Trade tensions between the U.S. and several Asian nations, including the world’s second largest economy, China, appeared to have eased following negotiations during U.S. president Donald Trump’s tour of Asia last week.

Trump reached an agreement with Chinese President Xi Jinping that promised U.S. tariff reductions and a pause in Beijing’s new restrictions on rare earth minerals and magnets. The deal includes the resumption of Chinese purchases of American soybeans and wards off Trump’s threat to impose a 100% tariff on Chinese goods. The reduction on the duties that were first imposed in February will lower the overall U.S. tariff rate on Chinese imports to about 47% from 57%, according to U.S. officials. This figure includes duties of about 25% imposed on Chinese imports during Trump’s first term in the White House and a reduced, 10% “reciprocal” tariff imposed in April together with previous “Most Favored Nation” tariff rates. China agreed to a one-year pause on export controls it had threatened to impose on rare earths minerals and magnets, which are a key component in the manufacture of cars, airplanes and weapons. Trump also signed separate agreements with Japan, Cambodia, Vietnam, Malaysia and Thailand.

Group I
Conditions in the Group I segment were largely unchanged from the previous week, with the light grades displaying a tighter supply and demand scenario, offering support to slightly higher prices. A short-lived spike in crude oil and feedstock prices last week also propped prices up. The heavy-viscosity grades were more readily available and this weighed on pricing. Bright stock availability has improved, and this grade was therefore also exposed to downward pressure.

As has been the case over the last several weeks, most Group I spot offers emerged from Southeast Asia, but there was some spot availability of Chinese supplies for second half November shipment as well. Small volumes of SN150, SN500 and bright stock of Thai origin have been on offer, and there were expectations that both these supplies and the Chinese cargoes might find buyers in India.

China typically seeks imports of heavy-viscosity base oil grades as there is a chronic shortage of these cargoes in that country, but there has been an uptick in domestic supplies of the Group I grades coinciding with softer demand due to the start of the winter season, when the heavy grades see reduced demand levels.  

There was limited availability of light Group I grades and demand tends to strengthen in the colder months, while buying interest for the heavy grades has subsided, weighing on prices of both domestic and imported products.

Bright stock may be an exception in that domestic Group I producers have increased prices slightly, and this lent support to import prices of bright stock as well. There were also reports of some bright stock availability from Thailand.

In India, refiners were expected to reduce their purchases of Russian crude oil due to recently imposed sanctions on Russian exports amid trade tensions betwee India and the U.S. Last week, it was reported that India’s largest private oil refiner, Reliance Industries, had suspended purchases of Russian crude, while other Indian refiners were also looking to cut back on Russian oil purchases, raising hopes that this would expedite a U.S.-India trade deal. However, this week, Reuters reported that India was expected to have imported more oil from Russia in October than in the previous month, despite continued pressure from the Trump administration.

Russian crude had been available at a low price, allowing Indian refiners to offer domestic supplies of base oils at competitive levels. Whether a switch in the crude supply mix might impact domestic base oil prices moving forward remained to be seen.

For the time being, Group I prices for domestic supplies were under pressure due to ample availability and lackluster buying appetite. Imported heavy grades also underwent downward adjustments of about $5 per metric ton on a CFR India basis given additional cargoes emerging from Thailand and China, while imported bright stock saw slightly larger price reductions. On the other hand, the light grades inched up on tighter supplies and prospects of reduced supplies from a Middle East producer whose plant will be undergoing a turnaround from mid-November.

Group II
Within the Group II segment, similar dynamics to those seen in the Group I category were at play, with the heavy-grades seeing more downward pressure on ample availability and softer demand than the light grades. However, most November transactions have reportedly been finalized and the Group II sector showed generally tighter conditions than the Group I segment, particularly as supplies of the heavy-viscosity cuts from a South Korean refiner were more strained than in the previous weeks. However, the current balance might be offset if additional cargoes are released into the spot market by U.S. producers once a turnaround at a key Group II facility is completed. An uptick in crude oil prices also offered temporary support to higher Group II price expectations.

There was little fresh news about the sole Taiwanese Group II producer, Formosa Petrochemical, which had in the past shipped a large portion of its production to China, but has recently been more actively exporting to other destinations such as India and the Middle East. Domestic prices from the supplier for November shipments were expected to be rolled over from October.

In China, import supplies of the Group II light grades were not plentiful and this offered support to steady prices. At the same time, there has been ample supply of locally-produced heavy grades, which have also seen softer demand levels, resulting in reduced domestic prices.

A Shandong producer had scheduled a forty-five day turnaround in October and has not been actively offering cargoes, driving up offers from other domestic producers. A  second producer might be shutting its plant down for maintenance this month. Some producers in China idle production when market economics are not favorable and demand is soft, particularly as there appears to be an oversupply of Group II base oils.

In India, import prices for the Group II 500N were heard to have slipped by about $5-10/ton on a CFR India basis as demand has declined and supplies were plentiful. The lighter grades, on the other hand, saw moderate increases of $5-10/t on a CFR India basis on tighter availability and healthier buying interest.

Even so, Indian demand for most base oils was not robust as buyers preferred to wait for additional supplies to come to the market, namely from the U.S., as suppliers draw down inventories at the end of the hurricane season along the U.S. Gulf Coast. A turnaround at a key U.S. facility had prompted some of the producers to hold back on fresh offers until there was a clearer picture of the domestic supply situation, as a second U.S. producer was still rebuilding inventories following an extended turnaround in August/September.

National oil company Indian Oil Corp.’s Group II supply was not expected to be affected by Group III expansion work at the Haldia refinery but could see reduced availability as the producer plans to perform maintenance before the start-up of the expanded facilities near the end of the year. It could not be confirmed whether the start-up was on schedule.

Group III
Group III prices underwent few changes during the week, as supply and demand was fairly balanced in most markets, with a recent reduction in spot volumes from a South Korean producer tightening supplies in Asia.

SK-Pertamina had also shut down its plant in Dumai, Indonesia, for unplanned maintenance following a fire at the associated refinery on October 1, although the base oil unit had not been directly affected by the fire. The plant was heard to have been restarted and supplies to term customers have not been affected, according to company sources.

In China, local production of Group III grades has increased over the last two years and will continue to expand in the coming years, according to sources. Domestic supplies were deemed sufficient to meet a large portion of demand, with local producers also offering attractive prices to compete with imported product and gain market share. This week, domestic Group III prices were deemed largely steady to slightly higher, depending on the supplier.

In India, Group III supply and demand were largely balanced and this supported steady prices. There was not much spot activity as most consumers continued to run operations utilizing contract volumes rather than seek additional spot barrels. The 4 cSt cut was still described as tighter compared to the other grades.

National oil company Indian Oil Corp.’s was expected to complete an expansion of its Group III plant in Haldia in the fourth quarter, which might reduce India’s reliance on Group III imports.

Most Group III prices were reported within the published ranges in Asia, 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. The published ranges may be adjusted in the coming weeks pending further market input.

Shipping

• A 4,000-metric-ton cargo of base oils was discussed for shipment from Sriracha, Thailand, to Ras Al Khaimah, United Arab Emirates, in the second half of November.
• A 2000-ton lot was expected to be shipped from Malacca, Malaysia, to West Coast India between Nov. 9-11.
• A 1,400-ton parcel was quoted for shipment from Onsan, South Korea, to Huizhou, China, in mid-Nov.
• A 400-ton parcel was mentioned for shipment from Onsan to Nantong, China, in late Nov.
• A 2,300-ton cargo was on the table for lifting in Onsan and delivery in Taichung, Taiwan, in mid-Nov.
• A 1,750-ton lot was expected to be shipped from Onsan to Bangkok, Thailand, in late Nov.
• A 2,100-ton cargo was discussed for lifting in Yokkaichi/Kainan, Japan, to Hong Kong in mid-Nov.
• Approximately 1,000 tons were likely to be shipped from Onsan to Singapore in mid-Nov.

Production

The global base oil supply and demand balance has eased 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
Luberef (Saudi Aramco Base Oil Co.) has scheduled a 45-day turnaround at its plant in Yanbu, Saudi Arabia, from mid-November until December. The unit produces Group I, Group II and Group III base oils. The plant underwent an expansion in 2017. 

• Chennai Petroleum has scheduled a turnaround at its Group I plant in Chennai, India, in September or October for approximately one month.
• Thai Lube Base Oil’s Group I unit in Sriracha, Thailand, was shut for 45 days from mid-July to second half August.
• 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 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/early August, and Cosmo Oil’s Yokkaichi unit.
• Eneos completed maintenance at its Kainan (May–June) and Mizushima B (Feb–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/early May following a partial shutdown.
• Sinopec completed a two-month turnaround at its Gaoqiao Group I and II plant in May.
• CPCL had a one-week maintenance at its Chennai Group I plant in April.
• Pertamina’s Group I plant in Cilacap, Indonesia, underwent maintenance from mid-January to late February/early March.

Group II
ExxonMobil has completed an expansion of its Singapore Group II unit and commenced on-spec production in August. The producer has started to offer an ultra-heavy Group II grade with similar characteristics to bright stock.

• Bharat Petroleum delayed a brief turnaround to October from earlier in the year, but there was no confirmation whether the plant had been shut down this month.
• Formosa Petrochemical has postponed a scheduled a 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 was expected to last throughout August, with a short shutdown planned that month.
• HPCL reportedly conducted a 45-day turnaround at its Group II trains from May until July, following some delays.
• Excel Paralubes has scheduled a turnaround at its Lake Charles, Louisiana, U.S. 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, U.S., after a four-week turnaround in late May.
• Motiva restarted operations in June after a three-week turnaround at its Port Arthur, Texas, U.S., hydrocracker beginning in late May.

Group III
A fire at SK-Pertamina’s refinery in Dumai, Indonesia, broke out on October 1 but was quickly extinguished, with no impact to base oil supply reported. The Dumai Group III base oil plant was shut down for maintenance after the fire and has been restarted. Term supplies were not expected to be affected. Pertamina also operates a Group I plant in Cilacap, Indonesia. The Dumai refinery is a joint venture between Indonesian state-run Kilang Pertamina Internasional and South Korean producer SK Enmove.

• Indian Oil Corp. was expected to complete an expansion of its Group III capacity in Haldia in the fourth quarter, but it could not be confirmed whether the start-up was on schedule.
• 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-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 steadied on Monday on news that OPEC+ members had decided at their monthly meeting on Sunday to lift their output by 137,000 barrels per day for December, a smaller amount than in the previous months. However, the organization plans to pause its output increases in the first quarter of next year to avoid global oversupply.

• Brent January 2025 futures were trading at $64.85 per barrel on Nov. 3, down from $66.21/bbl for front-month futures on October 27 (ICE Futures Europe).
• Dubai crude futures (Platts) for November 2025 settled at $66.01/bbl on Oct. 31, down from $66.87/bbl for front-month futures on Oct. 24 (CME).

Base Oils
Spot base oil prices in Asia were stable-to-soft as the heavy grades experienced small downward adjustments on account of weaker demand against plentiful supplies.

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 was steady at $780/t-$820/t
SN500 was down by $10/t at $970/t-$1,010/t
Bright stock prices were heard slightly lower by $10/t at $1,350-$1,390/t

Group II 150N was holding at $820/t-$860/t
500N was assessed down by $20/t at $1,000/t-$1,040/t

FOB Asia
Group I SN150 was steady at $680/t-$720/t
SN500 slipped by $10/t to $800/t-$840/t
Bright stock prices edged down by $10/t to $1,190/t-$1,230/t

Group II 150N was steady at $710/t-$750/t
500N was also unchanged at $840/t-$880/t

Group III grades were steady
4 cSt holding at $1,080/t-$1,120/t
6 cSt at $1,070/t-$1,110/t
8 cSt was hovering at $920/t-$960/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.