Weekly Asia Base Oil Price Report

The Middle East conflict remained largely unresolved and for the first time in a month, the United States and Iran exchanged attacks, with U.S. forces hitting two Iranian rocket launchers that were attempting to deploy mines in Hormuz, and Iran retaliating with missiles aimed at military installations in Jordan on Sunday.

The renewed hostilities sent crude oil futures to higher levels, with Brent and West Texas Intermediate futures gaining more than 2% overnight and highlighting the fact that with only five tankers able to cross the strait per day, global crude supplies remained extremely constrained.

Group I

Group I prices have started to bow under the pressure of growing supplies and timid buying interest. With hazy prospects plaguing downstream segments, base oil buyers have adopted a cautious attitude and most players were only buying small volumes to keep operations running, while also utilizing existing stocks.

At the same time, producers have been cautious about offering spot cargoes because uncertainties regarding crude oil supplies persist, and most refiners preferred to protect their inventories to meet contractual obligations in case of worsening crude oil supply disruptions. A number of Asian refiners had already suspended their base oil spot offers when shipment issues affecting Saudi crude oil supplies started in early August, because many of them depend on Middle East crude oil to run their refineries.

The Thai producer was heard to have offered a Group I SN150 cargo for loading in the second half of September under a tender arrangement, which closed on August 27. It was not clear whether the producer had awarded the cargo, but this week, the supplier was understood to have offered flexibag volumes of SN150 at $1,420/ton FCA Thailand for September lifting. Unlike earlier in the month, when the producer had offered SN500 and bright stock cargoes, this week, its offer was limited to SN150.

There have also been reports of increased spot availability from a key Southeast Asian refiner who had restricted supplies and implemented strict sales controls in the previous months.

Any fresh offers might struggle to find takers because buying usually slows down in the second half of the year and many buyers are still holding pricey stocks. These buyers are pausing purchases until more supply enters the market, anticipating that increased availability might drive prices down.

One exception might be bright stock, which remained in tight supply given Group I plant rationalizations in recent years, while demand for this grade has not shrunk. New production of an extra heavy-viscosity Group II grade at ExxonMobil’s plant in Singapore has not been sufficient to meet all outstanding requirements in the region.

China has a chronic deficit of bright stock while demand continues to be robust. As a result, bright stock seems to weather downward price pressure better than other Group I cuts. However, given current market conditions and uncertainties in terms of future demand, bright stock prices have come under pressure in China, as have other Group I cuts because of plentiful domestic availability and prospects of increased supplies from traditional origins such as Southeast Asia. Domestic suppliers have lowered prices in order to compete with imports.

A similar situation has emerged in India, where local suppliers have lowered Group I prices so as to be competitive against imports. While imported Group I prices had remained firm in the previous weeks, they have come under pressure on growing supplies and competition with domestic suppliers, including that of bright stock. Imported Group I SN150 and SN500 cuts and bright stock have slipped by around $10 per metric ton on a CFR India basis compared to the previous week because buyers have adjusted bids down. At the same time, Group I supplies from the Middle East have seen upward pressure due to supply uncertainties amid ongoing geopolitical strife.

Base oil and lubricant demand was anticipated to pick up the pace in September as the monsoon season comes to an end in India and transportation and industrial activities increase. Depending on whether an uptick materializes, and whether Saudi Group I cargoes can be shipped in the coming weeks, prices could see some renewed support. Given that Iran-backed Houthi rebels have been blocking the Bab al-Mandab Strait and threatened to attack tankers in the Red Sea, shipments leaving Saudi ports were expected to be reduced or face longer voyages if they have to be rerouted to avoid the Bab al-Mandab Strait.

In terms of crude oil supplies, India has increased its purchases of discounted Russian crude oil in recent months, and refiners have also been incentivized to produce base oils versus competing fuels due to healthy margins.

Group II

A steady rise in supply levels from Asian producers against a backdrop of slowing demand due to uncertainties affecting lubricant consumption over the next few months continued to exert downward pressure on Group II prices. Values seemed to have reached a peak about five weeks ago, when supplies were scarce and refiners were still dealing with feedstock supply uncertainties, and prices are now gradually stabilizing or weakening because of current fundamentals and hesitation on the part of consumers. A majority of buyers preferred to delay purchases in hopes that prices continue to lose ground in the coming weeks.

Competition among suppliers intensified as more Northeast Asian and Southeast Asian producers have offered cargoes. 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 as well. South Korean suppliers have offered fresh cargoes to India, following an interstice because of subdued demand due to uncertainties related to the war in Iran and the onset of the monsoon season. Offers from South Korean suppliers were also heard to have gained acceptance in Latin America and the U.S., where Group II grades remained tight.

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.

As mentioned in the previous week, the sole Taiwanese Group II producer was 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.

Nevertheless, the Taiwanese Group II cuts were heard to be priced at steeper levels than domestic Chinese products. A Chinese producer has marginally increased domestic prices as feedstock values have moved up and there were prospects of demand picking up over the next few weeks as buyers prepare inventories for lubricant production in the latter part of the year. But local producers were still offering special discounts to incentivize buyers to purchase domestic supplies rather than imported base oils. This move was exerting downward pressure on import indications, as importers sought to narrow the gap between domestic prices and import prices. There was ongoing hesitation on the part of importers as there was no clear signal that buying interest would be increasing in September.

In India, Group II import prices edged up, bucking the trend seen in the rest of Asia because of tighter domestic supplies from one producer, who was heard to be maximizing Group III production given steep international prices and utilizing its more limited Group II production to feed its downstream operations.

Import volumes have also seen a reduction in India due to shipment disruptions in Saudi Arabia and because Asian producers have shipped products to other regions such as the Americas were netbacks were higher. Imports of Group II 150N and 500N were heard to have inched up by approximately $10/ton on a CFR India basis from the previous week. Demand was still not robust as the monsoon season has not ended, but was expected to pick up in September.

Group III

Global supplies of Group III base oils were still critically tight, driving prices to new highs. A further tightening of the Group III 4 cSt grade was expected in Europe as Spanish producers Repsol/SK Enmove have experienced some unplanned production issues at their joint-venture plant in Spain that affected the 4 cSt line. The problem was heard to be related to filtration issues and high summer temperatures during the previous weeks. While these supplies are not typically for the Asian market, European product shortages exacerbate the global supply picture.

Repsol informed customers that the refinery would be undergoing a scheduled shutdown, and the limited remaining stock of the 4 cSt grade would be reserved exclusively for Repsol Lubricants. Availability of the 4 cSt cut was expected to be restored in November, subject to the successful restart of refinery operations.

Additionally, a Malaysian Group III producer was understood to have scheduled a 45-day turnaround that was supposed to start 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, but no updates could be obtained from the producer directly.

With transits in the Strait of Hormuz and Bab al-Mandab Strait extremely restricted 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 unavailable, taking approximately 20% to 25% of total global Group III base oil production capacity out of the market.

In China, prices for Group III cuts remained exposed to upward pressure, despite the fact that the country has a domestic supplier of coal-to-liquids base oils and availability from this producer was not subject to logistical or transportation issues. However, the CTL producer has planned a turnaround in September and has therefore restricted spot sales. Additionally, Group III suppliers have directed some spot sales to markets were netbacks were more attractive, reducing supply option for Chinese buyers. 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 4 cSt and 6 cSt import prices jumped by $50/ton on a CFR India basis in line with escalating international prices because of the global supply shortages. The Group III 8 cSt grade saw more moderate increases in the realm of $20/t. Spot demand was not robust because blenders foresaw difficulties in transfering the higher production costs down the supply chain and preferred to rely on term supplies.

As mentioned above, the key Indian Group II/Group III producer that started output last year was trying to run its Group III plant at top rates to take advantage of export opportunities given the supply gaps left by Middle Eastern Group III barrels.

Shipping

A number of base oil cargoes were discussed during the week:

• A 5,000-ton cargo was on the table for shipment from Tianjin, China, to Mumbai, India, between September 20-25.
• A 6,000-ton lot was mentioned for possible shipment from Rayong, Thailand, to India between Sep. 10-16.
• A 4,000-ton cargo was quoted for shipment from Taiwan to Port Klang in the first week of Sep.
• A 9,200-metric ton lot was mentioned for shipment 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.
• Approximately 5,000 tons were on the table for shipment from Tianjin, China, to West Coast India between Sep. 10-15.
• A 2,000-ton cargo was quoted for shipment from Rayong, Thailand, to Nantong, China, between Aug. 30 and Sep. 3.
• Approximately 20,000 tons were looking to be shipped from Yeosu to West Coast India between Sep. 10-20.
• An 800-ton parcel was mentioned for lifting in Onsan, South Korea, for Taiwan on Sep. 3
• A 1,000-ton lot was discussed for shipment from Onsan to Zhangjiagang, China, between Sep. 3-4.

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 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-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

• 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 jumped following U.S. strikes on Iran’s Larak Island, while Iran retaliated by launching attacks on U.S. military bases in the region. The ongoing stalemate keeps the downside in oil prices limited, but futures remain highly reactive to any news that may point to a resolution of the conflict.

• Brent November futures were trading at $90.47 per barrel on August 31, down from $92.79/bbl for front-month futures on Aug. 24 (ICE Futures Europe).
• Dubai crude futures (Platts) for September 2026 settled at $86.96/bbl on August 28, down from $89.15/bbl for front-month futures on Aug. 21 (CME).

Base Oils

Spot base oil prices in Asia were again mixed this week, with Group I and Group II prices either steady or slightly lower (with bright stock being an exception), 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
SN150 was holding at $1,460/t-$1,500/t
SN500 was also unchanged from the previous week at $1,530/t-$1,570/t
Bright stock was firm at $1,690-$1,730/t.

Group II
150N was stable at $1,680/t-$1,720/t
500N was also steady at $1,690/t-$1,730/t, all ex-tank Singapore.

FOB Asia

Group I
SN150 was lower by $20/t at $1,260/t-$1,300/t
SN500 slipped by $10/t to $1,280/t-$1,320/t
Bright stock prices edged up by $20/t to $1,450/t-$1,490/t

Group II
150N assessments were down by $10/t at $1,570/t-$1,610/t
500N also slipped by $10/t to $1,580/t-$1,620/t

Group III
4 cSt moved up by $70/t to $3,550/t-$3,600/t
6 cSt rose by $70/t to $3,540/t-$3,590/t
8 cSt also assessed up by $70/t at $3,390/t-$3,430/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.