Participants were monitoring crude oil futures because numbers had moved up during previous trading sessions due to the strained situation between the U.S. and Iran, but they fell by nearly 5% on Monday–the steepest single-session decline in more than six months–after possible talks between the two countries and a de-escalation of tensions, Reuters reported.

Group I

There were different levels of activity noted within the API Group I segment, with the light grades receiving more attention as they are more widely used during the winter months, and the heavy grades getting exposed to downward pressure due to ample supplies and sluggish demand. Prices for the light grades remained steady or edged up slightly, receiving support from stronger consumption and tightening availability. Bright stock managed to keep price levels or inched up, depending on its origin.

Group I availability that had been mostly coming to the market from Southeast Asia has shrunk as most February cargoes were reported sold.

The Thai Group I producer had offered several small cargoes of Group I SN500 and bright stock for February shipment over the last few weeks, and these appeared to have been placed. The latest offer of SN500 was reportedly hovering at $870 per ton FCA Thailand and bright stock at $1,275/t FCA Thailand, but it could not be ascertained whether the cargoes had fetched these prices or slightly lower.

An Indonesian producer will be closing a tender on February 2 for end-Feb. lifting. The tender involved small cargoes of SN130, SN250 and bright stock and a bulk offer of bright stock.

A Japanese producer has also closed a tender on January 30 for a combined cargo of SN150, SN500 and bright stock for second-half February lifting.

In China, some buyers were seeking cargoes ahead of the Lunar New Year holidays in mid-February, but most have already concluded their February purchases and others were conservative in terms of purchased volumes as prospects in lubricant markets were still not well-defined on ongoing economic uncertainties.

Domestic bright stock prices have been adjusted down on an ex-tank China basis because sellers hoped to attract buyers and conclude business before the holidays. Imports from Thailand have been plentiful since last November and domestic supplies were also available, offering consumers a sense of confidence that there would not be any shortages after their return to business.

As was the case in China with Thai and domestic supplies, prospects of increased availability from a key Middle East producer into India following a turnaround in November/December along with domestic production took some pressure off Indian buyers to jump at the first offer they received as availability of Group I cuts appeared to be growing more plentiful. There have also been offers of Iranian Group I product, but buyers were generally less eager to get a hold of these barrels due to international sanctions.

Group II

Prices for the Group II light grades appeared to have stabilized and have moved up in some cases on tightening supplies, while the heavy grades remained exposed to downward pressure because of ample availability and lukewarm demand. The imbalance between light grades and heavy grades was mostly attributed to refinery economic, which favored production of the heavy cuts. Despite the ample supplies, the heavy grades managed to hold their ground this week as discussions were thin and suppliers did not adjust prices down given fewer offers in the market and climbing crude oil values.

Offers from a South Korean producer were heard to combine light grades and heavy grades as the supplier appears to be slightly long on the heavier cuts. A second South Korean producer has suspended offers because it started to build inventories to continue supplying contract customers during a planned shutdown in late March.

In Taiwan, the sole Group II producer, Formosa Petrochemical, was heard to have increased domestic list prices for the 70N and 150N grades by New Taiwan Dollars (NT$) 0.21 per liter and decreased its heavy grade by NTD 0.60/liter, with an effective date of February 1. (NT$1.00  = US$0.03)

In China, distributors were trying to lower stocks ahead of the Lunar New Year holidays and offered competitive prices. South Korean products in particular were available at attractive prices compared to domestic material. There were also February-loading cargoes of Taiwanese Group II base oils on the table. But buyers preferred to keep lean inventories during the festive period and seemed reluctant to acquire more cargoes.

In India, light Group II base oils were generally stable to slightly higher, supported by steeper crude oil and gasoil values during the week, but trading remained muted. While some blenders have started to prepare lubricant inventories for the last quarter of the fiscal year, which ends on March 31, and have secured base oils, some appeared more hesitant given the general business environment, the pressure on Indian refiners to stop buying heavily-discounted Russian crude, and other pressures which may impact markets in the coming months.

At the same time, there was some optimism coming from the signing of a trade deal between India and the EU, which might incentivize Indian manufacturing and exports.

Imports of the 70N were heard to have edged up by $5/t on a CFR India basis week-on-week, while the 500N moved down by $5/t on more ample availability and lackluster buying interest. There was some concern about imports becoming tighter as a South Korean producer who routinely supplies spot cargoes will be embarking on a turnaround in late March and was likely to curtail spot availability.

Group III

Prices for the Group III grades were generally stable, despite some higher offers being bandied about for the 4 cSt grade, which was in tighter supply. The 4 cSt was reported as strained in Southeast Asia, with some sources noting that availability from Malaysia had been particularly limited.

In China, domestic prices and imports of Group III were reported as steady, with spot business described as muted as most buyers rely on contract volumes. Buying appetite ahead of the holidays was also understandably lackluster.

One novel development in Group III circles was that a key domestic Chinese producer exported the first Group III cargo from its refinery in Yanshan last week. The 2,000-ton cargo made up of three grades was heard to have been lifted from Tianjin to Port Klang, Malaysia, between January 28-29 on the FPMC S Emerald.

China had so far been a net importer of Group III grades, but the construction of new Group III plants in recent years has allowed the country to become less dependent on imports. A number of additional domestic Group III plants were expected to come on line in China over the next couple of years, including a coal-to-liquids unit along with increased polyalphaolefin and naphthenic base oils capacity, and this was anticipated to exert pressure on values in the future.

In India, there was less active spot trading of Group III grades as most buyers rely on contract volumes to meet their requirements and participate less offen in spot business. Demand for Group III grades was likely to continue showing steady growth in India due to an expanding middle class that will be able to afford a two-wheeler or a passenger car. Automotive suppliers mostly have contracts with lubricant suppliers that specify which high-performance base oils to use in blending operations and this keeps Group III demand at fairly steady levels.

National oil company Indian Oil Corp. was heard to have completed an expansion of its Group III plant in Haldia. The refinery was heard to have shut down in November for maintenance on the existing Group II trains and has started output of Group III cuts.

Most Group III prices were reported within the published ranges in Asia, but at least one producer’s prices carry 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.

Shipping

• Details of a recent base oils transaction emerged during the week: About 7,750 tons were loaded in Daesan, South Korea, to Zhapu and Tianjin, China, between Jan. 10-17 on the Nan Lian 006.
• A base oils cargo was expected to be lifted from Ulsan/Yeosu, South Korea, to Hamriyah, United Arab Emirates, between Feb. 10-20.
• A 4,000-ton lot was likely to be shipped from South Korea to Callao, Peru, in the second half of Feb.
• A 3,000-ton cargo was also on the table for lifting in Ulsan, South Korea, to Guayaquil, Ecuador, in Feb.
• About 2,000 tons were mentioned for shipment from to Onsan to Jingjiang, China, in mid-Feb.
• A 2,000-ton parcel was quoted for shipment from Thailand to West Coast India in the first half of February.
• About 5,000 tons were expected to be shipped from Taiwan to the UAE at the end of Feb.

Production

A number of turnarounds have already been announced for 2026. The latest information is provided below, along with turnarounds 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 scheduled a 45-day turnaround at its plant in Yanbu, Saudi Arabia, from mid-November until December 2025. The unit produces Group I, Group II and Group III base oils. The plant underwent an expansion in 2017. The company had shut down its plants in Yanbu and Jeddah for about a week in Q2 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.
• Eneos’s Mizushima A underwent maintenance from October to November 2025 in Japan.
• Two Eneos Group I plants were permanently closed in recent years.
• Chennai Petroleum completed a turnaround at its Group I plant in Chennai, India, in September/October 2025 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 2025.
• 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

• Hyundai Oilbank Shell Base Oils plans to shut down its plant in Daesan, South Korea, in late March/April 2026 for approximately 45 days
• ExxonMobil has 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.
• Formosa Petrochemical postponed a scheduled turnaround and catalyst change at its Mailiao, Taiwan, plant from the fourth quarter of 2025 to third quarter of 2026.
• HPCL reportedly conducted a 45-day turnaround at its Group II trains from May until July 2025 in India, following some delays.
• Excel Paralubes completed a scheduled turnaround at its Lake Charles, Louisiana, U.S. plant in October 2025. The plant had been running at reduced rates for most of the year, limiting spot availabilities in the U.S., but a catalyst change has allowed the company to maximize output.
• Motiva restarted operations in June 2025 after a three-week turnaround at its Port Arthur, Texas, U.S., hydrocracker beginning in late May. However, some production issues lingered for several more weeks, reducing the producer’s Group II inventories and tightening Group II spot availability in the second half of 2025.

Group III

• Petronas plans to shut down its Group II/Group III Melaka plant in Malaysia for a turnaround in mid-2026.
• 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 should bring more Group III supplies to the market in early 2026.
• A fire at SK-Pertamina’s refinery in Dumai, Indonesia, broke out on October 1, 2025, 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 was restarted shortly after. Term supplies were not expected to have been 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.
• Sinopec restarted its Group III plant in Yanshan, China, in late July 2025.

Prices

Crude Oil
Crude oil futures plunged on Monday as U.S.-Iran talks eased fears of supply disruptions and reduced the war premium, following a price spike the previous week.

• Brent April 2026 futures were trading at $66.08 per barrel on February 2, 2026, up from $66.02/bbl for front-month futures on Jan. 26 (ICE Futures Europe).
• Dubai crude futures (Platts) for February 2026 settled at $67.89/bbl on Jan. 30, 2026, up from $64.06/bbl for front-month futures on Jan. 23 (CME).

Base Oils
Spot base oil prices in Asia were steady to soft, with activity still muted and downward pressure on the heavy grades due to ample supplies and sluggish 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 was steady at $790/t-$830/t
SN500 was lower by $10/t at $860/t-$900/t
Bright stock prices were stable at $1,260-$1,300/t 
Group II 150N was holding at $830/t-$870/t
500N was lower by $10/t at $910/t-$950/t

FOB Asia
Group I SN150 was steady at $670/t-$710/t
SN500 fell by $10/t to $680/t-$720/t
Bright stock prices were holding at $1,090/t-$1,130/t

Group II 150N was stable at $720/t-$760/t
500N was holding at $750/t-$790/t

Group III grades were steady:
4 cSt was heard at $1,090/t-$1,130/t
6 cSt was assessed at $1,060/t-$1,100/t
8 cSt was holding at $900/t-$940/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.