Weekly Asia Base Oil Price Report

Global crude oil prices surged as traders grew concerned about prolonged supply disruptions, particularly after President Trump signaled that the U.S. would not give in to Iran’s demands. Brent futures traded at around U.S.$84 per barrel on Monday, significantly lower than their peaks near $101/bbl in early March, but still higher than $72/bbl in late February, before the war started.

Asian refiners worried about potential Saudi crude oil supply disruptions and increased freight and insurance rates, as many have been receiving substantial volumes from that origin given that shipments 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.

Group I

Uncertainties related to the ongoing war in Iran and the closing of Hormuz reignited concerns about extended crude supply disruptions in Asia, not only among oil traders, but also among base oil producers who depend on Middle East crude shipments. While the first shock of the disruptions following the start of the war in late February had subsided because Asian producers had been able to source oil from alternative origins, the potential decrease in shipments from Saudi Arabia could exacerbate the current supply crunch once again.

As a result, several base oil producers have suspended spot offers as they sought to protect their crude oil stocks and meet base oil contract commitments.

Many Group I and Group II base oil barrels also move to Asia from Saudi Arabia but given that Iran-backed Houthi rebels were blocking the Bab el-Mandeb Strait and threatened 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 refined products such as base oils, and drove Group I spot prices up.

Despite the fact that consumers were worried about future base oil availability given the possibility of further Middle East oil supply disruptions, buying interest was subdued as many seemed content to use existing stocks and run blending plants with base oil barrels acquired under contract. Buyers preferred to wait until there was more price clarity.

There appeared to be no fresh spot offers from Thai and Indonesian suppliers who had offered small spot cargoes in late July, but were now prioritizing contract commitments. A key Thai producer was heard to have suspended offers 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, an increase in term and spot supplies from a key Southeast Asian refiner and spot offers emerging from China have partly mitigated concerns about base oils supplies in the region.

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.

Tighter domestic base oil availability in China has given local refiners room to raise Group I prices. Import competition has remained limited, as higher international prices have made overseas material less economical for Chinese buyers. Bright stock values, in particular, have continued to edge higher amid constrained regional availability of small spot parcels, with further supply tightening expected as a major domestic producer began a scheduled turnaround.

With Thai offers largely off the market and import prices remaining firm, Chinese buyers have had limited alternatives and have increasingly had to accept heftier domestic prices, but a slowdown in offtake from the lubricants sector kept fresh product inquiries rather subdued.

In India, Group I imports were exposed to 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 threat. It was therefore still up in the air whether vessels could leave or reach Saudi ports. Saudi Arabia is one of the main suppliers of Group I and Group II cargoes to India. In 2025, India remained the world’s largest importer of base oils, registering over 3 million metric tons in total annual import volume, with Saudi Arabia coming in as its fourth largest source.

Even if shipments manage to load at Red Sea ports, vessels would likely be rerouted through the Suez Canal and around the Cape of Good Hope in South Africa to reach India, which would increase delivery times and freight rates.

Group I import prices have edged up by $10-20 per ton CFR India from the previous week. Given climbing import values, base oil consumers favored domestic cargoes, but local suppliers were seeking export opportunities to other countries where values were higher, and this reduced their spot availability.

Group II

In contrast to Group I base oils, Group II prices were under pressure because of more plentiful supplies against slowing demand, although the same conditions regarding potential crude oil and base oil supply disruptions from Saudi Arabia applied to this segment as well.

Several refiners depend on Middle East crude oil to run their refineries at optimum rates, and a supply shortage in the early days of the Iran war had driven many producers to seek crude shipments from origins outside the Middle East. Some refiners have seen lower yields due to the switch, but many seemed to be running well.

A key Southeast Asian producer was reported to have lifted its strict allocations from the previous months, and additional supplies were anticipated to become available over the next few weeks.

The sole Taiwanese Group II producer and South Korean suppliers were also actively offering small spot cargoes this month. Even though the potential Saudi crude oil supply disruptions lingered, 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. The Houthi threats on vessels sailing in the Red Sea near the Bab el-Mandeb Strait could once again bring disruptions to Saudi crude and base oil flows in the next few weeks.

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. However, the producer was also expected to start building inventories to cover contract commitments during a scheduled turnaround in October, so extra supplies may be limited in the next couple of months.

The market uncertainties kept some buyers on the sidelines as they awaited further developments. Seeing that Group II prices were moving down, those buyers who had sufficient stocks to run daily operations preferred to delay purchases for as long as possible.

With demand in Asia weakening and producer stocks growing, some suppliers sought export opportunities into markets such as the U.S. and Latin America, but climbing freight costs and logistical difficulties have dampened transactions. At the same time, some sellers also preferred to abstain from offering product, hoping that the absence of readily available cargoes would provide support to pricing.

In China, demand has slowed down and this has pushed a number of Chinese producers to offer Group II cargoes for export, as prices in other areas were more attractive. The offers of Chinese products were seen as competitive compared to those of other Northeast Asian suppliers, attracting keen buying interest in Chinese Group II cargoes in India and Southeast Asia.

The increased availability also precipitated the fall of domestic prices in China, as Group II base oils supplies grew while buying interest shrank. Buyers were postponing purchases in hopes of achieving even lower prices as they watched the downward movement of prices in countries outside of China, which were likely going to translate into reduced offer levels for imports. The heavy grades were partly insulated from this trend because they are typically in deficit within China.

In India, domestic suppliers have raised Group II prices because of steady buying interest against dwindling supplies as sellers have been able to export some cargoes to markets where values were higher. Uncertainties surrounding future Group I and Group II shipments from Saudi Arabia due to the disruptions to vessel traffic in the Red Sea also offered support to prices.

Despite the climbing domestic prices, buyers still preferred to secure locally produced material whenever possible to avoid logistical risks. A few blenders continued to utilize Group II base oils to replace Group III cuts in some applications, leading to increased buying interest in Group II cuts and offering additional support to prices.

A South Korean supplier who typically exports light grades to India has curtailed shipments this month as it was heard to be prioritizing gasoil production over that of base oils.

Group II import prices have inched up again this week, but the increases were more moderate than last week as crude oil and feedstock prices have softened and there were competitive offers of domestic grades, which exerted downward pressure on bids. Increases of $10-30 per  ton on a CFR India basis applied to most grades. A 10,000 to 12,000-ton cargo was quoted for shipment from Cartagena, Spain, to Mumbai and Hazira in mid-August—a slightly atypical movement as European prices have generally been hovering at steeper levels than Indian prices.

Group III

Continued disruption to vessel movements through the Strait of Hormuz, combined with reduced production at three major Persian Gulf producers, has significantly tightened global Group III base oil availability. Although Asian refiners and producers in other regions have been working to compensate for the loss of Middle Eastern Group III volumes, they have been unable to fully cover global demand, pushing prices to new record highs.

The global Group III supply situation could become even more constrained, as ship operators remain hesitant to transit the Strait of Hormuz and Bab el-Mandeb Strait until they can be confident that both ships and crews can pass safely. A number of vessels were reportedly targeted by Houthi militants over the last few weeks, adding to concerns over the reliability of supply routes.

Aside from the difficulties in 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 45-day turnaround starting in the second half of August. The producer was heard to have restricted spot offers as it was focusing on meeting term commitments during the outage, and it has also slightly curtailed allocations, according to sources.

In China, domestic Group III prices continued to edge up, reflecting rising international prices as global supplies remained very limited. Furthermore, Chinese suppliers have offered small Group III parcels for export to Southeast Asia as prices there were higher than in China, while traders were also seeking opportunities to export coal-to-liquids (CTL) material.

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 was expected to tighten supplies further. The 4 cSt grade was particularly snug as it is the most utilized cut, while the heavier grades were slightly more available in China.

In India, Group III import prices edged up by $10/ton on a CFR India basis again this week in line with steeper international prices given persistent global supply shortages and cargo movements to regions where prices were even steeper than in India.

The Group III producer that started output last year was trying to run its plant at top rates to take advantage of export opportunities given the supply gaps left by Middle Eastern Group III barrels. 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 this month. Group II grades were anticipated to be already available, according to sources.

Blenders in India were dealing with the issue of having to purchase Group III base oils at the loftier levels but were not confident of being able to offset the rising production costs through increases in lubricant pricing, as consumers typically resist increases. Base oil buying appetite was therefore slightly subdued.

Shipping

A number of fresh cargoes were discussed for shipment this week:

• A 15,000- ton cargo was mentioned for lifting in Yanbu, Saudi Arabia, to Mumbai, India, and Singapore in August, but confirmation was difficult to obtain given Houthi rebels’ threats on vessels loading at Red Sea ports.
• Between 10,000-12,000 tons were anticipated to load in Cartagena, Spain, to Mumbai and Hazira, India, in mid-August.
• A 3,000-ton lot was quoted for loading in Ulsan, South Korea, to Fujairah, United Arab Emirates, in August.
• A 5,000-ton lot was mentioned for shipment from Mumbai to the U.S. Gulf Coast in mid-August.
• A 4,000-ton cargo was discussed for shipment from Mumbai or Hazira to Rio de Janeiro, Brazil, in the first half of September.
• A 6,000-ton parcel was expected to be shipped from Rayong, Thailand, to West Coast India in mid-August.
• Approximately 7,000-8,000 tons were on the table for shipment from Tianjin, China, to West Coast India and Singapore in the first half of September.
• A 3,000-ton cargo was expected to be lifted in Mailiao, Taiwan, to Karachi, Pakistan, in late 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 7,000-ton lot was quoted for shipment from Yanbu to ARA-Hamburg between August 14-16.
• A 7,000-ton cargo was discussed for loading in Thailand to West Africa between August 20-30.

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  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 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 for damage assessments

s, 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

• 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.
• 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 Karamay will be starting a turnaround at its Group I/Group II and naphthenic base oils plant in Xinjiang, China, in August that will last two months.
• 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 started a scheduled turnaround at its Group I plant in Chiba, Japan, in mid-May that lasted 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 completed a one-month turnaround at its Group I plant in Cilacap, Indonesia, in April 2026.
• 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

• Formosa Petrochemical unexpectedly shut down its Group II base oils plant in Mailiao, Taiwan, in early July due to feedstock supply issues given technical problems at the affiliated refinery but restarted production the second week of July. Some shipments suffered small delays. Formosa has postponed a scheduled turnaround and catalyst change from the fourth quarter of 2025 to October 2026.
• Petronas was heard to have postponed a turnaround at its Group II/III Melaka plant in Malaysia from June to the second half of August 2026, with a restart expected at the end of September.
• PetroChina Karamay will be starting a turnaround at its Group I/Group II and naphthenic base oils plant in Xinjiang, China, in August that will last two months.
• 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.
• 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 scheduled a turnaround at its Taizhou, China, plant in the second 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 and was expected to complete a Group II/Group III expansion at Gujarat in the third quarter of 2026.

Group III

• Petronas was heard to have postponed a turnaround at its Group II/III Melaka plant in Malaysia from June to the second half of August 2026, with a restart expected at the end of September.
• SK-Pertamina (Patra SK) completed 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.
• 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 climbed in early trading on Monday on persistent uncertainties regarding the reopening of the Strait of Hormuz. Iran said an arrangement with Oman on alternative shipping lanes was imminent, but stated that reopening the crucial waterway would require further steps by the U.S.

• Brent September futures were trading at $84.22/bbl on Aug. 10, up from $83.32/bbl for front-month futures on Aug. 3 (ICE Futures Europe).
• Dubai crude futures (Platts) for September 2026 settled at $74.63/bbl on Aug. 7, down from $81.10/bbl for front-month futures on July 31 (CME).

Base Oils

Spot base oil prices in Asia were moving in opposite directions this week, with Group I indications either holding steady or moving up, and Group II spot trading remaining thin and prices edging down. Group III prices continued to increase 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 steady at $1,520/t-$1,560/t
Bright stock unchanged at $1,680-$1,720/t.

Group II
150N down by $20/t at $1,710/t-$1,750/t

500N was also lower by $20/t at $1,720/t-$1,760/t, all ex-tank Singapore.

FOB Asia

Group I
SN150 edged up by $10/t to $1,260/t-$1,300/t
SN500 assessed higher by $20/t at $1,280/t-$1,320/t
Bright stock prices moved higher by $20/t to $1,400/t-$1,440/t

Group II
150N assessments down by $30/t at $1,620/t-$1,660/t
500N also slipped by $30/t to $1,640/t-$1,680/t

Group III
4 cSt jumped by $100/t to $3,380/t-$3,430/t
6 cSt moved up by $100/t as well to $3,370/t-$3,420/t
8 cSt also assessed up by $100/t at $3,220/t-$3,260/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.