Weekly Asia Base Oil Price Report

The International Energy Agency (IEA) warned in its monthly market report for May that the world’s crude inventories were being depleted at a record pace. “With Hormuz tanker traffic still restricted, cumulative supply losses from Gulf producers already exceed 1 billion barrels with more than 14 million barrels per day (bpd) of oil now shut in, an unprecedented supply shock,” the IEA noted.

Group I

A few spot Group I cargoes were understood to have been offered in Southeast Asia during the week, fanning hopes that spot supply would improve in the coming weeks. At the same time, given the sky-high price levels that Group I and Group II base oils have reached since the beginning of the Iran war, many blenders have paused purchases because their margins have declined considerably. The price ascent has therefore stalled on fears that continued increases might only lead to further demand destruction. Sources reiterated that growing availability of flexibag volumes had placed downward pressure on Singapore ex-tank prices in particular.

Several Asian base oil producers had withdrawn spot export offers because they needed to focus on domestic and contractual obligations, and a shortage of Middle East crude oil had led to reduced refinery run rates. However, many of these producers have started to receive oil shipments from alternative sources, or have been able to tap into national strategic oil reserves, allowing them to ramp up production rates. India and China have been purchasing more oil from Russia, as U.S. sanctions on crude from this origin had been temporarily suspended, although president Trump has let the suspension lapse.

A few Group I producers have had the additional advantage that their plants have been able to run on domestic crude oil supplies, or their governments have reached agreements with Iran — as was the case of Thailand — which allowed a number of oil tankers to cross the Strait of Hormuz.

While one producer in Thailand was heard to have more plentiful supplies to offer, a second supplier has brought more limited availability to the market. It was heard that Thai Lubes had offered small quantities of Group I base oils for spot business, although the producer was also understood to be prioritizing domestic demand and contract obligations. The producer reportedly offered a 100-metric ton lot of Group I SN500 at $1,750 per metric ton FCA Thailand for loading this month. The price was valid until May 15 and was unchanged from the previous week, when the producer had offered a small SN500 cargo as well.

Indonesian producers were also expected to continue running plants at fairly high rates as their dependence on Middle East crude was more limited than other Asian refiners, but so far there have been no spot offers heard from one of the Indonesian suppliers that is generally active on the spot front, with sources indicating that there may not be any availability in May or June.

A key Southeast Asian Group I and Group II producer was understood to have informed customers that the company was significantly reducing term supplies in May after some reductions in the previous two months. However, there were reports that additional bulk Group I and bright stock cargoes had started to emerge in Southeast Asia, easing the current tightness.

South Korean producer S-Oil was anticipated to start a partial shutdown at its Group I, II and III plant in Onsan in early May.

In China, domestic producers were facing lackluster buying interest at home and some have therefore resorted to offering small Group I cargoes for export at competitive levels. The market has entered a seasonal slowdown in terms of base oil demand, and this was expected to exert downward pressure on pricing. Bright stock was possibly one exception in that China has a structural deficit of this grade and both import and domestic prices were somewhat insulated from the general downward pressure that other Group I grades were receiving.

In India, lubricant production rates have declined as many blenders are unable to transfer the steep production costs to finished products. This, in turn, has resulted in reduced demand for base oils. The Indian government has launched a campaign to discourage traveling and driving to conserve fuels, given disruptions in shipments of crude oil, LNG and other refined products such as jet fuel from the Middle East amid surging prices.

Group I import prices moved up in India this week, despite expectations of increased availability in the coming weeks as Asian suppliers start to offer more spot cargoes and April shipments from Saudi Arabia should be reaching India over the next few weeks. However, there was also reduced supply from Russia as some refineries have been hit by Ukrainian drones and missiles. Group I import prices inched up by $10-20/t on a CFR India basis week-on-week, with domestic prices also heard to have moved up in May.

Group II

While Group II spot offers remained very limited in Asia, prices have stabilized. Most base oil producers continued to favor term obligations and the production of fuels, but sentiment in terms of base oil availability has improved. Government mandates required that refiners prioritize fuel production over other refined products such as base oils to help reduce gasoline and diesel prices and ensure fuel supplies for businesses and the general population.

However, some refiners have been able to utilize strategic emergency oil supplies and have also imported oil from other origins including the Americas and Africa, and although yields were not expected to be as high, capacity utilization was expected to improve.

Even so, as mentioned above, a key Southeast Asian Group I and Group II producer was understood to have informed customers that the company was significantly reducing term supplies in May and was likely to keep the same allocations in place in June, particularly on Group II cuts.

A key South Korean refinery was anticipated to increase run rates this month, while a second Group II producer, Hyundai Oilbank-Shell, which had shut down operations to perform maintenance work in early April, was heard to have restarted production during the first week of May and was in a position to offer spot cargoes. The key Group II supplier exports significant amounts to countries such as China and India.

Small Group II spot offers have reportedly emerged from South Korean suppliers and prices in Asia have remained steady or edged down slightly—a sign that the supply situation was improving, sources speculated. But there was also the risk that any Asian surplus supplies might be shipped to markets where margins were more attractive.

In Taiwan, the sole Group II producer, Formosa Petrochemical, was understood to have kept its domestic postings steady this month, after several consecutive upward adjustments in March and April. The producer was heard to be focusing on term commitments and domestic product needs, and its base oil plant was expected to run at improved rates this month, which might allow the supplier to offer more spot cargoes.

Given signs of improved Group II availability, buyers and sellers have adjusted down bids and offers from a week ago, with offers from some suppliers softening as there was growing concern that buyers would be slashing consumption because they were unable to offset the steep raw material costs. While lubricant manufacturers have tried to increase lubricant and finished product prices, implementation has been slow and difficult as economic uncertainties and high fuel prices dampened consumer spending.

In China, interest for imported base oils has subsided in line with a seasonal slowdown after the major Labor Day holidays in early May, and because of high prices, which kept buyers away. Consumers preferred to rely on existing stocks and purchase from local suppliers if needed. Additionally, prices in China were not considered high enough to attract regional spot cargoes as values in other countries offered better margins. Some importers were even opting for re-exporting parcels before submitting them to import procedures, and others have reduced import volumes so as not to hold expensive inventories given the current market uncertainties.

In India, base oil demand has softened because of the high prices seen in recent weeks, which blenders have sometimes been unable to recoup from downstream applications. The government has encouraged the population to reduce travel and driving given the still delicate situation in the Middle East and the difficulties with obtaining Middle East crude oil and fuels.

Import prices have edged up, with the exception of the Group II 70N, but the increases have moderated compared to a month ago. On a CFR India basis, prices for imported Group II 150N and 500N were heard to have climbed by $10/t. The 70N, on the other hand, was heard to be under pressure because of lackluster buying interest and lower gasoil prices, as this grade is often used as a fuel extender.

Group III

There was still little relief for Group III buyers as global supplies remained extremely tight and prices continued on an upward trek. A significant portion of the world’s Group III supplies were still unable to be shipped out of the Persian Gulf due to Iran’s closure of the Strait of Hormuz. Damages on production facilities by Iranian drone attacks have also caused shutdowns and force majeure declarations. While some blenders were able to replace Group III grades with Group II cuts in some cases, those that needed to meet strict compliance with OEM specifications were seeing shortages that affected lubricant supplies and deliveries.

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.

Bapco was also heard to have shut down base oil production following a drone strike and has declared force majeure on its group operations. The declaration affects contractual obligations, but domestic supplies remain secure.

Similarly, ADNOC has also suffered some disruptions due to drone attacks, according to sources. As of May, ADNOC had not declared force majeure on its overall LNG or oil exports, despite significant disruptions to shipping in the Strait of Hormuz due to regional conflict. Instead, ADNOC is managing supplies by deferring some LNG cargoes and adjusting deliveries on a transaction-by-transaction basis. ADNOC has kept some supplies moving by utilizing the Abu Dhabi Crude Oil Pipeline to Fujairah, on the Red Sea, bypassing the closed Strait of Hormuz.

Middle East producers have been able to continue shipping products from storage units in other regions such as Europe and the U.S., but these were expected to be depleted and there were expectations that supplies would dry up this month or in early June if Middle East shipments did not resume soon.

Several Asian producers had cut run rates due to a shortage of Middle East crude oil, but run rates were expected to improve as some countries have been able to import crude oil from other origins outside the Persian Gulf, or have resorted to using strategic emergency reserves.

A key South Korean supplier was heard to be able to produce enough base oils to meet contract commitments as it has diversified its crude sources in the last few years, with the refinery able to handle alternative crudes much better than other refineries. The supplier is therefore able to meet customer demand, both on the domestic front, as well as for export, mainly to the U.S., but it has also been managing inventories closely.

Other South Korean refiners have also started to use crude oil from other sources rather than from the Middle East, but their yields were expected to be reduced as facilities are built to run on Middle Eastern sour crude slates.

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. The producer was expected to start building inventories ahead of a 45-day planned turnaround starting in August.

In China, Group III import prices were exposed to upward pressure because of regional tightness and comparatively more limited domestic capacity. Domestic Group III producers tried to maintain prices or trimmed them slightly to protect market share, but buying interest has softened on seasonal patterns and lubricant demand uncertainties.

The Chinese automotive industry is undergoing a period of stagnationdriven by weak consumer sentiment and a relentless multi-year price war, with overall domestic sales falling this year. Passenger car retail sales have plummeted as Chinese consumers scale back on spending. China’s domestic automotive market is experiencing a severe downturn marked by seven consecutive months of declining sales, with April retail volumes dropping by over 21% year-over-year. While internal combustion engine (ICE) demand has cratered, New Energy Vehicles (NEVs) have achieved a record market share, even as overall segment sales face slight contractions. To offset sluggish domestic sales, Chinese automakers have focused on the global stage, with overseas shipments growing significantly and manufacturers increasingly prioritizing emerging markets in Europe, Southeast Asia and Latin America.

In India, Group III import prices were heard to have climbed by about $30/t on a CFR India basis from the previous week as supplies remained very tight. However, most buyers faced difficulties passing on the increases to downstream segments and some blenders opted for reducing operating rates. Others used Group II grades instead of Group III cuts whenever formulations allowed. Given very limited domestic Group III capacity, Indian buyers were very exposed to the international price trends.

Shipping

• About 28,000 metric tons were discussed for shipment from Thailand to West Coast India between June 1-10
• A 7,000-ton lot was mentioned for possible shipment from China to Antwerp-Rotterdam-Amsterdam or the Baltic in the second half of May.
• A 1,400-ton parcel was quoted for lifting in Yeosu, South Korea, to Yokohama, Japan, between June 10-17.
• A 4,600-ton lot was on the table for shipment from Yeosu to Indonesia in the first half of June.
• A 1,200-ton parcel was quoted for lifting in Yeosu to Malaysua in the first half of June as well.
• A 4,800-ton cargo was mentioned for shipment from Yeosu to Vietnam in late May.
• Over 18,000 tons were expected to be shipped from Rotterdam, The Netherlands, to Singapore in the first half of June.
• About 2,000 to 3,000 tons were discussed for shipment from China to Thailand in May.

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 it was unclear when shipments would resume, with the company ostensibly declaring force majeure. An official report was not available by the publishing deadline.

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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, and the company may have resorted to shipping products from ports on the Red Sea.

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. The turnaround was completed around May 8 and spot shipments were expected to resume in June.
• 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 III

• 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.
• 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 Oil

Crude oil futures jumped and stocks fell on Monday as Trump issued a new warning to Iran, fueling concerns of an escalation in hostilities after a drone attack on a nuclear power plant in the United Arab Emirates.

• Brent July 2026 futures were trading at $108.29 per barrel on May 18, up from $104.33/bbl for front-month futures on May 11 (ICE Futures Europe).
• Dubai crude futures (Platts) for June 2026 settled at $101.63/bbl on May 15, up from $93.94/bbl for front-month futures on May 8 (CME).

Base Oils
Spot base oil prices in Asia were somewhat mixed this week, with some assessments holding at unchanged levels on subdued activity and an absence of offers, some seeing downward adjustments as recent levels were deemed unworkable amid expectations of improved supply, and some edging up on tight fundamentals. Prices have been notionally adjusted to reflect current market conditions and sentiment, but trading continued to be limited as producers have generally withdrawn spot offers and transactions remained 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 edged down by $20/t to $1,800/t-$1,840/t
SN500 also adjusted down by $20/t to $1,800/t-$1,840/t
Bright stock prices assessed unchanged at $1,900-$1,940/t

Group II
150N lower by $20/t at $1,880/t-$1,920/t
500N adjusted down by $20/t to $1,860/t-$1,910/t

FOB Asia

Group I SN150 edged down by $20/t to $1,660/t-$1,700/t
SN500 also lower by $20/t at $1,660/t-$1,700/t
Bright stock prices adjusted down by $30/t to $1,860/t-$1,900/t

Group II
150N assessments heard lower by $20/t at $1,790/t-$1,830/t
500N adjusted down by $20/t to $1,780/t-$1,820/t

Group III

The 4 cSt grade edged up by $120 to $2,360/t-$2,400/t
6 cSt higher by $120/t at $2,350/t-$2,390/t
8 cSt assessed up by $120/t at $2,200/t-$2,240/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.