Weekly Asia Base Oil Price Report

Asian refiners worried about the potential Saudi crude oil supply disruptions, as many have been receiving increased shipments from that origin given that cargoes from producers on the Persian Gulf remained blocked. A number of base oil producers have halted spot offers as they sought to protect existing stocks to meet contract commitments until a clearer crude supply situation emerged.

With trading generally thin in Asia, base oil spot price indications for Group I and Group II cuts remained exposed to downward pressure as supplies have grown and edged up for Group III base oils given severe global shortages and expectations of persistent output and transportation disturbances.

Group I
Group I base oil prices continued under pressure due to an increase in supply levels amid weakening regional demand in recent weeks, but trading was almost at a standstill this week as producers paused their offers given crude oil and feedstock supply uncertainties. Some traders continued to pursue spot opportunities as they were holding stocks and buyers were eager to replenish inventories that had been depleted as they had delayed purchases for as long as possible. Given the possibility of further Middle East oil supply disruptions, consumers were worried about future base oil availability as well.

Most Asian refiners depend on Middle East crude oil shipments to run their facilities, and operating rates had already been severely affected by the oil supply crunch that ensued at the start of the Iran war. Over the last two or three months, some refiners had been able to secure crude cargoes from origins other than the Middle East, or had increased crude imports from Saudi Arabia, as these were able to be moved through the Red Sea. However, with Iran-backed Houthi rebels blocking the Bab el-Mandeb Strait and threatening to attack tankers in the Red Sea, it was uncertain whether Saudi shipments could proceed safely. This applied both to crude oil shipments, as well as to base oils.

While various governments had also allowed refiners to tap into strategic emergency crude stocks, these were close to being depleted and there were concerns that few fresh crude cargoes from the Middle East would become available if transit through both the Strait of Hormuz and the Bab el-Mandeb Strait were blocked. With fuel shipments having been disrupted as well and rising concerns about fuel shortages, a few refiners might have to focus on fuel production and reduce output of other refined products such as base oils.

A Japanese refiner will be starting an extended turnaround at its refinery this month, and even though the unit will be down until close to the end of the year, the base oils plant was expected to continue running, albeit at reduced rates due to the curtailed upstream feedstock supply.

Several producers, including Thai and Indonesian suppliers who had offered small spot cargoes in the previous weeks, have retreated from the spot market as they prioritized contract commitments. A key Thai producer was heard to have suspended offers for a second week because of oil supply concerns. The Indonesian supplier that had been active earlier in July appeared to have suspended offers in August as its supplies were heard to be tight.

At the same time, there were expectations of increased availability in August from a key Southeast Asian producer that had restricted Group I and Group II term supplies over the previous three or four months.

While a number of South Korean refiners have increased import volumes of crude oil from Saudi Arabia since the start of the Iran war, some countries such as China — the world’s largest importer of crude oil — reduced crude oil imports in the second quarter following higher crude oil prices that resulted from disrupted flows through the Strait of Hormuz. China’s falling imports led to lower global demand, softening the upward price impact that came from the supply disruptions in the Middle East.

A tightening of domestic base oil supplies has encouraged local refiners in China to increase Group I prices. Competition from imports has also been subdued because prices had moved up too high to work for Chinese buyers. Bright stock prices in particular were inching up on snug regional availability of small spot cargoes and prospects of further supply reductions as a key domestic producer starts a turnaround. With Thai offers having been largely suspended and import prices holding firm, there were few alternatives for Chinese consumers other than to accept domestic offers.

In India, Group I prices were largely stable, but have started to see upward pressure given the uncertainties related to potential disruptions of Group I and Group II base oil supplies from Saudi Arabia as shipments in the Red Sea have come under Houthi threats. If the Houthi rebels continue to attack vessels and to block the Bab el-Mandeb Strait, then Saudi Arabian cargoes would have to be rerouted through the Suez Canal and around the Cape of Good Hope in South Africa to reach India, which would mean that delivery times and freight rates would climb significantly. There was also talk about Saudi oil tankers offloading crude at Egypt’s Ain Sokhna port on the Red Sea, then pumping the oil through the SUMED pipeline to Sidi Kerir on the Mediterranean coast and reloading it onto waiting vessels to continue voyages. In any case, the situation remained very volatile, and it was not clear whether Houthi attacks would cease since Iran was supposed to engage in negotiations with the U.S. to end hostilities.

In the meantime, Indian base oil consumers tried to secure domestic cargoes, which they have favored since the start of the Iran war because of the international price increases and supply disruptions that have affected imports. Russian volumes have also dwindled given damage to energy facilities from Ukrainian drone strikes as the Russian war on Ukraine rages on.

Group I import prices on a CFR India basis were stable, with the exception of bright stock, which saw small increases because of limited regional availability.  

Group II
Group II prices were softer due to growing supply levels in Asia and lackluster buying appetite, although refiners continued to monitor the crude oil supply situation in the Red Sea, which could lead to reduced crude oil supplies moving to Asia. Several refiners had been able to secure crude shipments from origins outside the Middle East and hoped to be able to continue receiving these cargoes, although some refineries were not running at optimum rates because of the alternative crude slates.

Despite the potential Saudi crude oil supply disruptions, most South Korean refiners appeared to be able to run plants at high rates. South Korea had increased crude imports from Saudi Arabia after the start of the Iran war, when shipments from producers on the Persian Gulf were halted after the closing of the Strait of Hormuz. Asian refiners were therefore keeping a close eye on Saudi shipments amid the threat of fresh disruptions due to Houthi rebels’ attacks on tankers loading in Saudi Arabia.

The sole Taiwanese producer increased operating rates in July following an unexpected shutdown in late June due to feedstock supply issues at the affiliated refinery, and it was able to offer small spot cargoes as well. However, the producer was expected to start building inventories to cover contract commitments during a scheduled turnaround in October, so extra supplies may be limited. The producer was heard to have rolled over its discounts to term customers from July into August and left list prices unchanged.

Demand has also weakened in Asia because some blenders faced difficulties in recouping rising production costs, and they were running plants at reduced rates or suspended production temporarily until they were able to place most of their lubricant inventories and recovered some of their invested resources.

Additionally, increased Group I and Group II term supplies from a key Southeast Asian producer in August have brought relief to many buyers, who were less inclined to seek spot supplies as the strict allocations from the previous months appeared to have been lifted.

The easing supply-demand balance in Asia has encouraged some suppliers to look for export opportunities into markets such as the U.S. and Latin America, but steep freight costs and logistical difficulties have thwarted some of this business.

In China, demand was sluggish as blenders were concerned about lubricant consumption levels and therefore opted to secure enough base oils to keep operations running but not accumulate too much inventory.

The price of Group II imports remained firm, and buyers have turned to domestic supplies whenever possible, although term shipments continued to arrive as scheduled, more so since supply levels in Asia have improved. This situation has also prompted importers to wait until a clearer price picture emerged before procuring additional volumes, as they did not want to secure cargoes at steep prices that may lose value later given rising supplies. The heavy grades may be an exception as they are typically tight in China and buying interest in imports is usually robust. Domestic suppliers have increased posted prices given the tighter supply fundamentals and reduced import volumes.

In India, domestic suppliers were running plants at high rates and buyers were encouraged to rely more heavily on locally produced material and avoid logistical risks, particularly as imports from Saudi Arabia may be curtailed or delayed given that vessels loading at Red Sea ports may have to be rerouted via the Suez Canal and take longer to reach India.

Domestic producers have increased prices this week on firm crude oil and feedstock prices and expectations of potential supply disruptions. A few blenders were using Group II base oils to replace Group III cuts in some applications, leading to increased buying interest in Group II cuts and driving prices to higher levels as well.

Group II import prices have edged up, with the 70N grade in particular heard to have registered a jump of around $80-90 per metric ton, and the 150N and 500N seeing increases of $10-30/ton on a CFR India basis. A Houthi blockade of the Bab el-Mandeb Strait and potential attacks on vessels could halt base oil shipments from Saudi Arabia, possibly leading Indian buyers to seek cargoes from other origins where prices might be steeper.

Group III
The ongoing disruption to vessel traffic in the Strait of Hormuz and curtailed output from three key producers on the Persian Gulf have exacerbated global Group III base oil supply shortages. Even though Asian refiners and producers in other regions have been trying to fill the supply gap left by the absent Middle East Group III volumes, it was not possible to meet all global requirements, sending prices to fresh highs.

Group III global supply shortages might be deepened as ship operators were reluctant to attempt passage of the Strait of Hormuz and Bab el-Mandeb Strait until they could have full assurance that crews and vessels would be safe. Last week, at least two vessels were hit by Houthi militants, and two vessels had to turn around in the Red Sea due to drone threats.

Aside from the impossibility of moving cargoes out of the Persian Gulf, where the facilities of producers Adnoc, Bapco and Shell Qatar Pearl GTL are located, plants have also suffered damages from Iranian drone and missile attacks, with the Pearl plant not expected to be able to bring back production at one of its base oil trains until next year.

A Malaysian Group III producer was expected to be preparing for a turnaround starting in late August and might have restricted spot offers as it was focusing on meeting term commitments, although direct producer confirmation was unavailable.

In China, domestic Group III prices inched up in line with rising international prices as global supplies remained severely curtailed. Given the difficulties in securing Group III cargoes on the international stage, a couple of Chinese suppliers have offered Group III parcels for export to Southeast Asia as prices there were higher than at home, but acceptance of this material was limited due to the lack of approvals that some applications required.

A turnaround at a Chinese base oils plant that started in early July and was not expected to be completed until the end of August tightened supplies further.

In India, Group III import prices continued to hover at elevated levels, climbing by $10/ton on a CFR India basis this week given global supply deficits and the fact that many cargoes have been lured to regions where prices were even higher than in India.

Steady Group III production at an Indian refinery has allowed buyers to meet a growing portion of their requirements, as long as the Group III cuts did not need to carry approvals, and many blenders were also resorting to using Group II base oils to replace Group III grades in some applications. A couple of traders were heard to have offered Group II light grades of Chinese origin, adding to the growing local supplies.

Indian Oil started to supply Group III base oils from its plant in Haldia in December 2025, and additional Group II and Group III capacity was scheduled to come online at the Gujarat plant in the third quarter of 2026. Group II grades were anticipated to be already available this month, according to sources.

The producer in India has also been able to offer Group III cargoes for export, particularly as domestic consumption has weakened because of the hefty pricing and a seasonal slowdown in lubricant demand.

Shipping

Details about a recent transaction emerged during the week, with a 13,200-ton cargo heard to have been lifted in Ulsan, South Korea, for Map Ta Phut, Thailand, on the SC Virgo in mid-July.

Few fresh cargoes were discussed for August DHshipment this week, with the following inquiries having surfaced the previous week:

A 7,000-ton cargo was discussed for loading in Thailand to West Africa between August 20-30.

About 4,000 tons were expected to be lifted in Tianjin, China, to Mumbai in the first half of August.

About 12,000 tons of base oils were quoted for shipment from South Korea or India to West Africa in August.

Between 15,000 to 20,000 tons were mentioned for possible shipment from South Korea to West Coast India between August 15-20.

A 6,000-ton lot was being considered for shipment from Yeosu, South Korea, to Vietnam in the first half of August.

A 3,000-ton cargo was being considered for loading in South Korea to Pakistan around Aug. 10.

Production

Middle East plants

Qatar Energy halted production of liquid natural gas (LNG) and other products following drone attacks on its facilities in Ras Laffan and Mesaieed in early March. The facility will not be able to return to normal production for several months, and has declared force majeure on LNG shipments, according to the company’s website. One train at 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. The damaged train was expected to remain shut down for several months, possibly a year, until repairs to the highly specialized equipment are completed.

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 under control without providing further details about potential damage. 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. An official report was not available by the publishing deadline.

In Abu Dhabi, United Arab Emirates, a suspected drone strike had triggered a fire at the Ruwais Industrial Complex, leading authorities to shut down the country’s flagship refinery as a precautionary measure on March 10. The Ruwais complex houses ADNOC’s Group II and Group III base oils plant. According to sources familiar with ADNOC’s operations, the base oil unit was not damaged during the drone attack as only one train of the refinery had been affected by the strike, although it was reportedly running at reduced rates. The producer appeared to have been able to maintain base oils output for its own downstream lubricant operations. The latest information indicates that ADNOC was preparing to ramp up production following news of a ceasefire in the Middle East in late June, although these plans have been derailed by a resumption in hostilities and renewed closing of the Strait of Hormuz on July 8. The distributor of ADNOC material in the U.S. was compelled to declare force majeure on contract shipments as no fresh base oil cargoes have been able to be lifted in Abu Dhabi.

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 was expected to have been completed in mid-June.

Petrochina Fushun started a turnaround in early May that was completed last week 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 Japan in recent years.

Pertamina reportedly embarked on a one-month turnaround at its Group I plant in Cilacap, Indonesia, in April 2026.

Luberef postponed a 30-day turnaround at its Group I/Group II plant in Yanbu, Saudi Arabia, from August to October 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 for the 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

Formosa Petrochemical unexpectedly shut down its Group II base oils plant in Mailiao, Taiwan, due to feedstock supply issues given technical problems at the affiliated refinery, in early July, but restarted production the second week of July. Some shipments suffered small delays. Formosa has postponed a scheduled turnaround and catalyst change plant from the fourth quarter of 2025 to October 2026.

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 have resumed 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 in June.

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.

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 and was expected to complete a Group II/Group III expansion at Gujarat in the third quarter of 2026.

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 late August 2026, with a restart expected at the end of September.

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

Prices

Crude Oil
Crude oil futures plummeted in early Asian trading on Monday after President Trump abandoned plans of another round of military strikes on Iran, raising hopes that diplomatic negotiations would lead to a reopening of the Strait of Hormuz and avert a broader regional conflict.

Brent futures were trading at $83.32 per barrel on August 3, down from $90.88/bbl for front-month futures on July 27 (ICE Futures Europe).

Dubai crude futures (Platts) for August 2026 settled at $81.10/bbl on July 31, down from $84.49/bbl for front-month futures on July 24 (CME).

Base Oils
Spot base oil prices in Asia were moving in opposite directions this week, with Group I and Group II spot trading remaining thin due to market uncertainties linked to the Middle East conflict, and Group III moving up given persistently tight fundamentals and regional shortages. 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, as there was hardly any spot product to be obtained.

The price assessments 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 holding at $1,460/t-$1,480/t
SN500 adjusted up by $50/t to $1,520/t-$1,560/t
Bright stock holding at $1,680-$1,720/t

Group II
150N was down by $10/t at $1,730/t-$1,770/t
500N was also lower by $10/t at $1,740/t-$1,780/t

FOB Asia

Group I
SN150 fell by $50/t to $1,250/t-$1,290/t
SN500 lower by $40/t at $1,260/t-$1,300/t
Bright stock prices edged down by $20/t to $1,380/t-$1,420/t

Group II
150N assessments were down by $50/t at $1,650/t-$1,690/t
500N slipped by $50/t to $1,670/t-$1,710/t

Group III
4 cSt jumped by $50/t to $3,280/t-$3,330/t
6 cSt moved up by $50/t as well to $3,270/t-$3,320/t
8 cSt also assessed up by $50/t at $3,120/t-$3,160/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.