Weekly Asia Base Oil Price Report

Crude oil futures climbed higher as no progress was made towards a peace agreement between the U.S and Iran, with Brent crude rising more than 2% on Sunday after plans for a second round of ceasefire negotiations fell apart.

With the war having reached its eighth week, the last crude oil and refined products shipments that were loaded in the Middle East were expected to have reached their destinations around the world. Effectively, no fresh oil shipments have been allowed to traverse the Strait of Hormuz, underscoring the dire supply conditions that refiners in all regions, but particularly in Asia and Europe, will be facing in the coming weeks. Analysts said the market was reaching an inflection point as oil storage tanks were depleted and prices could shoot up if the Strait of Hormuz were not opened soon. A dearth in jet fuel has already been an issue in Europe, with airlines having had to cancel thousands of flights, and stocks of products such as fertilizers were also dwindling, fueling concerns about food shortages.

The tightening crude oil supplies, the higher prices and the government mandates that required refiners to prioritize the production of fuels over other products resulted in reduced base oils output as well, prompting a majority of Asian base oil producers to discontinue spot offers and focus on fulfilling contractual obligations. However, even meeting this goal has been challenging as existing inventories have been run down amid curbed production rates, leading to strict allocation programs and in some cases, reduced term shipments.

Lubricant and finished product producers aimed to raise prices to counter higher costs for raw materials, packaging, and transportation, but strong competition among suppliers and pushback from buyers made it difficult to pass these increases along the supply chain. In response, some blenders have begun cutting back production and scaling down base oil purchases due to current product shortages and steeper prices—factors that could potentially harm long-term demand.

Group I and Group II
Spot trading was almost at a standstill in the Group I and Group II segments because a majority of producers have withdrawn spot offers. Some suppliers had earmarked limited spot volumes from existing stocks, but even these quantities were close to exhausted and prices have skyrocketed, making it quite impossible for some buyers to accede to these offers. Additionally, increased freight rates and logistical issues were hampering suppliers from moving product to other regions, and even deals that were concluded a few weeks ago were only able to be loaded this week.

Aside from the fact that most Middle East base oils that are typically shipped to Asia have become unavailable (some continued to be shipped ex-Saudi Arabia and the United Arab Emirates via the Red Sea), another factor that was affecting supplies was that Asian refiners were not able to obtain the usual volumes of crude oil to run their refineries at full tilt. While some refiners have imported oil from other origins including the Americas and Africa, most refineries in Asia are built to run on Middle East crude, and yields have therefore dwindled. A tanker carrying U.S. crude oil arrived in Japan on Sunday, marking the first oil shipment from the U.S. since the Iran war began in late February. Mexico has also agreed to supply Japan with one million barrels of crude oil. 

Refinery run rates in some countries such as Japan have fallen below 70%, and as of late April, utilization rates in South Korea were expected to drop to approximately 65%, according to Reuters. Even though some countries have allowed refiners to tap into strategic oil reserves, government mandates required refinery operations to prioritize the production of fuels, leading to reduced base oil output, further restricting base oil availability in the region.

In South Korea, Group II producer Hyundai Oilbank-Shell was expected to complete a planned maintenance program that started at the end of March in early May. The key Group II supplier exports significant amounts to countries such as China and India and had already restricted spot offers before the start of the conflict as it was preparing inventories ahead of its turnaround.

In Taiwan, the sole Group II producer, Formosa Petrochemical, was understood to be focusing on term commitments and was heard to be running its base oil plant at reduced rates due to a 40-day turnaround at the crude distillation unit (CDU#2) that started in mid-March.

A key Southeast Asian Group I and Group II producer was heard to have informed customers that the company was significantly reducing term supplies in May after some reductions in the previous two months. Some customers were trying to obtain products from alternative suppliers, but other refiners have also trimmed run rates and were only supplying term customers.

In China, the government has allowed state-owned refiners such as Sinopec and PetroChina to use strategic emergency crude supplies and commercial reserves to manage shortages caused by the tensions in the Middle East, while independent “teapot” refineries have been able to purchase Russian crude oil to run plants as well.  Since March, China has instructed its top refiners to halt or severely restrict exports of diesel, gasoline and other refined products as well.

China has been trying to reduce Group I production over the last decade and many plants have been shut down permanently to reduce their environmental impact. The country has been therefore quite dependent on Group I imports, particularly of the Group I heavy grades and bright stock. Since export supplies from origins such as Thailand have been substantially curbed, import volumes have fallen and prices have edged up. Group II supplies were also scarce given more limited availability from South Korea, Taiwan and Singapore since the start of the Iran war.

Chinese blenders have also faced resistance to higher lubricant prices, and the difficulties in absorbing the steeper base oil values have prompted many to scale back production. This, in turn, has resulted in reduced base oil demand, with suppliers worrying about demand destruction and losing market share. Some domestic producers were therefore offering competitive prices to protect accounts.

In India, base oil prices have edged up due to reduced base oil exports from the Middle East and other origins, while lofty crude oil values also pressured prices, despite the fact that Indian refiners have been able to import competitively-priced Russian crude. Prices of imported base oils have particularly been exposed to upward pressure due to the reduced availability from other Asian producers such as South Korea. There were expectations that some base oil volumes could move to India from Saudi Arabia from ports on the Red Sea, but exports from other Middle East suppliers have been largely unable to be obtained.

Prices for the Group I cuts were heard to have moved up by $50 per metric ton on a CFR India basis, with the light grades described as in a tighter position than the heavy grades.

Group II import prices have also edged up, but by more modest amounts than the Group I cuts, with increases in the realm of $30-40/ton CFR India reported.

Group III
Global availability of Group III grades has plummeted because several plants are located in the Middle East, and cargoes have been trapped there due to Iran’s closure of the Strait of Hormuz. Furthermore, several base oil refineries have suffered Iranian drone and missile attacks, forcing producers to shut down operations briefly, or for a prolonged period, depending on the extent of the damages. While ADNOC in Abu Dhabi and BAPCO in Bahrain had been hit by drones, parts of these facilities were spared and continued to run, but the Shell/Qatar Petroleum Pearl GTL plant was expected to remain shut for several months, possibly until year-end, because of damages to the equipment and a feedstock supply outage at the upstream Qatar Energy refinery.

A large share of global Group III volumes also originates in Asia, but since Asian Group III producers have cut run rates due to a shortage of Middle East crude oil, base oil output has also fallen. Some countries have been able to import crude oil from other origins, or resorted to using strategic emergency reserves, but refiners were prioritizing fuel production for transportation and heating needs of the general population, reducing base oil output.

The Malaysian refiner Petronas was heard to have been able to continue running its facilities at high rates because it can refine domestic crude oil, but it has reportedly restricted base oil volumes to term customers and has limited its participation in the spot market. In a press release posted on its website, Petronas confirmed that fuel supply had been secured through the end of June 2026.

In China, import prices for Group III grades on a delivered basis continued to move up because of an extremely tight global supply situation. While China has aggressively increased its own production capacity, particularly for Group II and Group III base oils, it remains a net importer due to the ongoing need for specific, high-grade base stocks. China typically imports large volumes of Group III base oils from the United Arab Emirates and Qatar, but shipments have declined. Some Group III cargoes continued to reach China from South Korea and Southeast Asia, but they were more limited than usual as producers prioritized domestic obligations and fuel output. The curbed imports have supported increases for domestic Group III base stock prices.

In India, import prices have climbed by approximately $100/t-$150/t on a CFR India basis, although business remained muted as spot volumes were not available from most suppliers. Term customers have also seen even stricter allocations than in the previous weeks.

Aside from difficulties in sourcing enough base oils to run blending operations, Indian base oil buyers were faced with the challenge of offsetting the higher production costs because they have only been able to implement partial increases for lubricants and other finished products.

One advantage that lubricant producers were enjoying was strong offtake from the automotive segment as automotive sales of passenger vehicles, two-wheelers and commercial vehicles have been robust in India over the last two months. India’s auto sales in March 2026 showed significant growth, with passenger vehicle wholesale dispatches rising 16% year-on-year to 4,47,702 units, driven by high SUV demand and new product launches, according to Autopunditz.com. The Indian government has also implemented several key incentives to boost auto sales, primarily focusing on electric vehicles and advanced automotive technology manufacturing, through the Production Linked Incentive scheme and the PM E-DRIVE scheme, as well as tax incentives introduced last year.

Shipping

A 3,000-metric-ton cargo was quoted for shipment from ARA (Antwerp-Rotterdam-Amsterdam) to Singapore between April 15 and May 30.
A 1,200-ton parcel was expected to be shipped from Thailand to China between May 10-20.
A 5,500-ton parcel was mentioned for shipment from Yanbu, Saudi Arabia, to Sawakin, Sudan, between April 27-May 5.
A 6,000-ton lot was discussed for loading in Yeosu, South Korea, to Port Klang, Malaysia, between April 27-May 5.
About 700 metric tons were mentioned for shipment from South Korea to Japan between May 1-10.
20,000-25,000 tons of base oils were also discussed for shipment from Ruwais, United Arab Emirates, to Europe in late April.

Production

Qatar Energy halted production of liquid natural gas (LNG) and other products following drone attacks on its facilities in Ras Laffan and Mesaieed on March 3. The facility will not be able to return to normal production for a long time, likely years, and has declared force majeure on LNG shipments, according to the company’s website. 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 oils and its shutdown caused global availability of Group III base oils to tighten significantly. The plant was expected to remain shut down for several months.

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 damages. 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 and had been restarted. An official report was not available by the publishing deadline.

In the United Arab Emirates, a suspected drone strike triggered a fire at the Ruwais Industrial Complex, leading authorities to shut down the country’s flagship refinery as a precautionary measure. 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 latest plant turnaround information for 2026 is provided below, along with turnarounds 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

• Pertamina was expected to embark on a one-month turnaround at its Group I plant in Cilacap, Indonesia, in April, but it could not be confirmed whether the shutdown will proceed as planned.
• 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 recent years.
• Luberef scheduled a 30-day turnaround at its Group I/Group II plant in Yanbu, Saudi Arabia, in August 2026. The company had previously completed maintenance at the unit from mid-November until December 2025. The plant underwent an expansion in 2017. 
• 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’s Dalian refinery began a permanent shutdown in 2023. The base oils unit closed in late 2024, with full closure completed in July 2025. Inventory clearance was scheduled by end of August 2025.
• CNPC’s Fushun plant in Liaoning was expected to increase Group I production to offset the Dalian closure. Bright stock capacity is estimated at 60,000 t/y.

Group II

• 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.
• GS Caltex had a partial shutdown at its Group II plant in Yeosu, South Korea, in mid-March.
• CNOOC has scheduled a turnaround at its Taizhou, China, plant in the second quarter of 2026.
• State-owned Sinopec Jingmen Co. plans to have a turnaround at its plant in Jingmen City, China, in November 2026. It is the largest production plant for base oils and waxes in Central-South China.
• Formosa Petrochemical postponed a scheduled turnaround and catalyst change at its Mailiao, Taiwan, plant from the fourth quarter of 2025 to third 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.

Group II
Petronas has postponed a turnaround at its Group II/III Melaka plant in Malaysia from June to August 2026.

• SK-Pertamina will be completing a 40-day turnaround at its plant in Dumai, Indonesia, in May 2026.

A fire at SK-Pertamina’s refinery broke out on October 1, 2025, but was quickly extinguished, with no impact to base oil supply reported. The Dumai Group III base oil plant was shut down for maintenance after the fire and was restarted shortly after. Term supplies were not expected to have been affected. Pertamina also operates a Group I plant in Cilacap, Indonesia. The Dumai refinery is a joint venture between Indonesian state-run Kilang Pertamina Internasional and South Korean producer SK Enmove.

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 should bring more Group III supplies to the market in early 2026.

Prices

Crude
Crude oil futures climbed after plans for a second round of negotiations between the U.S. and Iran stalled again, while Iran appeared more interested in holding talks with Oman, its neighbor along the Strait of Hormuz.

• Brent June 2026 futures were trading at $106.31 per barrel on April 27, up from $93.98/bbl for front-month futures on April 20 (ICE Futures Europe).
• Dubai crude futures (Platts) for May 2026 settled at $98.19/bbl on April 24, up from $84.66/bbl for front-month futures on April 17 (CME).

Base Oil
Spot base oil prices in Asia continued to climb due to high feedstock and crude oil prices and tight supplies. Prices have been notionally adjusted up to reflect current market conditions and sentiment, but trading remained muted as producers have generally withdrawn spot offers and transactions were difficult to track.

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

Group I
Solvent neutral 150 assessed higher by $100/t at $1,860/t-$1,900/t
SN500 was up by $100/t as well at $1,860/t-$1,900/t
Bright stock assessed up by $80/t at $2,000-$2,040/t

Group II
150N adjusted up by $100/t to $1,930/t-$1,970/t
500N assessed up by $100/t at $1,920/t-$1,970/t

FOB Asia

Group I SN150 jumped by $100/t to $1,700/t-$1,740/t
SN500 was up by $100/t to $1,700/t-$1,740/t
Bright stock prices assessed higher by $100/t at $1,970/t-$2,010/t

Group II
150N assessments increased by $120/t to $1,830/t-$1,870/t
500N was higher by $120/t at $1,820/t-$1,860/t

Group III grades also surged this week
4 cSt higher by $150/t at $2,200/t-$2,240/t
6 cSt also up by $150/t at $2,180/t-$2,220/t
8 cSt assessed up by $150/t at $2,040/t-$2,080/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.