For the time being, many manufacturers opted for absorbing part of the tariffs to avoid a drop in sales, but this was not considered a sound strategy in the long term. While large foreign manufacturers of cars, such as Toyota, may be able to afford absorbing the added costs, industry experts expected a more devastating effect on the small and midsize auto parts suppliers in Japan and South Korea.

Last week, South Korea’s President Lee Jae Myung visited Washington, D.C., to finalize the country’s tariff deal with President Trump as the two sides discussed South Korea’s $100 billion commitment to buy U.S.-origin energy over the next four years. South Korea is already the largest buyer of U.S. crude in Asia, currently securing 460,000-470,000 barrels per day, which would equate to $12 billion-$14 billion per year.

Monsoon rains and flooding continued to affect industrial and agricultural activities in some Southeast Asian nations, parts of India and Pakistan, indirectly also affecting lubricant demand. The season typically comes to an end in September, but this may change this year due to altered weather patterns.

Group I

With growing API Group I supplies reaching the market over the last couple of weeks, prices have started to weaken, as a number of producers adjusted offers down in order to attract buyers. There had been several turnarounds in the previous months, and a number of Group I plants have been shuttered permanently in the last 10 years, resulting in very tight conditions for Group I grades since earlier this year. However, given that the maintenance programs have been completed, refiners were able to offer more spot volumes.

Most of the Group I production takes place in Southeast Asia and Japan. Over the last couple of weeks, it was heard that Thai Lube had offered a few spot cargoes, including bulk availability of Group I SN500 and bright stock. Offers of Thai flexibag volumes were reported to have been revised down since the supplier first brought the cargoes to the market in early August. This week, it was heard that the supplier had offered flexibag volumes of SN500 at $1,035 per metric ton, FCA Thailand, and bright stock at $1,415/t, FCA Thailand. The supplier has also reinstated a co-loading requirement of bright stock with SN500. Back in early August, the SN500 cargoes had been offered at around $1,090/t, FCA Thailand, while bright stock could be obtained near $1,450/t, FCA Thailand, for loading in late September but had encountered buyer resistance.

An Indonesian producer was heard to be prioritizing domestic requirements and has limited its spot availability. The producer typically offers spot barrels through tenders, but no fresh tender was announced last week.

A Japanese producer was expected to have restarted its Group I plant and might resume exports this month or in October, although Japanese base oil exports have fallen over the last couple of years due to plant closures and reduced capacity.

Bright stock continued to be on the tight side, but prospects of increased supplies becoming available in the coming weeks placed downward pressure on prices. The start-up of the ExxonMobil Singapore Resid Upgrade project last month, which will bring an extra-heavy Group II cut to the market with similar characteristics as bright stock, was also expected to add to the pressure.

In China, Group I availability has lengthened as local producers have increased operating rates, leading to reduced price ideas for some grades such as bright stock. The turnarounds at Thai plants had also curbed spot supplies moving to China in the previous months, but since the plants have restarted, there was improved availability of most cuts.

Prospects of Group II ultra heavy-viscosity grade being available from Singapore also dampened buying interest in imported bright stock. A Chinese Group I producer was heard to have offered some Group I volumes for export, but it could not be confirmed whether the cargoes had been sold.

In India, Group I spot prices were holding given muted activity the previous week and ahead of a religious holiday on Sept. 5, as most consumers preferred to work down inventories, rely on contractual volumes and limit fresh purchases. This coincided with more spot volumes coming to the market in the region. Demand from some sectors such as agriculture and manufacturing was still dampened by heavy rains and flooding in some areas.

There were reports of additional Iranian material becoming available and exerting downward pressure on spot indications, but Indian buyers generally preferred to purchase from other origins due to international sanctions. Some Indian buyers expressed interest in spot Group I cargoes offered by a Chinese producer, but no further information was forthcoming whether a transaction had been finalized.

Group II

Increasing Group II supply has started to place downward pressure on prices, particularly on the heavy-viscosity grades, but spot indications on an FOB Asia basis were reported as largely unchanged compared to the previous week.

The completion of plant turnarounds in recent weeks and slowing demand was likely to exacerbate the region’s Group II oversupply, particularly of the heavy grades as refiners prioritized these cuts due to higher margins.

Supply of South Korean Group II 500N was more abundant than the light grades, and this kept prices exposed to downward pressure. There continued to be ongoing buying interest for flexibag cargoes as buyers seemed more comfortable committing to smaller quantities.

In China, there was increased appetite for Group II grades and several local producers have increased domestic prices. These prices received support from scarce light grade base oil imports. Local plants that had been shut down for an extended period due to market economics were heard to have ramped up operating rates.

In India, Group II prices were unchanged from the previous week as activity slowed down during a holiday week, with most buyers able to cover requirements through domestic supplies and term volumes. Lower crude oil and feedstock values over the previous weeks also weighed on base oil price ideas. Domestic supplies of the light grades were tighter because local refiners continued to favor output of the heavy grades due to higher margins.

Discussions for October shipments were anticipated to pick up next week, but it remained to be seen whether the gap between bids and offers could be closed. The lighter grades were less available and suppliers were therefore less willing to reduce offer levels, but prices for the heavy grades seemed to be holding as well. South Korean suppliers may opt for shipping product to other destinations such as the Middle East if buying indications are more attractive.

U.S. producers have started to look at opportunities to clear the extra emergency supplies that have been kept during the hurricane season along the U.S. Gulf Coast and were looking for export inquiries. There were reports of U.S.-origin Group II light grades having been offered into India, but discussions were somewhat subdued this week and should increase next week for September/October liftings.

Group III

Group III prices were stable to firm, receiving support from a balanced-to-tight supply and demand scenario. Prices were generally reported within the published ranges, but at least one producer’s prices carried a premium because of its full approvals and ability to offer global supply from multiple production sites. The producer’s lowest prices for all grades were above the high end of the published FOB Asia ranges.

Additionally, another supplier had been able to offer very competitive prices to gain market share in the previous months, but the refiner’s price policies may change as the company seeks higher profitability, according to market sources. The published price ranges might be revised pending further information.

There had been expectations of increased supplies emerging from Bahrain this month as Bapco completed a maintenance program at its plant in late July, but the supplier was heard to be unable to offer spot cargoes for the time being, according to sources, who added that some of Bapco’s customers had inquired about spot availability from other suppliers. This could not be confirmed with the producer directly.

In China, Group III producers continued to offer competitive pricing compared to imports to protect or gain market share. As a result, reports about spot transactions that involved imports were largely absent.

In India, Group III prices were stable, with little fresh spot business reported during the week as consumers relied on term purchases. With demand picking up at higher-priced destinations such as Europe following the end of the summer holidays, more Group III base oils of various origins might be lured to those markets instead of India.

Shipping

• A 5,000-metric ton cargo was discussed for shipment from Rotterdam, the Netherlands, to Mumbai, India, the second half of September.
• About 10,000 tons were mentioned for shipment from South Korea and/or Taiwan to Pakistan in late September.
• About 1,000 tons were on the table for lifting from Onsan, South Korea, to Jingjiang, China, on Sept. 20-22.
• A 2,000-ton cargo was anticipated to load in Mailiao, Taiwan, to Port Klang, Malaysia, at the end of September.
• A 2,250-ton lot was mentioned for shipment from Onsan to Singapore in mid-September.
• Between 6,000 tons and 9,000 tons were quoted for shipment from Yeosu, South Korea, to Indonesia in October.
• About 4,000 tons to 6,000 tons were on the table for loading in Jeddah and/or Yanbu, Saudi Arabia, to Singapore in late September.
• About 2,000 tons were being considered for shipment from Yeosu, South Korea, to Vietnam in October.

Production
The global base oil supply and demand balance has started to ease as a number of turnarounds have been completed and plants have been restarted, although reduced output at a few units together with permanent closures over the last few years may continue to crimp supplies in some base oil segments. Turnarounds that took place earlier in the year are still listed below as they may have impacted base oil pricing at the time of completion and beyond.

Group I

• Thai Lube Base Oil’s Group I unit in Sriracha, Thailand, was shut for 45 days from mid-July to the second half of August.
• Chennai Petroleum has scheduled a turnaround at its Group I base oils plant in Chennai, India, starting in September.
• PetroChina’s Dalian refinery began a permanent shutdown in 2023. The base oils unit closed in late 2024, with full closure expected by July 2025. Inventory clearance was scheduled by the end of August.
• CNPC’s Fushun plant in Liaoning is expected to increase Group I production to offset the Dalian closure. Bright stock capacity estimated at 60,000 t/y.
• IRPC’s Group I plant in Thailand, offline for maintenance in May, has resumed operations.
• In Japan, Group I supply remains tight after extended shutdowns at Idemitsu’s Chiba unit, which was completed at the end of July or early August, and Cosmo Oil’s Yokkaichi unit.
• Eneos completed maintenance at its Kainan (May-June) and Mizushima B (February-May) plants. Mizushima A is scheduled for maintenance in October.
• Two Eneos Group I plants were permanently closed in recent years.
• HPCL in India restarted its Group I unit in late April or early May following a partial shutdown.
• CPCL had a one-week maintenance at its Chennai Group I plant in April.
• Sinopec completed a two-month turnaround at its Gaoqiao Group I and II plant in May.
• Pertamina’s Group I plant in Cilacap, Indonesia, underwent maintenance from mid-January to late February or early March.

Group II

• ExxonMobil has completed an expansion of its Singapore Group II unit and commenced on-spec production in August.
• Formosa Petrochemical has postponed a scheduled turnaround and catalyst change at its Mailiao, Taiwan, plant from the fourth quarter of 2025 to 2026.
• BPCL completed maintenance at its Group II plant in Mumbai, India, in March, but there were reports of ongoing reduced output that may last throughout August, with a short shutdown planned that month.
• HPCL reportedly conducted a 45-day turnaround at its Group II trains that started in May and was completed in July after a delayed restart.
• Excel Paralubes has scheduled a turnaround at its Lake Charles, Louisiana, plant in October. The plant has been running at reduced rates, limiting spot availabilities in the U.S.
• GS Caltex completed a 45-day turnaround at its Group II/III unit in Yeosu, South Korea, in late February to May, which had limited spot supply.
• Hyundai Oilbank Shell Base Oil cut run rates at its Daesan plant from March due to feedstock limitations; increased rates in late May.
• An unplanned outage at CNOOC’s Group II unit in Huizhou affected China’s Q2 availability.
• Sinopec’s Gaoqiao plant turnaround ended in May; its Jinan Group II unit was shut for a month in April.
• Luberef shut down its Group I and II units in Yanbu, Saudi Arabia, for two weeks in Q2 for maintenance and catalyst change.
• Chevron restarted its Group II plant in Pascagoula, Mississippi, after a four-week turnaround in late May.
• Motiva restarted operations in June after a three-week turnaround at its Port Arthur, Texas, hydrocracker beginning in late May.

Group III

• SK Enmove completed a partial turnaround at its Ulsan Group III plant in late June; production on other trains continued.
• Adnoc shut its Group II/III plant in Ruwais, UAE, for two to three weeks in early May; operations have resumed.
• Bapco began a turnaround and catalyst change at its Group III plant in Sitra, Bahrain, in May and completed it in late July.
• Hainan Handi had an extended shutdown at its plant in China, starting in mid-June.
• Sinopec was expected to restart its Group III plant in Yanshan in late July.

Prices

Crude
Crude oil futures fell on Friday as traders anticipated weaker demand in the U.S. following the Labor Day holiday on Sept. 1, while OPEC and its allies were expected to boost demand in the coming months. Futures held at bearish levels at European opening on Monday morning.

Brent November 2025 futures were trading at $68.12 per barrel on Sept. 1, up from $67.94/bbl for October futures on Aug. 25 (ICE Futures Europe).
Dubai crude futures (Platts) for September 2025 settled at $69.71/bbl on Aug. 29, up from $69.04/bbl for front-month futures on Aug. 22 (CME).

Base Oils
Spot base oil prices were steady to soft, with values for some grades slipping on growing supply and weaker demand.

The 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
Group I solvent neutral 150 fell by $20/t to $790/t-$830/t
SN500 was also adjusted down by $10/t to reflect current discussions at $1,040/t-$1,080/t
Bright stock prices were stable at $1,390/t-$1,430/t

Group II 150N was down by $10/t at $840/t-$880/t
500N was assessed unchanged at $1,060/t-$1,100/t

FOB Asia
Group I SN150 slipped by $20/t to $670/t-$710/t
SN500 was assessed down by $10/t at $870/t-$910/t
Bright stock inched down by $10/t to $1,250/t-$1,290/t

Group II 150N was steady at $710/t-$750/t
500N was also holding at $880/t-$920/t

Group III grades were stable to firm
4 cSt heard at $1,080/t-$1,120/t
6 cSt inching up by $10/t to $1,090/t-$1,130/t
8 cSt was hovering at $950/t-$990/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.