Weekly Asia Base Oil Price Report

The effective closure of the two crucial straits and the exposure of vessels to Houthi rebel strikes near the Red Sea have severely restricted the number of ship operators willing to sail near the conflict zone, while insurance premiums have skyrocketed. Vessels able to load at ports on the Red Sea were expected to take much longer to arrive at their destinations as they would have to be rerouted through the Suez Canal into the Mediterranean and then sail around the Cape of Good Hope in South Africa towards Asia. Meanwhile, depleted strategic oil stocks in several countries also raised concerns about damage to equipment and operations as levels reach tank bottoms.

Crude oil futures reacted to the failed diplomatic negotiations and Brent climbed over the weekend to levels near $88 per barrel, from around $84/bbl a week ago. Prices were expected to be buoyed by the ongoing supply crisis and failure by the U.S. and Iran to reach an agreement after almost six months of fighting.

Group I
Asian refiners were anxious about potential disruptions to Saudi crude oil supplies and surging transport and insurance costs. Since other Persian Gulf shipments remain blocked, several refiners have heavily relied on Saudi oil. In response to the tightening market, some base oil producers have stopped spot sales to hold onto their current inventories and guarantee they can fulfill existing contract obligations.

Significant amounts of Group I and Group II base oils move to Asia from Saudi Arabia but given that Iran-backed Houthi rebels have been blocking the Bab al-Mandab Strait and threatened to attack tankers in the Red Sea, these shipments have seen disruptions.

In contrast to Group II spot prices, Group I values have edged up given tightening supplies and fewer producers actively offering spot cargoes. According to sources, traditional sources in Thailand and Indonesia were abstaining from offering small spot cargoes and were focusing on contract commitments instead. A key Thai producer was heard to have suspended offers because of oil supply concerns. The Indonesian supplier that had offered some cargoes in July appeared to have suspended offers in August as its supplies were heard to be tight.

At the same time, consumers were hesitant to restock base oils when spot prices were trending up, despite growing concerns about immediate availability. Buyers preferred to rely on contract shipments and run blending plants hand-to-mouth utilizing existing stocks. Difficulties in implementing lubricant price increases along with squeezed margins and a seasonal slowdown in consumption also discouraged blenders from purchasing additional base oil cargoes at the higher prices that prevailed.

An increase in term and spot supplies from a key Southeast Asian refiner this month and spot offers emerging from China have partly assuaged concerns about regional base oil availability as well.

As has been the case over the last several weeks, steeper import prices and adequate domestic availability of most Group I cuts in China have led to reduced interest in imported products. Regional spot cargoes have also been less readily available, and this has driven prices up. With Thai and other producers’ spot offers off the market, Chinese buyers have sought domestic supplies mostly and have had to accept the current pricing, which has edged up.

Bright stock continued to command most attention within the Group I category because it is not widely available in China and a key producer had been off-line for maintenance. Importers were holding limited inventories due to price uncertainty as they did not want to run the risk of securing large volumes that may lose value later on.

In India, buying interest in imported Group I grades was fairly steady, but not robust, and import prices were holding as buyers resisted the higher offers observed over the previous weeks. However, prices were expected to experience some upward pressure because buyers were likely to return to the market to replenish stocks before the end of the monsoon season, which traditionally wraps up in September.

Group I prices were also firm due to the supply uncertainties of Saudi barrels as Group I and Group II base oil shipments in the Red Sea have seen disruptions in the shape of Houthi rebel attacks on vessels. Saudi Arabia is one of the main suppliers of Group I and Group II base oils to India. As a result, many blenders preferred to source domestic supplies to avoid logistical and pricing risks.

Group II
Group II prices were under pressure because of growing regional supply levels and more subdued demand. The same conditions as seen in the Group I sector regarding potential crude oil and base oil supply disruptions from Saudi Arabia were also impacting this segment. Several Asian refiners had been relying on Saudi crude to run their plants because of the Persian Gulf supply disruptions. South Korea is one of the countries that had increased crude imports from Saudi Aramco since the start of the Iran war.

An uptick in Group II spot offers from China was also exerting pressure on regional spot prices. Several Chinese refiners have been insulated from the crude oil supply crush that other Asian counterparts have been dealing with. China is still heavily importing Iranian crude oil. A Wall Street Journal report revealed that Hengli Group was the main importer of sanctioned Iranian crude oil. Hengli is one of the largest companies within a group of “teapot” refineries in China and also produces base oils at Hengli Petrochemical’s 540,000-metric-tons-per-year Group II and Group III plant in Dalian, according to Lubes’n’Greases Base Oils Plant Data.

A key Southeast Asian producer was also 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 the South Korean Group II suppliers have offered additional Group II cargoes over the last two weeks as supply has started to lengthen because of lackluster demand and high operating 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, but Houthi threats to Saudi crude and base oil flows in the Red Sea may disrupt or delay shipments in the next few weeks.

Taiwanese producer Formosa Petrochemical increased operating rates in July following an unexpected shutdown in late June due to feedstock supply issues at the affiliated refinery. 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.

In China, plentiful supplies of Group II light grades at competitive prices discouraged buyers from seeking imported products. Prices have come under pressure in China in line with Group II values in the wider Asian market. However, given that more buyers have turned to domestic supplies, local producers have started to adjust values up but kept prices competitive compared to imports. There were also expectations of a pickup in demand in September as this is a period of increased lubricant production activity, and this offered further support to current price ideas.

Some Chinese suppliers have also offered spot cargoes for export. These offers were considered competitive compared to those of other Northeast Asian suppliers, with buying interest emerging in India and Southeast Asia.

In India, import prices were largely steady, although the 70N edged up because of higher gasoil prices, while the other Group I cuts were largely unchanged from the previous week as buyers resisted current offers in view of regional prices moving down. Consumers did not mind delaying purchases in hopes of seeing lower pricing in the coming weeks. However, some suppliers preferred to move cargoes to countries that offered more attractive netbacks, and this may limit availability in India.

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 III
The Group III segment continued to feel the most impact from the disruptions in the Middle East, with global supply shortages pushing prices to fresh highs. Refiners in Asia and other regions were striving to fill the void left by Persian Gulf Group III volumes, but they have been unable to fully meet global requirements.

Ship operators remain on high alert as some try to schedule a crossing of the Strait of Hormuz or the Bab al-Mandab Strait, but ongoing Houthi militant attacks have significantly thwarted vessel movements in the area.

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 understood to be preparing for a 45-day turnaround starting in the second half of August. The producer may 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.

A South Korean producer was prioritizing Group III production versus that of Group II grades in order to meet contractual obligations and be able to offer limited amounts of Group III spot supplies.

In China, buying interest for Group III grades has flatlined because buyers were more cautious about acquiring too much stock at hefty prices, as they worried that these inventories may lose value once shipments from the Middle East are restored. Additionally, Group III grades from the local coal-to-liquids (CTL) plant were available without many of the logistical issues that other shipments were exposed to.

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 likely 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 and offers were often bundled with those of the heavier Group III cuts.

In India, blenders have faced some difficulties in implementing lubricant increases to offset rising production costs, as the Indian market is very price sensitive and consumers typically resist increases. Buyers have therefore become rather cautious in terms of volumes purchased and preferred to secure only those barrels needed for daily operations.

Group III import prices jumped by $50/ton on a CFR India basis this week in line with skyrocketing international prices because of the global supply shortages. Group III suppliers, including the domestic Group III producer, continued to ship product to locations where netbacks were higher than in India.

As mentioned previously, 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.

Shipping

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

• A 9,200-metric ton lot was expected to be shipped from Yeosu, South Korea, to Haiphong, Vietnam, in the first half of September.
• An 8,000-ton lot was also discussed for shipment from Yeosu to Ho Chi Minh, Vietnam, in 1H Sep.
• A 3,000-ton cargo was mentioned for shipment from Taiwan to Karachi, Pakistan, between Aug. 24-27.
• Approximately 5,000-7,000 tons were on the table for shipment from Tianjin, China, to West Coast India and Singapore between Sep. 5-10.
• A 1,850-ton cargo was on the table for shipment from Onsan, South Korea, to China in the 2H of Aug.
• A 2,000-ton lot was expected to load in Nantong, China, to Port Klang, Malaysia, at the end of Aug/early Sep.

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 brought 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 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 were higher in early trading on Monday because of the impasse between the U.S. and Iran and a lack of progress in negotiations to reopen the Strait of Hormuz.

• Brent September futures were trading at $88.70 per barrel on August 17, up from $84.22/bbl for front-month futures on Aug. 10 (ICE Futures Europe).
• Dubai crude futures (Platts) for September 2026 settled at $81.20/bbl on August 14, up from $74.63/bbl for front-month futures on Aug. 7 (CME).

Base Oils
Spot base oil prices in Asia were again mixed this week, with Group I indications either holding steady or moving up, Group II prices edging down and Group III prices increasing due to 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 edged up by $10 to $1,460/t-$1,500/t
SN500 also up by $10/t at $1,530/t-$1,570/t
Bright stock similarly moved up by $10/t to $1,690-$1,730/t.

Group II
150N down by $10/t at $1,700/t-$1,740/t
500N # also lower by $10/t at $1,710/t-$1,750/t

FOB Asia
Group I
SN150 edged up by $10/t to $1,270/t-$1,310/t
SN500 also assessed higher by $10/t at $1,290/t-$1,330/t
Bright stock prices jumped by $30/t to $1,430/t-$1,470/t

Group II
150N assessments were down by $30/t at $1,590/t-$1,630/t
500N also slipped by $30/t to $1,610/t-$1,650/t

Group III
4 cSt grade assessed higher by $50/t to $3,430/t-$3,480/t
6 cSt moved up by $50/t as well to $3,420/t-$3,470/t
8 cSt also assessed up by $50/t at $3,270/t-$3,310/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.