Weekly Asia Base Oil Price Report

The price levels that base oils have reached have led to some demand destruction because many blenders were unable to offset the lofty raw material costs, and have reduced base stock purchases and trimmed lubricant output. This situation has led to concerns about lubricant and finished products shortages.

Meanwhile, despite an extended ceasefire, the U.S. and Iran continued to exchange hostilities and Israeli troops advanced further into Lebanon, while U.S. president Donald Trump proposed changes to a memorandum of understanding that was under discussion, citing conditions on nuclear capabilities that Iran said was not prepared to accept.

Crude oil futures jumped by more than 3% on Monday after Iran and the U.S. traded strikes and Israel moved further into Lebanon in ‌its battle with Tehran-backed Hezbollah.

Brent futures rose U.S.$2.78 or slightly above 3% to $93.9 per barrel. Brent and West Texas Intermediate futures had settled down by close to 2% on Friday following Washington- hosted Israel-Lebanon peace talks.

Group I
Group I spot prices continued to lose ground after reaching sky-high levels in the previous two months on signs that supply had started to improve and reduced demand was allowing for more barrels to reach the market. The demand reduction stems from the fact that some blenders and manufacturers had been unable to absorb the high raw material prices and had opted for trimming production rates. Some were also worried about acquiring too much base oil at high prices only to see prices fall over the next few weeks.

A large number of refiners in Asia had been forced to reduce operating rates because of difficulties securing enough crude oil from the Middle East to run their facilities following the closure of the Strait of Hormuz, but this situation was easing as refiners have secured oil from alternative origins. However, some of refiners were still prioritizing distillates production versus that of base oils to maintain national fuel security, or because of economic reasons as gasoline and diesel prices were soaring.

Fresh Group I spot cargoes were reported ex-Southeast Asia, Japan and China, signaling that supplies might be increasing after several weeks of suspended offers. There was also talk about Egyptian material being offered to Asian buyers. The growing availability has caused some buyers to hold off on purchases as they expected supply levels to grow and prices to continue weakening. Indeed, Group I spot prices remained exposed to downward pressure on fresh offers from various origins.

Spot cargoes have surfaced in Thailand, with one producer understood to have offered small cargoes of Group I SN500 for spot transactions, although the supplier was also meeting domestic demand and contract obligations. Thai Lube (TLB) reportedly offered a small Group I SN500 lot near $1,690 per metric ton FCA Thailand for early June loading. There was no bright stock offered from the supplier, indicating that this grade remained fairly tight, although a second Thai supplier was heard to have offered a small spot cargo of bright stock the previous week.

There have been no spot offers heard from an Indonesian producer that typically participates in the spot market, with sources indicating that the supplier may be able to offer some spot availability this month.

A Japanese supplier was understood to have offered a Group I SN150 cargo for June loading this week, following the absence of offers from that country since the beginning of the Iran war. Japanese refiners have been able to secure oil supplies from various origins, including the U.S., Mexico and Russia, along with strategic emergency supplies, to make up for the reduction in flows from the Middle East. Japan typically relies on the Middle East for 95% of its crude supplies. The fact that the country has suffered severe shortages of naphtha due to the export disruptions in the Middle East has made the international news, as the lack of ink, which requires naphtha for its production, has forced food manufacturers to use black-and-white or clear bags instead of the typical, more colorful packaging.

Chinese domestic producers have also offered Group I and Group II spot cargoes for export to reduce domestic inventories and have done so at very competitive levels. Given a seasonal slowdown in terms of base oil demand in China, and supplies expected to rise, domestic prices were exposed to downward pressure. However, the SN500 and bright stock were holding their own because China has a structural deficit of the heavy grades and bright stock, which is also a difficult grade to replace.

Chinese buyers have also shown interest in the emerging spot offers from Southeast Asia, but there was a large gap between offer and bid levels.

A key Southeast Asian Group I and Group II producer has significantly reduced term supplies in May after some reductions in the previous two months, and the producer has informed customers that there may be reductions for Group II supplies in June as well, while Group I availability was expected to improve.

South Korean producer S-Oil — a refiner whose operations are majority owned by Saudi Aramco — was anticipated to start a shutdown at its Group I, II and III plant in Onsan in early May, which was expected to exacerbate the ongoing tight conditions. No updates were forthcoming by the publishing deadline.

In India, Group I import prices have climbed by about $10/t on a CFR basis as volumes were limited. While there has been an increase of spot availability in Asia, the number of cargoes moving to India was anticipated to be limited as prices in other regions were more attractive. At the same time, there was talk about Russian and Iranian Group I barrels becoming available into the Indian market, which placed downward pressure on pricing.

Indian base oil consumers were hoping to acquire most of their requirements from local suppliers. The start of the monsoon season this month was likely to dampen demand as transportation and industrial activities see disruptions due to the heavy rains and potential flooding in many parts of the country.

Group II
Group II prices seemed to have lost momentum after showing weekly upward adjustments since March. Like an airplane that has climbed too high and reaches an aerodynamic stall, base oil prices attained levels that were too steep for most buyers to absorb, and have therefore steadied or fallen slightly. The fact that additional supplies were expected to enter the supply system also exerted downward pressure on pricing.

Lubricant manufacturers have tried to pass on the higher production costs from climbing base oils, additives, packaging and transportation to lubricants and finished product prices. However, lubricant increase implementation remained a challenge as economic uncertainties and high fuel prices dampened consumer spending.

Additional Group II spot offers were anticipated from South Korea, although there was still the risk that any Asian surplus supplies might be shipped to markets where margins were more attractive, such as Europe and the Americas.

A key South Korean refiner, 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.

At the same time, South Korean producer S-Oil was heard to have started a partial shutdown at its Group I, II and III plant in Onsan in early May, which might tighten regional supplies further. No updates were forthcoming by the publishing deadline.

Taiwanese Group II producer Formosa Petrochemical was heard to be focusing on term commitments and domestic product needs, but it was also exporting products for term customers and was expected to offer more spot cargoes in the coming weeks as refinery run rates have improved. A Taiwanese Group II cargo was heard concluded into Singapore, but no additional details were available.

As was the case for its Group I grades, a key Southeast Asian Group I and Group II producer was understood to maintain term supply allocations in May and was likely to keep the same restrictions in place in June, particularly on Group II cuts.

Government mandates were still in place requiring refiners to prioritize fuel production over other refined products such as base oils to help reduce gasoline and diesel prices and ensure transportation and cooking fuel supplies for businesses and the general population, but there has been an increase in refining run rates because of improved access to crude oil volumes. Some refiners have been able to utilize strategic emergency oil supplies and have also imported oil from other origins including the Americas and Africa, although yields were expected to be lower, particularly as far as the heavy grades were concerned.

In China, import prices have climbed to levels that appeared quite impossible for blenders to absorb, although some do not have a choice but to accept these prices because their formulations require base oils from specific producers. Other buyers preferred to purchase domestic product which was offered at more competitive prices. Group II demand has shown a small uptick as buyers have depleted inventories and were looking to replenish stocks.

Some Chinese importers were opting for re-exporting base oils as they were able to achieve higher margins and were keeping these cargoes from going through customs clearance.

In India, Group II import prices were stable-to-lower, with the Group II 70N slipping by $30-40/ton on a CFR India basis on improved availability from Asian suppliers and lackluster buying interest. Prices for Group II 150N and 500N were reported as unchanged from the previous week. There were expectations of additional offers emerging from China, with prices believed to be attractive as Chinese suppliers tried to reduce domestic stocks, although heavy grade volumes were expected to be more limited. Demand in India might also be dampened by the start of the monsoon season that runs from June till September.

Indian refiners seem to have predicted a further global tightening of crude oil supplies moving forward, and have therefore increased the country’s crude imports, particularly from Russia as the U.S. has extended a waiver of sanctions on Russian crude exports. India’s crude imports increased by 11% in May to five million barrels per day, from 4.5 million barrels in April, according to an article in the Hellenic Shipping News.

Group III
The Group III segment saw little relief and prices remained exposed to upward pressure because Middle East production was still largely unavailable, and Asian and European output was insufficient to close the global supply gap. In addition, Asian producers prioritized contract volumes and had little to no extra material to offer, with some customers kept on strict or reduced allocations.

A couple of 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 balance of South Korean refiners has 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 heavier Middle Eastern sour crude slates.

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.

Structural damages to production facilities in the UAE, Bahrain and Qatar by Iranian drone attacks have caused shutdowns and force majeure declarations, with at least two plants said to be unable to resume full production. Even if the plants were running full out, the producers would mostly be unable to ship product out because of the Iranian chokehold on the strait. Damage to the facilities was expected to take several months to be repaired as well.

A Shell/Qatar Petroleum Pearl GTL train 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 declared force majeure on its group operations. The declaration affects contractual obligations, but domestic supplies remain secure and base oil deliveries were expected to resume once the Strait of Hormuz is reopened.

Similarly, ADNOC also suffered some disruptions due to drone attacks, according to sources, but the damage was minimal. As of May, ADNOC had not declared force majeure on its overall LNG or oil exports, despite significant disruptions to shipping in the strait due to the 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.

While some blenders have been able to replace Group III grades with Group II cuts or polyalphaolefins (PAOs) in some cases, those that needed to meet strict compliance with OEM specifications were seeing shortages that affected lubricant supplies and deliveries. PAO prices have also jumped following the start of the Iran war, making them less of a viable option.

A couple of Middle East producers had continued shipping products from storage units in other regions such as Europe and the U.S., but these were expected to have been largely depleted.

In China, Group III availability of Middle East volumes was minimal because of the current supply disruptions, unless some barrels were still in local storage and were being released now. South Korean availability was anticipated to improve over the next few weeks, although suppliers were still focused on meeting contract commitments and have almost no spot volumes to offer. Supply from Southeast Asian producers was limited and prices have moved up. Consumption levels have declined on seasonal factors, partly offsetting the tight supply conditions.

In India, Group III import prices were heard to have climbed by about $50/t on a CFR India basis from the previous week on limited availability. What little product became available in Asia was likely to be moved to other regions such as Europe or the U.S. where prices were higher. Some local requirements were met through domestic supplies of Group III grades, although demand was likely to weaken with the arrival of the monsoon rains. Given the tight Group III conditions on a global scale, some opportunities for Indian Group III exports have emerged, with traders heard to be discussing possible shipments to the U.S.

Shipping

Details of recent base oil shipments emerged during the week. A 6,500-ton cargo was understood to have been shipped from Daesan, South Korea, to Tianjin, China, on the Yue Dan on May 20-25. A 1,500-ton lot was heard to have been shipped from Ulsan, South Korea, to South China on the Marex Sara on May 20-25. A few cargoes were being discussed for shipment this month:

• A 7,500-ton parcel was discussed for shipment from West Coast India to U.S. East Coast in the first half of June.
• Approximately 25,000 tons were mentioned for shipment from Yeosu, South Korea, to West Coast India in mid-June.
• A 2,600-ton lot was quoted for shipment from Onsan, South Korea, to Thailand in June.
• A 3,000-ton cargo was expected to be shipped from Tianjin, China, to West Coast India between June 1-20.
• 4,800-5,800 tons were anticipated to be shipped from Yanbu and Jeddah, Saudi Arabia, to Singapore between June 10-15.
• Another 17,500 tons were mentioned for shipment from Yanbu and Jeddah to West Coast India between June 1-5.
• A 3,000-ton lot was on the table for shipment from Taiwan to Karachi, Pakistan, in the second half of June.
• A 1,400-ton parcel was quoted for lifting in Yeosu, South Korea, to Yokohama, Japan, between June 10-17.

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 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-ton-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 temporarily for damage assessments. 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, 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 plant shutdowns 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

• CNOOC Taizhou started a turnaround at its Group I/II plant in Jiangsu, China, in mid-April that will be completed in mid-June.
• Petrochina Fushun started a turnaround in early May that will be completed in late June at its Group I plant in Fushun, China.
• Pertamina was expected to embark on a one-month turnaround at its Group I plant in Cilacap, Indonesia, in April.
• Idemitsu was expected to start a scheduled turnaround at its Group I plant in Chiba, Japan, in mid-May that will last until July. The company secures Group III base oils required for its high-performance and eco-friendly engine lubricants through a partnership and a memorandum of understanding (MOU) with Saudi Aramco Base Oil Company (Luberef).
• 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 shut down its Group II/Group III plant in Yeosu, South Korea, in early May to complete a month-long turnaround. The plant was expected to have been restarted.
• 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

• SK-Pertamina (Patra SK) will complete a 40-day turnaround at its plant in Dumai, Indonesia, which started in early May, in mid-June.
• Petronas was heard to have postponed a turnaround at its Group II/III Melaka plant in Malaysia from June to August 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 climbed on Monday after falling the previous week following an exchange of attacks between the U.S. and Iran, dampening hopes that ongoing negotiations would result in a lasting peace agreement.

• Brent August 2026 futures were trading at $94.09/bbl on June 1, down from $98.34/bbl for front-month futures on May 25 (ICE Futures Europe).
• Dubai crude futures (Platts) for June 2026 settled at $88.37/bbl on May 29, down from $95.70/bbl for front-month futures on May 22 (CME).

Base Oils
Spot base oil prices in Asia were mixed this week, with some assessments stabilizing, others falling on expectations of improved supply, and some edging up on persistently tight fundamentals. Prices have been notionally adjusted to reflect current market conditions and sentiment, but trading continued to be limited on reduced supply levels 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 $50/t to $1,700/t-$1,740/t
SN500 adjusted down by $20/t to $1,730/t-$1,770/t
Bright stock stable at $1,880-$1,920/t.

Group II
150N steady at $1,830/t-$1,870/t
500N unchanged from the previous week at $1,840/t-$1,890/t

FOB Asia

Group I
SN150 edged down by $50/t to $1,590/t-$1,630/t
SN500 lower by $10/t at $1,640/t-$1,680/t
Bright stock prices adjusted down by $40/t to $1,780/t-$1,820/t

Group II
150N assessments steady at $1,780/t-$1,820/t
500N also stable at $1,780/t-$1,820/t

Group III
4 cSt edged up by $220 to $2,740/t-$2,780/t|
6 cSt higher by $220/t at $2,730/t-$2,770/t
8 cSt assessed up by $220/t at $2,580/t-$2,620/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.