Weekly Asia Base Oil Price Report

Shipping disruptions continued in the Middle East, with the Strait of Hormuz still under Iranian control. The United States and Iran exchanged some of their fiercest attacks in weeks, with the U.S. military reporting strikes on three Iranian “shadow network” oil tankers in retaliation for Iran launching missiles at two warships near Hormuz.

Crude oil futures reacted to the news and jumped in early Asian trade on Monday, with Brent hovering above $96 per barrel, substantially up from around $90/bbl a week ago. Record-high diesel prices may also incentivize refiners to stream more feedstocks into fuel production versus that of base oils, but for the time being, most suppliers were focusing on running base oil plants at high rates.

Group I
Group I spot prices were stable to lower as more supplies have reached the market in recent weeks, but buyers have recoiled on concerns that prices will continue to move down and they would get caught holding pricey stocks. Many consumers preferred to buy volumes needed to support daily lubricant production, but held off on larger commitments. There have been fresh offers from Southeast Asia, but they were mostly for the light-viscosity grade, which kept some upward pressure on the heavy grade and bright stock.

Indeed, the key Thai producer was heard to have offered flexibag volumes of SN150 at around $1,420/ton FCA Thailand for September lifting last week, while no SN500 and bright stock cargoes appeared to have been available. The producer had withheld spot offers in early August because of crude oil and feedstock supply concerns when Saudi crude cargoes were blocked by Houthi rebels from leaving the Red Sea. While supplies appeared to have been rerouted via the Suez Canal and more Saudi cargoes were expected to be shipped, uncertainties persisted. The Thai supplier was also understood to be prioritizing domestic contract accounts.

Similarly, there have not been fresh offers heard from Indonesia, with the key producer understood to give precedence to domestic customers and downstream lubricant production.

There have been reports of more plentiful spot availability from a key Southeast Asian refiner who had restricted supplies and implemented strict sales controls in the previous months, and the added volumes exerted pressure on prices.

Growing Group I supplies in China were also driving prices down, with the exception of bright stock, which continued to command firm prices because it was less readily available. Imported bright stock volumes were low and this buoyed values. Domestic suppliers have lowered prices of most Group I grades in order to compete with imports.

In India, base oil and lubricant demand was likely to pick up steam this month as the monsoon season was expected to be over in October and transportation and industrial activities increase. This would coincide with heightened run rates from domestic refiners, who are optimizing base oil output as margins were deemed more attractive than competing fuels.

There were expectations that Saudi Group I volumes will become available in the coming months as vessels will be rerouted to avoid the Bab al-Mandab Strait following Iran-backed Houthi rebel attacks on vessels loading at Red Sea ports and attempting to cross the maritime passage.

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 of an increased number of offers and domestic competition.

India was preparing for the BRICS Summit in New Delhi, with leaders of India, Russia, China and other countries expected to attend. The Indian government was trying to maintain a balance while holding ties with Moscow and Beijing without alienating Western partners at a crucial economic moment, with Indian businesses wary of developing too much reliance on China, Nikkei Asia reported. Indian refiners have been benefitting from discounted Russian crude oil imports following a waiver on Russian energy exports by the Trump administration.

Group II
Group II base oil prices continued to face downward pressure as production from Asian refiners steadily expands amid a slowing market, driven by near-term uncertainties in lubricant consumption and other economic challenges. This marks a shift from roughly two months ago when tight inventories and volatile feedstock supplies pushed prices to a peak. Cautious consumer behavior and changing market fundamentals are causing prices to flatten or decline, prompting most buyers to hold off on orders in anticipation of further discounts. The light-viscosity grades appeared to lose ground faster than the heavy grades because of more ample availability.

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. There have been some spot offers coming from the supplier in the last few weeks, but it could not be ascertained if fresh offers had emerged this week. The producer’s domestic list prices have remained unchanged in September, but it was heard that export prices had been lowered to compete with other Northeast Asian refiners.

South Korean offers have multiplied at lower prices as supply has started to lengthen because of lackluster demand and high operating rates in the region, but suppliers were not only interested in pursuing opportunities in Asia. Some cargoes have been offered to the U.S. and Latin America, with a couple of shipments having been finalized. However, high freight rates, long delivery times and difficulties in locating vessels to cover the long-distance routes have thwarted some of this business.

A South Korean producer was heard to have closed a tender on September 3, which included Group II and Group III grades for shipment next month.

There have also been increased discussions to move South Korean products to India, where demand is showing renewed signs of life after a couple of months of subdued conditions given the monsoon season. Import prices have inched up by $10-20/ton on a CFR India basis on firming crude oil and feedstock costs, but buyers were resisting the steeper figures and preferred to wait before jumping at the first offer they received. However, many blenders will likely have to enter discussions and replenish stocks as these have been depleted given subdued buying activity in the previous two or three months.

Expectations of improved availability of Group I and Group II grades from Saudi Arabia, with the Saudi supplier rerouting its shipments via the Suez Canal and around South Africa following Houthi rebel attacks in the Bab al-Mandab Strait and the Red Sea, exerted some downward pressure on the pricing of cargoes scheduled for October or November arrival.

In China, domestic producers have increased Group II domestic prices due to the climbing feedstock costs. Prices were supported by expectations of reduced volumes of imported Group II base oils and a potential pick-up in demand as many buyers have depleted stocks and have delayed purchases for as long as possible.

Export prices have also moved up and this has turned Chinese Group II base oils less attractive within the Asian market, where they had been gaining some attention in the previous weeks as prices had been competitive. An increased number of offers and softer prices from South Korea and Southeast Asia also dampened opportunities for Chinese cargoes.

Group III
Critical global supply shortages due to the Iranian chokehold on the Strait of Hormuz and the forced shutdown of Group III production in Abu Dhabi, Bahrain and Qatar continued to pressure prices up, with no relief in sight as long as the Middle East conflict remained unresolved.

To make matters worse, unplanned outages in Europe and current and upcoming turnarounds in other regions were expected to curtail supplies even further. The joint venture production site operated by Repsol/SK Enmove in Spain has shut down 4 cSt production and supplies were not expected to recover until November.

A Malaysian Group III producer was understood to have scheduled a 45-day turnaround that started 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.

In China, prices for Group III cuts have increased because of supply reductions from the domestic supplier of coal-to-liquids (CTL) base oils. The CTL producer was heard to have started a turnaround in September and has therefore restricted spot sales, according to reports.

Asian Group III suppliers were eyeing markets where netbacks were more attractive, reducing supply options for Chinese buyers. Chinese buyers were resisting the higher offers of imported products in any case, because of uncertainties related to being able to recover the high costs from lubricant sales.

In India, Group III 4 cSt and 6 cSt import prices surged by $50/ton on a CFR India basis reflecting international prices propelled by the ongoing supply shortages. The Group III 8 cSt grade saw more moderate increases of around $20/t. Buying interest was cautious as blenders were not sure that they would be able to recoup costs by increasing lubricant prices, a similar plight to the one Chinese blenders were facing. Some have resorted to switching to Group II base oils whenever formulations allowed.

The key Indian Group II/Group III producer was trying to run its Group III production lines at top rates to take advantage of export opportunities given the supply vacuum left by Middle Eastern Group III base oils, with cargoes moving to overseas destinations including the U.S., according to sources.

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

• Approx. 25,000 tons discussed for shipment from Yeosu, South Korea, to West Coast India, September 10-20.
• 10,000 tons quoted for shipment from West Coast India to West Africa, Sep. 2-5
• 2,000-ton lot mentioned for shipment from Pyongtaek, South Korea, to Karachi, Pakistan, Aug. 27-Sep. 10
• 4,000-ton cargo expected to be shipped from Mundra, India, to Singapore, end Aug./early Sep.
• 2,000-3,000 tons quoted for shipment from Straits to Nantong, China, Aug. 17-Sep.10.
• 2,000-ton cargo on the table for shipment from Rayong, Thailand, to Nantong, China, Sep.1-5.
• 6,000-ton lot mentioned for possible shipment from Rayong, Thailand, to India, Sep. 10-16.
• 3,000-4,000-ton parcel quoted for shipment from Port Klang and Malacca, Malaysia, to Genoa, Italy, Sep. 10-20.
• 2,000-ton cargo mentioned for possible shipment from North China to Malaysia, Aug. 27-Sep. 10.
• 2,500-ton lot also discussed for shipment from Kandla, India to Kuantan, Malaysia, Aug. 27-Sep. 10.
• 5,000-ton cargo on the table for shipment from Tianjin, China, to Mumbai Sep. 20-25.
• 6,000-8,000 tons discussed for shipment from East Coast India to U.S. Gulf Coast or U.S. East Coast, end Aug/Sep.
• 4,000-ton cargo mentioned for shipment from Taiwan to Port Klang, 1st week 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 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- 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 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 started 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 completed a turnaround in May 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 was expected to start 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 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, from early May to 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 edged up on Monday following news of an Iranian missile attack on two U.S. Navy ships and the U.S. firing retaliatory strikes on three Iranian “shadow fleet” tankers over the weekend.

• Brent November futures were trading at $96.70 per barrel on September 7, up from $90.47/bbl for front-month futures on Aug. 31 (ICE Futures Europe).
• Dubai crude futures (Platts) for October 2026 settled at $89.92/bbl on Sep. 2, up from $86.96/bbl for front-month futures on Aug. 28 (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 the exception of bright stock) 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 holding at $1,460/t-$1,500/t
SN500 assessed lower by $20/t at $1,510/t-$1,550/t
Bright stock was holding at $1,690-$1,730/t.

Group II
150N assessed down by $10/t at $1,670/t-$1,710/t
500N down by $10/t at $1,680/t-$1,720/t

FOB Asia
Group I
SN150 steady at $1,260/t-$1,300/t
SN500 also unchanged at $1,280/t-$1,320/t
Bright stock prices slightly higher by $10/t at $1,460/t-$1,500/t

Group II
150N assessments down by $20/t at $1,550/t-$1,590/t
500N holding at $1,580/t-$1,620/t

Group III
4 cSt grade moved up by $50/t to $3,600/t-$3,650/t
6 cSt also increased by $50/t to $3,590/t-$3,640/t
8 cSt assessed up by $50/t as well at $3,440/t-$3,480/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.