Weekly Asia Base Oil Price Report

The International Energy Agency and several other organizations and experts, including Chevron’s chairman and CEO Mike Wirth, have warned that crude oil supply will show a drop this year and prices will continue to rise given the prolonged standoff between the U.S. and Iran. Speaking at a University of Texas at Austin energy conference on Sept. 11, Wirth told the audience that the mechanisms that helped absorb the oil supply shock earlier in the conflict have largely been used up, and that prices are more likely to rise than fall over the next few months, a Yahoo! Finance article reported.

Crude oil futures rose during the week, but fell over the weekend as Middle East oil flows remained surprisingly strong despite the disruption to Saudi Arabia’s East-West pipeline, according to JP Morgan analysts. Traders also expected Saudi shipments to recover over the next few weeks. Brent futures were trading near $102 per barrel on Monday compared to levels above $107 last week, but remained volatile and exposed to geopolitical tensions.

Group I

Group I spot prices were steady-to-higher from last week as spot trading activity has almost ground to a halt because of crude supply uncertainties as Saudi Arabian oil shipments remained under threat of Houthi rebel attacks. Asian producers expressed concern about potential crude supply shortages and climbing oil and fuel prices. With gasoil/diesel prices continuing to move up, refinery economics might tilt towards the need to produce more diesel versus base oils. Most suppliers have suspended bulk spot offers until a clearer picture emerged. Their priority was to conserve inventories to continue meeting contractual commitments. While most term obligations have been met this month, there were concerns of potential reductions in the coming weeks.

At the same time, buyers preferred to wait as long as possible in hopes spot prices would come under downward pressure again once crude supply restrictions were lifted. Those who did venture into the spot market were only interested in acquiring small parcels to keep operations running.

Another factor that was partially dampening demand, particularly for bright stock, was the approach of the cooler fall and winter seasons, when demand for the heavy-viscosity grade tends to weaken in many Asian nations.

Firmer feedstock prices and tightening spot supplies have resulted in stable-to-higher offers for light grades in Southeast Asia. No specific offers were heard available from Thai or Indonesian suppliers, following at least one transaction involving Thai products concluded two weeks ago.

A key Southeast Asian producer was heard to have increased Group I base oil prices into a number of accounts, effective September 21.

In China, Group I domestic and rerefined base oil prices edged up because of revived buying interest ahead of the Mid-Autumn Festival and National Day holidays, which will likely slow trading between Sept. 25 and Oct. 7. Prices were propped up by reduced quantities of imports over the previous weeks, both because of supply constraints in the region and because of firm import prices, and received additional support from climbing feedstock costs.

An exception may be bright stock, which seemed to be plentiful and demand for this grade tends to decline during the fall/winter months. Several bright stock cargoes from Southeast Asia had been imported in the previous two months as well. The restart of Karamay Petrochemical’s plant in the second half of Sep. may bring more spot volumes to the market. Local producers were striving to reduce inventories and offered bright stock at significant discounts to imported material.

In India, domestic Group I prices were on the rise, driven by firm crude oil and feedstock costs and tightening availability as buyers have returned to the market to replenish stocks, following a period of lackluster demand during the monsoon season. Prospects of potential supply disruptions of Group I import shipments from Saudi Arabia as Saudi facilities and vessels came under intensified attacks by Houthi rebels over the weekend also supported prices.

Saudi officials stated that reported aerial threats and attacks toward the capital and infrastructure in Yanbu were intercepted or thwarted, without confirming any successful strikes or operational disruptions at the Aramco facilities there, the Japan News reported on Sept. 20. The previous week, when the East-West pipeline in Saudi Arabia had been attacked, Bloomberg reported that Saudi Aramco had notified at least two long-term contract European refinery customers that it would be unable to deliver any Saudi crude oil in October. Direct confirmation from the producer was not forthcoming.

Group I import prices were reported as mostly steady from the previous week in India, with the exception of the SN150, which was heard to have inched up by $10 per metric ton on a CFR India basis due to steeper feedstock costs and snug supplies.

Domestic suppliers were hoping to adjust base oil values on rising feedstock costs, but buyers may resist the adjustments as lubricant price increases were difficult to implement.

Group II

The downward pressure observed over the previous week on Group II prices appeared to have dissipated as crude oil supply uncertainties, climbing crude oil and feedstock values, and a withdrawal of bulk spot offers by a number of suppliers offered support to pricing. Spot prices were generally reported as steady-to-firm from the previous week.

Buyers did not seem concerned about the temporary halt in discussions because they have been able to receive most of the volumes they need under term agreements. They also expected spot availability to be ample once trading picked up again in the coming weeks.

A key Southeast Asian supplier has, in fact, increased its supply in September, from curtailed allocations in the previous three or four months. Asian producers had also been able to offer cargoes to destinations in the Americas — a sign that prices were more attractive in other regions, but also that supplies were deemed sufficient to meet most regional requirements in Asia.

The few spot offers that have been communicated by Asian suppliers reflected moderate increases from the previous week. Some buyers whose inventories have been drawn down seemed to be interested in acquiring these cargoes, particularly as there was concern of potential base oil production disruptions at Asian refineries following magnified crude oil supply and shipping turmoil in the Middle East. Refiners have been dealing with crude supply issues since the start of the Iran war, and while many have been able to source product from alternative origins, a larger supply crunch may again affect refinery run rates. Additionally, surging gasoil/diesel prices were also expected to impact refinery decisions as to how feedstocks would be utilized.

An upcoming turnaround at the sole Taiwanese producer’s Group II plant might exacerbate the tight supply conditions until the end of the year. The shutdown was expected to start in mid-October and be completed in early December.

In China, import prices for Group II grades inched up because of tightening regional spot supplies and a sudden uptick in buying appetite as consumers worried there may be less availability once they returned to activities following the Mid-Autumn and National Day holidays in October. Climbing import prices received additional support from higher domestic prices as well.

Chinese refiners had offered some Group II spot cargoes into India in the previous weeks and a few shipping inquiries had emerged, but these offers have not surfaced this week likely because prices in China were edging up and regional spot supplies have tightened.

Some Indian buyers were eager to replenish inventories as many had stayed away from the market during the monsoon months, but higher gasoil prices exerted upward pressure on import prices for the 70N grade, with values edging up by around $20-30/t on a CFR India basis. The 150N and 500N were largely unchanged from the previous week.

Domestic Group II heavy-viscosity supplies in India have fallen due to refinery yields, which result in higher volumes of the light grades, and because one producer was focusing on producing more Group III grades, which offered firmer netbacks given a global supply scarcity of Group III cuts.

Group II availability from Saudi Arabia may be restricted due to the current shipping disruptions and because of a 30-day shutdown at the Saudi plant in Yanbu that was expected to start on Oct. 1.

Group III

Given ongoing global Group III supply shortages and allocations from Asian Group III suppliers, Group III prices continued to receive support and actually inched up again this week. However, the increases were smaller compared to earlier in the supply crisis because buyers have grown increasingly resistant to the steeper indications.

Lubricant blenders worried that economic instability, combined with buyers’ limited cash flow and tighter credit, would hurt demand. They feared these financial strains would prevent them from passing surging base oil expenses further down the supply chain.

Iran continued to control passage in the Strait of Hormuz and a very limited number of vessels appeared to manage the crossing. As a result, Group III production in Abu Dhabi, Bahrain and Qatar remained shut down, keeping upward pressure on prices. Escalating turmoil surrounding crude oil shipments from Saudi Arabia and attacks on vessels in the Red Sea only added more tension to an already strained base oil supply situation.

Current and upcoming turnarounds in Asia and other regions were expected to exacerbate the product shortages. 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, although the 6 cSt and 8 cSt cuts seemed more plentiful, not only in Spain, but in other regions as well.

A Malaysian Group III producer was understood to have scheduled a 45-day turnaround at its plant in Malacca that started in the second half of August and was expected to be completed in early October, but no confirmation could be obtained from the producer directly.

In China, offers of imported Group III were very limited and prices hovered at steep levels. Buyers preferred to secure domestic supplies whenever possible, but some had no choice because of formula requirements.

The domestic coal-to-liquids producer has raised prices because of the tight availability, particularly of the 4 cSt cut. The producer was heard to have started a 25-day turnaround in early September and has therefore restricted spot sales, even though the shutdown was only partial, according to reports.

In India, the persistent global supply constraints drove Group III 4 cSt, 6 cSt and 8 cSt import prices up by $10-20/t on a CFR India basis. Some buyers had to accept these prices because of product specifications and because the key local producer had little extra product to offer. Those who were able to replace Group III base oils with Group II cuts did so because of the price advantage.

The Indian Group II/Group III producer was understood to be running its Group III production lines at top rates to take advantage of export opportunities given the supply gap left by Middle Eastern Group III base oils, with cargoes having moved to overseas destinations including the U.S., according to sources.

Shipping

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

• 5,000-ton cargo was discussed for shipment from Tianjin, China, to West Coast India, Sept. 20-25.
• 2,500 tons were expected to be shipped from Ulsan, South Korea, to India, Sept. 20-25 as well.
• 3,000-ton lot was mentioned for possible lifting in Ulsan to Colombo, Sri Lanka, first half October.
• 30,000-40,000 tons were discussed for shipment from Yeosu/Ulsan, South Korea, to West Coast India, Oct. 10-20.
• 6,000-ton lot was expected to load in Yeosu to Merak, Indonesia, first week October.
• 6,000-ton cargo was mentioned for lifting in Rayong, Thailand, to West Coast India for any September dates.
• 6,000-8,000 tons were quoted for shipment from Yanbu, Saudi Arabia, to West Coast India on any September dates or early October.
• 2,000-ton parcel was on the table for lifting in Pyeongtaek, South Korea, to Karachi, Pakistan, in September.
• 1,600-ton parcel was on the table for shipment from Yeosu to Yokohama, Japan, Sept. 29-Oct. 6.
• 2,000-ton cargo was expected to be shipped from Sriracha, Thailand, to Singapore Sept. 10-15.
• 4,000-ton cargo was discussed for lifting in South Korea to the U.S. Gulf in September.
• 5,000-6,000 tons were mentioned for possible loading in Daesan, South Korea, or Ningbo, China, to Rio de Janeiro, Brazil, in late September.
• A second parcel of 3,000-5,000 tons was also discussed for shipment from South Korea to Brazil in October.

Production

Persian Gulf 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 shutdown will only affect Group II production, according to sources. 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 started a turnaround at its Group I 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 postponed a scheduled turnaround and catalyst change from the fourth quarter of 2025 to mid-October 2026. The shutdown was expected to last until early December. The producer had 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.
• 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.
• 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 slipped on Monday on prospects of a recovery in Saudi Arabian exports, despite the current threat of Houthi attacks on Saudi territory, along with potential renewed diplomatic talks between the U.S. and Iran. U.S. president Donald Trump said that he would be interested in meeting Iranian president Masoud Pezeshkian during a United Nations assembly this week.

• Brent November futures were trading at $101.78 per barrel on September 21, down from $107.62/bbl for front-month futures on Sep. 14 (ICE Futures Europe).
• Dubai crude futures (Platts) for October 2026 settled at $99.08/bbl on Sep. 18, down from $100.20/bbl for front-month futures on Sep. 11 (CME).

Base Oils

Spot base oil prices in Asia were steady-to-firm this week, with Group I and Group II receiving support from a limited number of spot offers 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 higher by $10/t at $1,470/t-$1,510/t
SN500 holding at $1,510/t-$1,550/t
Bright stock also steady at $1,690-$1,730/t

Group II
150N assessed unchanged from a week ago at $1,650/t-$1,690/t
500N also steady at $1,660/t-$1,700/t

FOB Asia

Group I
SN150 assessed higher by $20/t at $1,280/t-$1,320/t
SN500 also up by $20/t at $1,300/t-$1,340/t
Bright stock prices unchanged at $1,460/t-$1,500/t

Group II
150N assessments holding at $1,530/t-$1,570/t
500N also steady at $1,560/t-$1,600/t

Group III
4 cSt grade moved up by $10/t to $3,630/t-$3,680/t
6 cSt also increased by $10/t to $3,620/t-$3,670/t
8 cSt assessed unchanged from the previous week at $3,460/t-$3,500/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.