourcing and shipping product from distant locations as the transportation issues might hamper or delay deliveries.

There was the additional risk of shipping products to China and other destinations such as Taiwan ahead of the Lunar New Year holidays – which start on Feb. 1 – and not being able to discharge vessels during the festive weeks, resulting in additional costs. Buyers in these countries have also been less interested in procuring cargoes ahead of the holidays.

Nevertheless, several producers and traders have been busy scheduling shipments within the region and to deep-sea destinations. A 2,700-metric ton base oils parcel was under discussion from Daesan, South Korea, to Bangkok, Thailand, for the second half February shipment. Also originating in South Korea, an 8,000-ton cargo was expected to cover Yosu and Ulsan to Mumbai, India, in late January. A second lot ex-Yosu or Ulsan was on the table possibly to move to South America in early February and about 1,000 were discussed from Ulsan to Port Klang, Malaysia, for early February lifting. Another 1,500 tons were expected to be shipped from Onsan to Tianjin, China, in mid-February. A 2,500-ton cargo was also discussed from Singapore to Karachi, Pakistan, for late January lifting.

In India, supply was deemed more than adequate to cover current demand and buyers have therefore been less eager to jump into the market to purchase cargoes. Several spot cargoes of Middle East and United States origin were slated to arrive in coming weeks and U.S. suppliers were still exploring opportunities to export more material to India, but prices were less attractive than in November and December. South Korean shipments continued to move steadily to India under contract. The ample supplies, coupled with the uncertainties brought about by the high transmission rate of the Omicron variant and its impact on downstream markets such as automotive and industrial lubricants was also prompting Indian base oil consumers to hold back on purchases.

At the same time, sellers did not appear too anxious to place product and were maintaining prices largely unchanged, particularly in view of climbing crude oil and diesel values.

Spot base oil prices in Asia were stable to soft week-on-week, with some prices going up and some remaining unchanged given the different conditions impacting each market segment. The spreads reflect bids and offers, deals and published prices widely regarded as benchmarks for the region.

Ex-tank Singapore prices were assessed as stable to soft. The Group I solvent neutral 150 grade was steady at $840/t-$870/t, and the SN500 at $1,020/t-$1,060/t. Bright stock was holding 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, but the 500N was assessed down by $20/t at $1,070/t-$1,110/t, ex-tank Singapore.

On an FOB Asia basis, Group I SN150 was steady at $730/t-$770/t, but the SN500 was heard down by $10/t at $900/t-$940/t. Bright stock was down by $30/t at $920/t-960/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 slightly lower as availability has lengthened. The 4 centiStoke was down by $20/t at $1,420-$1,460/t, and the 6 cSt was also down by $20/t at $1,400/t-$1,440/t. The 8 cSt grade was steady at $1,180-$1,220/t, FOB Asia, all for fully approved product.

Upstream, crude oil futures eased on Thursday, after jumping to eight-year highs on Tuesday, as U.S. gasoline and crude oil stocks rose last week. However, robust oil demand and temporary supply disruptions continued to offer support to values.

On Jan. 20, Brent March futures were trading at $88.09 per barrel on the London-based ICE Futures Europe exchange, from $84.84/bbl on Jan. 13.

Dubai front month crude oil (Platts) financial futures for February settled at $85.52/bbl on the CME on Jan. 19, from $81.71/bbl on Jan. 12 (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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