Weekly Asia Base Oil Price Report

Crude oil futures strengthened over the week following the failed U.S.-Iran negotiations but fell on Monday as investors waited for U.S. Treasury Secretary Scott Bessent to unveil the new package of sanctions against Iran, while international organizations have adjusted their forecasts to reflect lower global crude demand in the coming months. Brent futures slipped to near $93 per barrel in early trading on Monday, after trading above $94/bbl the previous Friday.

Group I
Group I prices were generally stable to slightly higher, supported by a reduced number of spot offers and prospects of constrained supplies if shipment disruptions of Saudi Arabia’s crude oil and base oils continue, as vessels have come under attack by Iran-backed Houthi rebels near the Bab al-Mandab Strait in the Red Sea. Twelve Saudi-flagged vessels were reported to have been rerouted via the Cape of Good Hope, which adds to the transit time and freight costs of the shipments. Additionally, two ADNOC-affiliated vessels were struck by drones while transiting the Strait of Hormuz. This was the second ADNOC-linked incident in under a week, Windward AI.com reported.

Several Asian refiners had withdrawn their base oil spot offers when disruptions to Saudi crude oil supplies started, because many producers depend on Middle East crude oil to run their refineries and they preferred to preserve existing stocks to meet contractual obligations. Substantial volumes of Group I and Group II base oils move to Asia from Saudi Arabia as well, 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 were expected to be reduced or face longer delivery times.

According to sources, fresh offers of Group I heavy grade and bright stock emerged from Thailand during the week. Producers in Thailand and Indonesia had abstained from offering small spot cargoes in the previous weeks to focus on contract commitments given uncertainties in terms of oil supplies. The Thai producer had been particularly concerned about being able to obtain Middle East crude oil, but it appeared that the situation may have been temporarily resolved as Saudi cargoes have been rerouted to avoid the contended Bab al-Mandab strait.  

The Thai producer was heard to have offered flexibag volumes of SN500 at $1,400 per metric ton FCA Thailand, and bright stock at $1,600/t FCA Thailand. These prices reflect a decrease from the previous offers that the producer had brought forward in July.

The Indonesian supplier that had offered some cargoes last month appeared to have suspended offers in August as its supplies were heard to be tight and it was prioritizing contractual obligations.

The fresh offers may face lackluster buying appetite as demand in general tends to slow in the second half of the year, and many buyers were still holding inventories acquired when prices were substantially higher. These consumers preferred to wait for additional offers to come to the market, hoping that as more product becomes available, prices would come under pressure.

An increase in term and spot supplies from a key Southeast Asian refiner this month and spot offers emerging from China also seemed to point to improved availability.

Chinese plants were running well and a key producer has restarted its facilities following a turnaround, allowing for additional base oils to enter the supply system. The perception of plentiful supplies has kept some buyers on the sidelines as they waited for a possible drop in domestic prices given the growing inventories. However, for the time being, suppliers were keeping prices steady.

Buying appetite for imports remained subdued, with the exception perhaps of bright stock, which elicited more interest because it is typically short within China. The availability of fresh Thai spot offers appeared to signal that additional Group I cargoes may become available from Southeast Asian suppliers over the next few weeks, and this might exert downward pressure on pricing. Chinese buyers have therefore adopted a wait-and-see attitude and delayed purchases for as long as possible.

In India, Group I import prices were steady-to-lower because of increased regional availability and competition with domestic supplies. Group I SN150 and SN500 cuts were steady to slightly lower, slipping by $10/t on a CFR India basis, but bright stock was firm because of more limited availability.

Domestic producers have been striving to maintain or increase market share and have offered discounts and competitive prices compared to imports, and this strategy seems to have worked as buying appetite for imports has softened. Demand in India remained somewhat subdued due to the monsoon season, but activity was expected to pick up in September.

Group I prices also received support from supply uncertainties related to Saudi barrels as Group I and Group II base oil shipments in the Red Sea have been threatened by Houthi attacks. Saudi Arabia is one of the main suppliers of Group I and Group II base oils to India. There were also question marks as to the availability of Iranian base oils, as the U.S. and the United Arab Emirates have vowed to choke Iranian trading activity. Many blenders preferred to secure domestic supplies to avoid logistical and pricing risks.

Local producers have also had some advantages in terms of crude oil imports, as they have been able to import discounted Russian crude oil. According to an article in the Financial Times, India’s reliance on Russian oil hit an all-time high as the ongoing U.S.-Iran conflict has squeezed Middle East crude supplies. In the month of June and July, India imported more than 2.6 million barrels of Russian oil per day, compared to a low of 1 million bbl/day in February. India had reduced Russian oil imports after the U.S. had imposed sanctions on Russian exports, but president Trump had granted waivers to allow purchases of Russian oil in order to mitigate the impact of the Iran conflict on crude prices.

Group II
Growing supply levels and fizzling demand were exerting downward pressure on Group II price indications. Base oil consumption typically moderates in the second half of the year, and uncertainties in downstream lubricant markets seemed to deepen blenders’ reluctance to secure much product beyond those volumes needed for daily operations.

“The market is weak as no one knows how long the current situation will last,” a source explained.After being on an upward trek since March, Group II prices have lost territory over the last four weeks and there were expectations that they would remain under downward pressure given wavering market dynamics.

Participants reported increased spot volumes being offered by Northeast Asian and Southeast Asian producers, and this exerted pressure on pricing as competition among suppliers grew.

A key Southeast Asian producer was reported to have lifted its strict allocations from the previous months and was expected to bring additional supplies to the spot market.

The sole Taiwanese Group II producer increased its 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, with extra supplies likely to be more limited over the next couple of months. For the time being, there were still spot offers from the supplier, and while its domestic list prices have remained unchanged for the last several months — likely because of its planned turnaround — it appears that the supplier lowered export prices in order to compete with other Northeast Asian refiners.

South Korean Group II suppliers have also brought additional Group II cargoes into the market at lower prices as supply has started to lengthen because of lackluster demand and high operating rates. South Korea had increased crude imports from Saudi Arabia and other origins 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.

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 noted in India and Southeast Asia.

Falling regional prices and the vast availability of Group II volumes within the domestic supply system in China has started to exert downward pressure on local supplies. Producers were offering discounts to lower inventories, and many buyers preferred to secure domestic supplies rather than deal with logistical and price risks associated with imported barrels. Given the current uncertainties, importers have been hesitant to secure September volumes without receiving assurances that buyers will be taking fresh cargoes, and preferred to delay purchases in hopes that prices would continue on a downward slope.

In India, Group II import prices were under downward pressure, reflecting the regional trend. Given the healthy margins of base oils against competing fuel values, buyers felt that prices had room to move down as demand has been lackluster and Asian supply levels have grown. They therefore preferred to delay purchases and use up existing stocks. Uncertainties regarding lubricant demand in the coming weeks, after the end of the monsoon season, also made blenders hesitate about acquiring too much base oil at the current price levels.

Group III
Global supplies of Group III base oils remained severely constrained, and the situation may worsen before it gets better as Spanish producer Repsol has experienced some unplanned production issues that were expected to reduce its availability of 4 cSt. While these supplies are not typically for the Asian market, European product shortages in the coming weeks meant that there might be increased buying interest in Group III supplies from alternative origins, including Asia.

According to sources, Repsol has encountered production issues with its 4 cSt grade, with operations in Spain having reportedly been affected by extreme summer temperatures in the last few weeks. Last week, Repsol informed customers about upcoming production issues affecting Yubase 4 availability from the company’s refinery during August, September and October. The refinery will ostensibly undergo a scheduled shutdown, and the limited remaining stock will be reserved exclusively for Repsol Lubricants. As a result, the company will only be able to supply Yubase 2, Yubase 3 and Yubase 6 during this period. Yubase 4 availability was expected to be restored in November, subject to the successful restart of refinery operations. Repsol produces Group III in Spain through Iberian Lube Base Oils Co., a joint venture with South Korea’s SK Enmove at the Cartagena Refinery in Murcia. But the reduced availability was not expected to impact SK Enmove’s term customers, including those in Asia. An official confirmation from the producer was not available by the publishing deadline.

Additionally, a Malaysian Group III producer was understood to have scheduled 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.

With commercial vessels having been attacked in the Strait of Hormuz and the Bab al-Mandab Strait by Houthi militants and Iran, and base oil production in Bahrain, Qatar and Abu Dhabi shut down until vessel traffic through Hormuz can resume safely, availability from the Persian Gulf will remain effectively cut off. This takes a significant portion of Group III supply off the market as the region accounts for approximately 20% to 25% (or nearly a third according to some assessments) of total global Group III base oil production capacity.

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.

In China, Group III cuts remained tight because domestic production is not sufficient to meet all requirements, and global availability has plummeted, keeping prices at historic highs. 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. Group III grades from the local coal-to-liquids plant were widely available without the logistical issues of import shipments.

In India, Group III import prices increased by $50/ton on a CFR India basis this week in line with escalating international prices because of the global supply shortages. While demand for Group III grades in India has softened given the steep prices and market uncertainties, the domestic Group III producer has been able to take advantage of the current market situation and export several cargoes at attractive prices, despite the lack of approvals for certain applications.

As mentioned previously, the key Indian 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. The producer 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 base oil cargoes were discussed during the week:

•           5,000 tons on the table for shipment from Tianjin, China, to West Coast India, Sept. 10-15.

•           2,000 tons expected to load in Nantong, China, to Port Klang, Malaysia, end August/early September.

•           4,000 tons quoted for shipment from Taiwan to Port Klang, H1 September.

•           6,000 tons likely to be shipped from Rayong, Thailand, to Mumbai, Sept. 6-10.

•           9,200 tons mentioned for shipment from Yeosu, South Korea, to Haiphong, Vietnam, H1 September.

•           8,000 tons also discussed for shipment from Yeosu to Ho Chi Minh, Vietnam, H1 September.

•          5,000-7,000 tons on the table for shipment from Tianjin, China, to West Coast India and Singapore, Sep. 5-10.

Production

Middle East plants
Qatar Energy halted production of liquid natural gas 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 stocks. 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-t/y 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

• 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 t/y 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 with 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 slipped on Monday as investors took profits ahead of a major U.S. announcement about an economic campaign targeting Iran and its trading partners, while Iran continued to block vessel traffic in the Strait of Hormuz.

• Brent October futures were trading at $92.79 per barrel on August 24, up from $88.70/bbl for front-month futures on Aug. 17 (ICE Futures Europe).
• Dubai crude futures (Platts) for September 2026 settled at $89.15/bbl on August 21, up from $81.20/bbl for front-month futures on Aug. 14 (CME).

Base Oils
Spot base oil prices in Asia were again mixed this week, with Group I indications assessed steady-to-firm, 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 were hardly any spot volumes 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 steady at $1,460/t-$1,500/t
SN500 unchanged from the previous week at $1,530/t-$1,570/t
Bright stock #holding at $1,690-$1,730/t.

Group II
150N assessed down by $20 at $1,680/t-$1,720/t
500N also lower by $20/t at $1,690/t-$1,730/t

FOB Asia
Group I
SN150 assessed higher by $10/t at $1,280/t-$1,320/t
SN500 holding at $1,290/t-$1,330/t
Bright stock prices firm at $1,430/t-$1,470/t

Group II
150N assessments down by $10/t at $1,580/t-$1,620/t
500N slipped by $20/t to $1,590/t-$1,630/t

Group III
4 cSt moved up by $50/t to $3,480/t-$3,530/t
6 cSt rose by $50/t to $3,470/t-$3,520/t
8 cSt also assessed up by $50/t at $3,320/t-$3,360/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.