Weekly Asia Base Oil Price Report

The Israeli military said it had attacked several targets at Karun petrochemical complex in Mahshahr, southern Iran, on Monday morning, following attacks in Lebanon during the week. The large petrochemical complex is one of Iran’s key oil and gas production sites. Reuters reported that the attacks occurred despite U.S. President Donald Trump ostensibly telling Israeli Prime Minister Benjamin Netanyahu to refrain from ​further strikes.

Meanwhile, Houthi rebels in Yemen announced a naval blockade against Israel in the Red Sea on Monday. The Iran-backed militia has targeted vessels passing near parts of Yemen since the war in Gaza began in 2023, including some ships with no links to Israel. That is one of the reasons why ships going through the Red Sea have also been more limited in number, as shipping operators have been concerned about Houthi attacks, exacerbating the current shipping constriction in the Middle East.

Brent futures jumped by more than U.S.$4 per barrel on Monday, on renewed concerns about the fresh Israeli strikes ‌on Lebanon and Iran, which dampened hopes for an imminent end to the war and a resumption of crude flows. At the same time, OPEC+ announced that it planned to increase output by 188,000 barrels per day in July, although analysts said that most of the supplies would still be trapped in the Middle East if the strait was not reopened.

Group I
Group I spot prices were softer because availability levels have grown slightly as additional producers have attained a more comfortable position inventory-wise and are able to offer spot cargoes. However, buyers remained cautious about purchasing fresh volumes at steep levels as they felt that prices may be going down in the next few weeks. Demand has started to decline as some consumers trim purchases given financial challenges and economic uncertainties that may affect lubricant consumption in the coming months. That said, some buyers who typically rely on spot purchases had an immediate need to replenish stocks and were eager to attain spot supplies.  

Availability of both Group I and Group II grades was expected to grow in Asia as refiners who had been forced to reduce operating rates because of difficulties securing enough crude oil from the Middle East have secured oil from alternative origins and were ramping up rates. However, some of the refiners were still prioritizing distillates production to protect national fuel security.

Fresh Group I spot cargoes were reported ex-Southeast Asia, Japan and China, reflecting an increase in supplies after several weeks of suspended offers. It was heard that a Japanese supplier that had offered a Group I SN150 cargo had been unable to attract bids at the expected levels, but this could not be confirmed. Japanese refined products supplies were anticipated to improve because the country has secured crude oil from sources other than the Middle East, with a couple of cargoes from Alaska, U.S., and South Sudan arriving this week.

An Indonesian producer was understood to have issued a tender involving up to 200 metric tons of Group I SN130 on June 5. The Indonesian producer had not been actively offering spot cargoes over the previous three months as it was focusing on meeting contractual obligations, but had been expected to begin offering spot supplies this month.

Spot cargoes have surfaced in Thailand as well, with one producer understood to have offered small cargoes of Group I SN500 and bright stock for spot business, although the supplier continued to prioritize domestic demand and contract obligations. The Thai producer reportedly offered a small Group I SN500 lot in the high $1,600s per ton and brightstock in the low $1,800s/ton FCA Thailand for June loading, reflecting small downward adjustments from the previous week. A second Thai supplier was heard to have offered a small spot cargo of bright stock as well.

As previously reported, 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.

Chinese domestic producers have seen an uptick in buying appetite for locally produced Group I grades as import cargoes were too expensive and buyers feared not being able to offset the steep indications through higher lubricant prices. Most buyers tried to use up existing inventories or relied on domestic production, but demand has also declined due to seasonal patterns.

Bright stock demand seemed to be holding up better than other grades and buyers appeared more willing to accept high import prices. A general deficit of bright stock in China also supported pricing.

In India, Group I import prices have surged as offers were more limited given that several cargoes have been diverted to regions with higher margins. Despite weakening demand on the eve of monsoon rains and potential manufacturing and transportation disruptions, domestic producers were trying to maintain prices as feedstocks were more costly and prices were also lifted because values for imported products have increased as well. However, suppliers were also concerned about high inventories and adjusted domestic prices for the light grades down to attract business. Prices for the heavy grades, on the other hand, saw slight upward adjustments.

Group I imports have climbed by about $50-70/t on a CFR India basis week-on-week, with the exception of brightstock, which was steady to softer because of lackluster demand.

Group II
Group II prices were generally stable to slightly lower, with some suppliers adjusting prices down for July shipments as they made efforts to lower inventories and avoid further demand destruction. The steep prices that Group II base oils had achieved in the previous weeks had spooked some consumers who foresaw difficulties in offsetting the mounting production costs and had withdrawn from the market. The fact that additional supplies have started to enter the supply system also exerted downward pressure on pricing.

Refiners in various nations 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, as most refineries have been built to run on Middle East crude slates. A few Group II refiners that also produce Group III cuts were expected to increase Group III output to fill production gaps and to capitalize on soaring Group III margins.

Some of the fresh spot supplies were expected to be lured to markets such as Europe and the Americas, where prices were hovering at higher levels than in Asia, although steep freight rates may inhibit some of the proposed transactions.

Lubricant manufacturers have endeavored to transfer higher production costs from climbing base oils, additives, packaging and transportation prices to lubricants and finished product prices. However, lubricant increase implementation has been challenging given high fuel prices and economic uncertainties that dampened consumer spending, deepening blenders’ concerns about acquiring too much base oil at elevated price levels.

Additional Group II spot offers were coming to market from South Korea, where plants were said to be running well. A key producer was heard to have concluded shipments to the U.S., Thailand, China and Singapore this month.

A second key South Korean Group II 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 reported to have offered spot cargoes as well.

Taiwanese Group II producer Formosa Petrochemical was understood to be focusing on term commitments and domestic product needs, but it was also offering flexibag volumes for spot business.

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

In China, import prices have been supported by a lack of offers, but plentiful domestic supplies were able to meet a large part of the current demand. Offers of Taiwanese products have surfaced, but at higher levels than domestic prices. South Korean offers were also heard to have attracted some attention, although prices were deemed less attractive than domestic prices.

Chinese Group II suppliers have extra barrels in their hands and have therefore pursued export opportunities into Southeast Asia and India.

In India, Group II import prices seemed to have reversed course as buyers have not been able to secure volumes because regional cargoes have been lured to other markets with higher pricing. However, demand in India was also expected to be dampened by the start of the monsoon season that runs from June till September.

Spot offers for imports into India have increased from last week, with the exception of the Group II 70N, which was steady. Import prices for Group II 150N and 500N have climbed by around $50/ton on a CFR India basis.

There were expectations of additional offers emerging from China, with prices believed to be attractive as Chinese suppliers were striving to reduce domestic stocks.

Group III
The Group III segment continued to be affected by global supply shortages because base oil plants in Qatar, Bahrain and Abu Dhabi have seen output disruptions after suffering Iranian drone attacks (for more details, please see the Production section below), and vessels carrying base oils from the Persian Gulf are largely unable to transit the Strait of Hormuz, although a very limited number of tankers were heard to have been allowed through in recent days.

Asian and European output was insufficient to close the Group III supply gap. Many Asian Group III cargoes were being drawn to the U.S. and Europe where prices were more attractive. In addition, Asian producers prioritized contract volumes and had little to no extra material to offer for spot business, with some customers kept on strict or reduced allocations.

Despite the fact that a couple of Asian producers had cut run rates due to a shortage of Middle East crude oil, run rates have started to improve as some countries have started to receive crude oil from other origins outside the Persian Gulf, or have resorted to using strategic emergency reserves. Producers whose plants manufacture both Group II and Group III grades were expected to optimize Group III output given the current tightness and elevated pricing.

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 exclusively 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.

In China, import prices remained very high given the absence of most Middle East volumes, more limited regional availability and the fact that supplies were attracted to other regions because of more advantageous margins. Local producers were trying to meet some of the ongoing demand, with domestic prices holding at firm levels for the most part. Supply from Southeast Asian producers was limited and prices have moved up.

In India, Group III import prices surged by $100/ton on a CFR India basis from a week ago on extremely scarce availability of foreign Group III cuts and very limited supplies from the local Group III producer.

Shipping
Details of recent base oil shipments emerged during the week. About 17,000 tons were understood to have been shipped from Ulsan, South Korea, to Mumbai, India, on the Hakuba Galaxy in early May. An additional 12,500 tons were heard to have been loaded in Ulsan for Mumbai on the Ginga Blue Shark in mid-May.

A handful of cargoes were being discussed for shipment this month:

• A 10,000-15,000-ton cargo was mentioned for shipment from Haldia, India, to the U.S. Gulf between June 10-20.
• A 2,700-ton parcel was quoted for shipment from Onsan to Huizhou, China, in June.
• A 1,220-ton parcel was discussed for shipment from Onsan to Merak, Indonesia, in the first half of June.
• About 3,000 tons were expected to be lifted in Onsan for Indonesia in the second half of June.
• A 2,800-ton lot was quoted for shipment from Onsan to China in mid-June.
• About 40,000 tons were mentioned for shipment from Yeosu, South Korea, to West Coast India between June 10-20.
• 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.
• 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- 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 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 by more than $4 per barrel on Monday, erasing Friday’s losses, on reports of Israeli attacks on facilities in Iran and Lebanon, and Iran’s retaliatory strikes on Israeli targets. Iran also said that the Strait of Hormuz would only reopen under new stipulations by Iran and Oman, including a transit fee.

• Brent August 2026 futures were trading at $97.58 per barrel on June 8, up from $94.09/bbl for front-month futures on June 1 (ICE Futures Europe).
• Dubai crude futures (Platts) for July 2026 settled at $85.56/bbl on June 5, down from $88.37/bbl for front-month futures on May 29 (CME).

Base Oils
Spot base oil prices in Asia were again mixed this week, with some assessments reported as stable, others softening 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 $20/t to $1,680/t-$1,720/t
SN500 adjusted down by $10/t to $1,720/t-$1,760/t
Bright stock lower by $10/t as well at $1,870-$1,910/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 $10/t to $1,580/t-$1,620/t
SN500 lower by $10/t at $1,630/t-$1,670/t
Bright stock prices adjusted down by $40/t to $1,740/t-$1,780/t

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

Group III
4 cSt edged up by $30/t to $2,770/t-$2,810/t
6 cSt higher by $30/t at $2,760/t-$2,800/t
8 cSt assessed up by $30/t at $2,610/t-$2,650/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.