Weekly Asia Base Oil Price Report

Activity in the base oils segment remained subdued in the previous weeks, as geopolitical tensions in the Middle East had triggered crude fluctuations and uncertainties about potential shipping disruptions in the region. However, with the ceasefire holding for now, those players who needed to replenish stocks returned to trading. Many preferred to rely solely on term volumes and watch spot activity from the sidelines, as seasonal factors have also depressed demand in many areas.

Group I

The API Group I segment continued to be the tightest of all, with demand described as steady and spot supplies shrinking on account of permanent refinery closures in recent years, along with planned turnarounds. For instance, an upcoming turnaround in Thailand was not only limiting spot availability from the affected producer, but also from a second Thai supplier as it was trying to meet domestic demand and cover term commitments. The producer, whose plant had completed a turnaround earlier in the year, was heard to have no Group I spot availability to offer as it was by and large oversold on term supplies. The Thai refiner that has scheduled a 45-day turnaround in July-August suspended offers ahead of the shutdown as well.

Recent and current turnarounds in Japan and the Middle East also exacerbated the Group I supply situation. At the same time, it was heard that an Indonesian supplier would be offering Group I flexitank cargoes through two different tenders early this month, with bright stock and light grades making up the available volumes. According to sources, the bright stock parcel closed at $1,335 per metric ton ex-works Jakarta last week – reflecting a $10/t increase from the previous tender, but perhaps slightly below anticipated levels – and the tender for the SN130 lot was expected to close on July 7.

Although bright stock was still commanding most attention in the Group I category, and prices had been on a steady climb in recent months, it appears that the upward momentum has stalled on buyers’ resistance to steeper numbers.

In China, reduced manufacturing output and shrinking exports given China’s ongoing trade war with the U.S. have resulted in more subdued demand from the industrial segment, as well as from the marine transportation sector. Buyers appeared less anxious to acquire import cargoes as added Group I capacity will be brought on stream in Asia this month following an expansion at PetroChina’s Fushun plant, and later in the year, ExxonMobil was expected to bring additional heavy-viscosity Group II capacity on stream in Singapore. However, with Southeast Asian offers more limited this week given plant outages and pent-up demand, there were fewer options to choose from in terms of imports.

Price competition among domestic suppliers given adequate availability of Group II grades, which are often used to replace Group I cuts, partially dampened the need for additional Group I imports, although bright stock remains a difficult grade to replace.

In India, Group I import prices have inched up because of reduced regional availability, particularly from the Middle East, with CFR India indications reportedly increasing by $10-15/t week on week for all grades. While the conflict between Israel and Iran has come to a halt, uncertainties about Group I production in Iran persisted.

Domestic Indian suppliers have also increased their pricing on higher feedstock costs during the previous weeks amid snug supply.

The marine segment in Asia had seen a slowdown on expectations that the conflict in the Middle East would disrupt vessel movements. The tariff war between the U.S. and China had also led to decreased shipping activity. However, there appeared to be an uptick in interest to secure vessel space as some participants were front-loading material ahead of the end of the U.S. tariff suspension period on August 1 (delayed from an original date of July 9).

Group II

Spot prices for the Group II light grade edged up further this week as South Korean suppliers have increased their offer levels given more limited supplies against steady buying interest. Last week, the sole Taiwanese producer was also heard to have temporarily suspended spot offers for export, as well as for the light grade within the domestic market due to strained availability. It could not be ascertained whether the Taiwanese supplier had resumed spot offers this week.

Recent and ongoing turnarounds and reduced output levels were heard to have diminished availability of Group II base oils in the region, particularly of the 150N cut. This has driven South Korean refiners to increase fresh offers, with the light grade 150N seeing the steepest hikes. While a South Korean supplier withdrew spot offers of the Group II 150N last week and was heard to be hesitant about offering any cargoes this week, a second South Korean producer has requested 150N to co-load with 500N barrels. Some of the South Korean cargoes were expected to be moving to India.

In China, domestic suppliers reduced prices to entice buyers and lower their inventories, dampening interest for imports. Availability of Group II cuts grew steadily in China over the last few years due to new capacity coming on stream, although several plants were heard to be running at reduced rates to avoid oversupply. At the same time, availability of imports was limited, pushing prices higher, particularly for the 150N grade. Some offers for the heavier grade 500N also moved up, but this was mostly caused by higher production costs rather than snug availabilities.

In India, Group II import prices also edged up, but not to the same degree as Group I cuts. On a CFR India basis, Group II values inched up by $5/t-$10/t on tighter availability. Buyers remained cautious as the monsoon season was dampening lubricant demand and blenders were unsure whether they would be able to recoup the higher raw material costs. Additionally, domestic supplies of Group II 150N were deemed plentiful and this lowered the pressure on buyers to acquire imported material at higher prices.

There was upward pressure on Group II light grades because of competing fuel prices, which might encourage Indian refiners to direct more feedstocks into fuel production, although crude oil prices have retreated and this might take some of the pressure off.

Group III

Group III supply and demand was still described as balanced-to-tight, which offered support to current price ideas. As plants in Asia and the Middle East return to production, following turnarounds, availability was expected to improve, although the 4 cSt and 6 cSt grades were less abundant than the 8 cSt grade and therefore saw firmer pricing. At the same time, this may coincide with a period of reduced demand as consumption in automotive segments in several countries has contracted, while seasonal factors also impacted activity in countries such as India.

In China, Group III prices were fairly steady, despite local producers lowering prices in the previous few months to keep imports at bay. The intense competition between local supply and imports seemed to have abated, partly because there were fewer imported Group III cargoes on offer.

In India, Group III spot availability was limited and prices were firm because a key Asian producer was focusing on meeting term commitments and offered little to no spot volumes. Offers from Middle Eastern producers were also scarce as suppliers built inventories, following turnarounds, and also focused on meeting requirements at destinations where margins were more attractive. In any case, demand in India was sluggish because of the heavy rains disrupting travel and transportation, and this dampened demand from the automotive segment.

Shipping

Discussions in base oil shipping circles mostly centered on shipments from South Korea, although a couple of inquiries involved shipments from Taiwan and Indonesia as well. A 1,000-ton lot was mentioned for shipment from Yeosu, South Korea, to Keelung, Taiwan, in mid-July. About 1,000 tons were also expected to be lifted from Onsan, South Korea, to Merak, Indonesia, in late August. A 5,400-ton lot was discussed for shipment from Onsan to Ulsan, also in South Korea, in the first half of July. A 1,000-ton parcel was on the table for shipment from Onsan to Huizhou, China, in late August. A 2,000-ton cargo was discussed for shipment from Cilacap, Indonesia, to Nantong, China, the first week of July. A 2,500-ton parcel was also mentioned for shipment from Cilacap to Chittagong, Bangladesh, in mid-July. About 3,000-4,000 tons were anticipated to be shipped from Mailiao, Taiwan, to Hamriyah, United Arab Emirates, in late July.

Production

The global base oil supply and demand balance is likely to ease as a number of turnarounds will be completed and plants are expected to be restarted, although ongoing shutdowns at a few units, together with permanent closures over the last few years may continue to crimp supplies in some base oil segments.

In the Group I category, Thai Lube Base Oil Plc was expected to shut down a Group I lube base oil unit in Sriracha, Thailand, for 45 days this month, from mid-July until late August.

A turnaround at IRPC’s Group I plant in Thailand, which was completed in May, has also constrained spot availability in the country. The producer was heard to have built inventories to cover term commitments during the outage and had limited spot sales following the maintenance program.

In Japan, tight Group I conditions persisted after the extended shutdown of an Idemitsu Group I unit in Chiba following a fire at the lubricating oil production facility in mid 2024, but the plant was heard to have been restarted at the end of the year. This plant has been scheduled for a turnaround from May until July. A Cosmo Oil unit in Yokkaichi, Japan, underwent an extended maintenance program which began in September 2024 and was completed at end of the year as well.

Eneos also plans to complete maintenance at its Kainan and Mizushima plants in Japan this year. The Kainan plant was shut down from May until June. The Mizushima B plant was expected to be shut down in February. for an extended turnaround that lasted until May. The plant was expected to have been restarted. Later in the year, the Mizushima A unit was scheduled for a one-month turnaround starting in October. All of these shutdowns come on the heels of the permanent closure of two Eneos Group I plants over the last three years.

Recent turnarounds at other units had caused a tightening of spot availability earlier in the year, but the repercussions of these outages continued to be felt.

Indian refiner Hindustan Petroleum Corp. Ltd. restarted its Group I unit in late April/early May after a partial turnaround that started in late Feb. HPCL was also heard to have completed a 45-day turnaround at its Group II trains in May, but this was not confirmed by the producer directly.

Also in India, Chennai Petroleum Corp. Ltd. (CPCL) had a scheduled one-week turnaround at its Group I plant in Chennai in April.

In China, PetroChina’s Dalian Petrochemical refinery in Liaoning province, which includes a Group I plant, started a permanent shutdown process in 2023, with the base oils unit shutting down in late 2024. The refinery closure will be completed in June/July 2025 for its relocation. The company plans to clear all product inventories by the end of August, according to reports.

At the same time, there were expectations that China National Petroleum Corporation (CNPC)/PetroChina’s Fushun plant, also located in Liaoning, would be producing additional Group I base oils that would likely help offset the Dalian closure, market sources said. Fushun has not yet confirmed the Group I volume it will bring online, but earlier estimates had put the Group I bright stock expansion at 60,000 metric tons per year. There were unconfirmed reports that Fushun had started producing additional Group I in late April/early May this year.

Also in China, Sinopec completed a two-month turnaround at its Gaoqiao Group I and Group II plant that started in March.

The Pertamina Group I plant in Cilacap, Indonesia, underwent maintenance work from mid-January until late February/early March. This had constrained the volumes available for export from the facility in the first quarter.

Within the Group II segment, a number of planned turnarounds and an unplanned run cut has also resulted in tight supply of certain grades.

South Korean producer GS Caltex was heard to have restarted operations following a 45-day turnaround at its Group II/Group III unit in Yeosu that started in late Feb. The producer had built inventories to cover term commitments during the outage, but spot supplies remained limited. The plant was heard to have completed the maintenance program in May.

Also in South Korea, Hyundai Oilbank Shell Base Oil significantly reduced operating rates at its Group II base oil plant in Daesan since March due to a refinery outage, which had limited the plant’s feedstock supply. Rates were heard to have been increased in late May.

In China, an unplanned outage at the CNOOC Group II unit in Huizhou impacted availability in the domestic market in the second quarter.

As mentioned above, Sinopec was understood to have scheduled a two-month turnaround at its Gaoqiao Group I and Group II plant that was expected to have been completed in May.

Sinopec was also expected to have shut down its Jinan Group II unit for one month in April.

In India, it was heard that Bharat Petroleum Corp. Ltd. (BPCL) completed maintenance work at its Group II facilities in Mumbai in March. The maintenance program started in late Feb.

Also in India, HPCL was expected to have had a 45-day turnaround at its Group II trains in May, but this was not confirmed by the producer directly.

In the Middle East, Luberef reportedly shut down its Group I and Group II units in Yanbu, Saudi Arabia, for a two-week maintenance program and catalyst change in the second quarter, limiting spot sales from the producer ahead and after the turnaround.

In the U.S., Chevron restarted its Group II plant in Pascagoula, Mississippi, following a four-week turnaround and catalyst change in late May. There was no direct confirmation about the turnaround from the producer, but spot export supplies had been constrained by the turnaround.

Also in the U.S., Motiva restarted its plant in June and was building inventories, following a three-week turnaround at its Port Arthur, Texas, hydrocracker that began in late May.

In the Group III segment, SK Enmove completed a partial turnaround at its Ulsan, South Korea, Group III plant in late June. The turnaround had started in early May, but it was not expected to have a significant impact on supplies—especially of Group II grades–because of uninterrupted production on the facility’s other trains, company sources said.

In the Middle East, ADNOC shut down its Group II/Group III plant in Ruwais, Abu Dhabi, United Arab Emirates, for two to three weeks in early May and was heard to have restarted operations.

Bapco was heard to have started a two-month turnaround and catalyst change at its Group III facilities in Sitra, Bahrain, in May, but details could not be confirmed.

Prices

Crude oil futures fell at the start of the week after OPEC and its allies announced on Saturday that they would increase oil production by a larger-than-expected amount in August. Meanwhile, U.S. stock-market futures declined as the Trump administration delayed implementation of a large group of tariffs until Aug. 1, from an initial deadline of July 9.

On July 7, Brent September 2025 futures were trading at $67.54 per barrel on the London-based ICE Futures Europe exchange, very close to $67.55/bbl registered on June 30.

Dubai front month crude oil (Platts) financial futures for August 2025 settled at $67.67/bbl on the CME on July 3 (there was no trading on July 4 due to the Independence Day holiday in the U.S.), compared to $67.31/bbl for front-month futures on June 27.

Base oil spot prices were generally stable-to-firm, with tighter supplies of some grades pushing prices up. The base oil price ranges portrayed below reflect discussions, bids and offers, as well as deals and published prices widely regarded as benchmarks for the region.

Ex-tank Singapore prices were steady-to-firm. The Group I solvent neutral 150 grade was assessed at $800-$840/t following an upward revision last week. Similarly, the SN500 was steady at $1,060-$1,100/t after moving up by $10/t a week ago. Bright stock prices were firm at $1,380-$1,420/t, all ex-tank Singapore.

Prices for the Group II 150 neutral were holding at $850-$890/t, and the 500N was hovering at $1,100-$1,140/t, ex-tank Singapore, after seeing increases last week.

On an FOB Asia basis, Group I SN150 edged up by $10/t to $680-$720/t, and the SN500 was steady at $920-$960/t. Bright stock prices were firm at $1,260-$1,300/t FOB Asia.

The Group II 150N stabilized at $690-$730/t FOB Asia, following an upward revision last week, and the 500N was assessed steady at $940-$980/t FOB Asia.

In the Group III segment, the 4 cSt grade held at $1,120-$1,160/t, and the 6 cSt was heard at $1,100-$1,140/t. The 8 cSt was unchanged week on week at $970-$1,010/t, all FOB Asia.

Gabriela Wheeler can be reached directly at gabriela@LubesnGreases.com

LNG Publishing Co. Inc./Lubes’n’Greases shall not be liable for commercial decisions based on the contents of this report.