Weekly Asia Base Oil Price Report

Brent oil futures fell on Monday after Qatar and Pakistan representatives, who served as mediators during the negotiations, said U.S. and Iranian officials had agreed on a plan to reach a final deal within 60 days. Brent futures settled slightly below $80 per barrel — a substantial drop from a high of $126/bbl in late April. The lower crude oil and feedstock prices was also exerting downward pressure on base oils. The Group III category was an exception, as prices continued to move up given that a large part of global capacity remained captive in the Middle East while overall demand was still robust. However, the increases were more modest than in the previous weeks, signaling that prices were losing momentum.

Group I
Group I spot prices continued on a downward trek as additional spot barrels have become available because of increased production rates and weaker demand. The lower consumption levels were partly the result of the extremely high prices that base oils had achieved in late April/early May, which turned out to be unsustainable as buyers were unable to absorb them. A combination of credit limitations, cash flow constraints and difficulties in passing the steeper production costs down the supply chain led many blenders to trim operating rates or shut down temporarily, which in turn resulted in reduced base oil orders.

Some lubricant manufacturers also turned cautious and secured fewer cargoes as prices were declining and they preferred to wait until prices stabilized, while others had no choice but to accept the current pricing as their inventories were low.

Many refiners in Asia had been unable to run refineries at full tilt after the start of the war in Iran because of Middle East crude oil supply constraints, but several countries imported crude oil from alternative sources, or have authorized refiners to use strategic emergency oil supplies. These cargoes had taken a few weeks to arrive but have now been processed, allowing for more refined products to enter the market. At the same time, experts warned that strategic supplies were close to being depleted.

Additional Group I spot cargoes surfaced in Southeast Asia and China, signaling an increase in supply levels after several weeks of suspended offers.

A key Thai producer has offered a number of flexibag cargoes for June loading, with Group I SN500 hovering near $1,615 per metric ton and bright stock at around $1,780/ton FCA Thailand, reflecting downward adjustments from offers in early June.

While several shipments of Group I base oils from Southeast Asia have been earmarked for Singapore–where imports have surged over the last couple of months due to reduced local availability–a few cargoes have also been offered into India.

As previously reported, a key Southeast Asian Group I and Group II producer had 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 and July as well.

In China, import volumes have plummeted because spot prices are unworkable and buyers turn to more competitively-priced domestic supplies. Ex-tank prices have therefore inched up. However, there is a seasonal slowdown in demand, while the steeper base oil prices seen of late have also discouraged buyers from acquiring too much product that may lose value at a later date.

Given muted demand for finished lubricants, buyers were also hesitant to secure too many domestic cargoes, although bright stock commanded some attention, not only in terms of local availability, but also for imported material, ahead of a domestic plant’s turnaround next month.

In India, Group I import prices have lost territory because of improved availability and falling crude oil and feedstock values. The trend was exacerbated by weaker buying appetite due to the start of the monsoon season, which affects agricultural, transportation and industrial activities. Forecasts call for a much drier season than in years past, triggering concerns about crops, food supply and economic growth.

Imported Group I grades have experienced downward adjustments of around $20/t on a CFR India basis week on week. There were expectations that once the Strait of Hormuz reopened and hostilities ceased, Iranian Group I shipments to India would resume. These supplies are generally offered at competitive levels.

Group II
Group II prices were stable-to-soft, with higher prices in other regions, including Europe and the Americas, tempering a downward trend in Asia on increasing supply levels. Prices peaked after the start of the Iran war because many refiners were forced to trim operating rates due to a lack of Middle East crude flows.

The supply situation has changed because crude shipments from other sources have now arrived in Asia, and some refiners have been able to tap into national emergency oil supplies, which were now nearing depletion.

The use of alternative crudes from sources outside the Middle East has led to reduced output of the heavy grades given the different crude oil slates utilized versus the heavier, sour Arab crude most refineries were built to run on. A small number of 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 netbacks.

At the same time, base oil demand has weakened in Asia because blenders had difficulties transferring the rising production costs onto finished products, opting for running plants at reduced rates or stopping production temporarily. Lubricant increase implementation has been challenging because of high fuel prices, inflation and economic uncertainties that affected consumer spending. However, producers have also found eager takers in other regions where pricing has been higher, which offered support to Asian prices.

South Korean plants were running well and spot supplies have increased, particularly following a turnaround at the Hyundai Oilbank-Shell plant in Daesan which restarted during the first week of May. Back in 2025, the company had announced that it will expand its Daesan refinery to include a Group III base oil unit, with commercial production targeted for 2027.

Group II heavy grade from Taiwan was expected to see some tightening because the sole Taiwanese Group II producer, Formosa Petrochemical, was not receiving enough feedstocks from its associated refinery due to production issues, and the supplier was expected to delay some June term supply shipments into July.

As mentioned previously, a key Southeast Asian Group I/Group II producer was expected to maintain term supply allocations in June and July, particularly on Group II cuts. The situation should improve in August, according to sources.

Some Group I and Group II supplies continued to be shipped from Saudi Arabia, but the volumes were comparatively small.

In China, extra supplies of Group II grades have prompted producers to offer Group II spot export cargoes for loading in late June or early July, with prices expected to be competitive compared to South Korean offers.

Import prices in China have crept up and were considered too high compared to domestic supplies, which drew buyers to secure additional volumes produced locally. The scarcity of imported material supported the rise in domestic prices as well. Most of the imported volumes were meant to fulfill term requirements in any case, with little spot availability reported.

Given the reduced output of Group II 500N in Taiwan due to feedstock supply issues at the associated refinery, volumes moving into China were also expected to be trimmed this month and possibly the next.

In India, Group II import prices have fallen in line with weakening crude oil and feedstock prices and increased availability. Group II 150N and 500N grades saw downward adjustments of $10-20/ton on a CFR India basis, but the 70N underwent a more pronounced decline because it is more directly related to gasoil prices.

Offers from Asian suppliers into India were more limited in general as prices were more attractive in other regions, although there were reports of Chinese Group II grades having been available. But buyers are not jumping at the first offers they receive because the base oils and lubricants market has entered a period of uncertainty given the start of the monsoons, while consumer spending has also been impacted by the war in the Middle East, which in turn could dampen lubricant demand.

Group III
The Group III segment was still showing the most dramatic conditions as a large part of the world’s Group III output remained trapped in the Middle East. Aside from the fact that shipments were unable to traverse the Strait of Hormuz, base oil plants in Qatar, Bahrain and Abu Dhabi have seen output disruptions after suffering Iranian drone attacks.

Shell’s Pearl Gas-to-Liquids (GTL) plant in Qatar—which houses the world’s largest GTL base oils facility—was built with two production units (trains) of equal size. Each of these two trains is capable of processing around 800 million standard cubic feet of feed gas per day. The integrated base oils unit within the plant has a production capacity of 30,000 bbl/d following an Iranian missile strike on the Ras Laffan industrial complex, one of the two trains suffered damage, prompting a full shutdown to assess the facility and initiate repairs. The Qatar Energy refinery that supplies the gas to the Pearl plant also suffered damage during the attack.

Despite hopes that the agreement signed by the U.S. and Iran over the weekend would lead to a reopening of the strait and a resumption of Group III shipments, experts expected for Group III flows to be constrained by production issues at Persian Gulf plants, which were anticipated to undergo extensive repairs. Furthermore, there were rumblings that one of the plants was also scheduled for a turnaround at one of its production trains in September, which could exacerbate supply shortages even if the strait reopened soon.

Asian producers have increased production rates after securing crude oil from alternative sources in the Americas, Africa and Australia, but many still prioritized contract volumes, with customers kept on strict or reduced allocations.

At least one South Korean producer and the Malaysian producer were heard to have been running plants at high rates because the South Korean supplier’s refinery has diversified its crude sources over the last few years, and the Malaysian supplier has been able to utilize domestic crude oil. However, there were reports that the producer in Malaysia was planning to start a 45-day turnaround in August and would be building inventories to cover term commitments.

In China, traders continued to offer Group III spot barrels from Chinese producers to regional buyers because weaker Chinese demand has created a surplus, especially of the heavy grade, but acceptance was more limited than for products from other Asian and Middle East producers. Local prices have moved up because of shortages of Middle East products, with some buyers rushing to secure domestic supplies as there were still uncertainties as to when Group III base oils from the Persian Gulf would become available. A partial turnaround at a local plant that will be restarting this month has tightened domestic supplies as well.

In India, Group III import prices continued to edge up, with prices moving up by $20-50/ton on a CFR India basis, depending on the grade. The 8 cSt cut saw upward adjustments closer to $20/ton because this grade is not as widely utilized.

South Korean exports of various grades to India were heard to have fallen as strong demand in the U.S. and steeper prices lured cargoes away from the region.

Buyers were favoring domestic Group III supplies, which have grown in volume because the local producer was optimizing Group III production and was directing more barrels to commercial and export sales versus its own lubricant operations. The domestic supplies were still not deemed sufficient to meet all requirements, so a number of blenders were also using Group II in those applications that allowed substitution.

Shipping

• A 5,000-ton parcel was quoted for prompt shipment from Daesan, South Korea, to Hamburg, Germany.
• A second lot of approximately 6,000 tons was mentioned for possible loading in Daesan to Rotterdam, The Netherlands, this month.
• Approximately 5,000-10,000 tons were on the table for shipment from China to West Coast India at the end of June.
• A 2,000-4,000-metric ton cargo was discussed for shipment from Thailand to West Coast India in late June.
• About 1,500 tons were expected to be shipped from Onsan, South Korea, to Merak, Indonesia, at the end of June.
• A 3,000-6,000-ton lot was mentioned for possible shipment from Thailand to Greece in the second half of July.
• A 6,400-ton parcel was quoted for shipment from Yeosu, South Korea, to Vietnam and/or Malaysia in the first half of July.

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 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.
• 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.
• Pertamina was expected to embark on a one-month turnaround at its Group I plant in Cilacap, Indonesia, in April.
• 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.
• In China, Shanxi Lu’an started a partial turnaround at its plant in Changzhi in late May and was expected to restart around June 22.
• 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 slipped on Monday following U.S.-Iran negotiations in Switzerland and Tehran stating that it had secured a waiver of sanctions on its crude oil and fuels exports.

• Brent August 2026 futures were trading at $79.26 per barrel on June 22, down from $82.90/bbl for front-month futures on June 15 (ICE Futures Europe).
• Dubai crude futures (Platts) for July 2026 settled at $73.62/bbl on June 18, down from $80.83/bbl for front-month futures on June 12 (CME). There was no posting on June 19 due to the Juneteenth holiday in the U.S.

Base Oils
Spot base oil prices in Asia were mixed again this week, with some assessments reported as stable, others softening on expectations of improved supply and lower feedstock costs, 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 and transactions remained difficult to track, especially for Group III grades.

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 steady at $1,660/t-$1,700/t
SN500 adjusted down by $20/t to $1,680/t-$1,720/t
Bright stock lower by $20/t at $1,840-$1,880/t

Group II
150N adjusted down by $20/t to $1,800/t-$1,840/t
500N was lower by $40/t at $1,790/t-$1,840/t

FOB Asia

Group I
SN150 edged down by $20/t to $1,540/t-$1,580/t
SN500 lower by $40/t at $1,560/t-$1,600/t
Bright stock adjusted down by $40/t to $1,660/t-$1,700/t

Group II
150N assessments heard down by $10/t at $1,770/t-$1,810/t
500N was down by $10/t at $1,770/t-$1,810/t

Group III
4 cSt grade up by $60/t to $2,910/t-$2,950/t
6 cSt higher by $50/t at $2,890/t-$2,930/t
8 cSt assessed up by $50/t as well at $2,740/t-$2,780/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.