Weekly Asia Base Oil Price Report

On the international trade side, after months of negotiations, on Feb. 6, the U.S. and India finalized the framework of a trade deal ahead of their Bilateral Trade Agreement under, which Washington D.C. will bring down the reciprocal tariffs on Indian goods to 18%, from a hefty 50% previously. The U.S. will apply a tariff rate of 18% on originating goods from India, including plastic and rubber, organic chemicals, textile and apparel, leather and footwear, home décor, artisanal products, and certain machinery. India will also receive a preferential tariff rate quota for automotive and aircraft parts, and will eliminate or reduce tariffs on all U.S. industrial goods and a broad set of agricultural and food products. Following the tariff reductions, India will enjoy the second lowest U.S. tariffs in Asia, after only Japan, with Chinese goods paying significantly higher rates compared to India.

At the same time, as part of the agreement, India intends to purchase $500 billion worth of U.S. goods over the next five years, including fossil fuels, aircraft, precious metals and technology. Additionally, India has committed to halting imports of Russian crude oil and switching to U.S. and potentially Venezuelan supplies. This might impact Indian refiners who had so far been able to secure heavily discounted Russian crude.

The interim trade agreement between India and the U.S. follows a free trade agreement signed between India and the European Union on Jan. 27. The EU is India’s largest trading partner, accounting for €120 billion worth of trade in goods in 2024 or 11.5% of total Indian trade, according to the official website of the EU. India is the EU’s ninth-largest trading partner, accounting for 2.4% of the EU’s total trade in goods in 2024.

Group I

In the API Group I segment, the light grades continued to command the most attention and prices were assessed as steady-to-slightly softer. A spike in crude oil prices during the previous week and ongoing demand for the light grades, which typically are preferred during the colder months, offered support to pricing, but numbers experienced some softening given improved supply levels in the region.

The heavy grades remained exposed to downward pressure due to ample supplies and lukewarm demand, although bright stock was still in the spotlight as this grade is difficult to replace. The approach of the Lunar New Year holidays in China and other nations, which last at least seven days, starting on Feb. 15, were expected to dampen lubricant demand, particularly from the industrial segment. Businesses, especially manufacturing, shut down or operate at minimum capacity for two to four weeks or more, with factories often closing one or two weeks before the official Lunar New Year’s Day on Feb. 17, and reopening one or two weeks after the break. Major disruptions to supply chains were anticipated, with production slowing and logistics heavily impacted from mid-January through early March. 

Base oil demand in China and some other countries was therefore expected to be dampened by the holidays, offsetting any tightness that had been observed in the Group I segment. In fact, Group I availability was said to be improving, with most offers coming to the market from Southeast Asia and Japan.

Offers from Thai Group I producer that has been active in the spot market and has offered several small cargoes of Group I SN500 and bright stock for February shipment over the last few weeks appeared to have concluded some deals, but March offers have not emerged yet.

An Indonesian producer was heard to have sold a few small cargoes of SN130, SN250 and bright stock, but is still in possession of additional small lots and bulk volumes of bright stock, priced on an ex-works Jakarta basis.

A Japanese producer closed a tender on January 30 for a combined cargo of SN150, SN500 and bright stock, totalling about 4,000 tons, for second-half February lifting, but according to sources, the tender was not awarded as bid levels did not meet the producer’s price expectations.

In China, activity has started to slow down ahead of the Lunar New Year as buyers have built inventories and were not expected to return to the market until after the holidays, when most deliveries will resume.

Domestic bright stock demand has waned because of the anticipated manufacturing slowdown during the holidays, but domestic prices were heard to be steady, which was particularly significant for ex-tank prices as they had been hovering at multi-month lows.

Group I prices in India were reported as generally unchanged from the previous week, with higher feedstock costs offering support. Prospects about a key Middle East producer ramping up production following a turnaround in November/December made Indian buyers confident that Group I supply would be more plentiful in the next few weeks. This, together with the fact that domestic plants were running well and there was also potential availability from Iran, lowered the pressure on buyers to rush and secure cargoes, particularly as tensions between the U.S. and Iran seemed to be easing.

A domestic Indian producer has increased Group I light-grade prices for February, but lowered the high-viscosity grades and bright stock given more plentiful supplies and lukewarm demand.

Group II

Prices for the Group II light grades were reported as largely stable, despite the fact that  the heavy grades were still more abundant than the light grades and a South Korean supplier was, in fact, requiring the bundling of light grades with heavy grades to conclude transactions. Climbing crude oil prices during the previous week on U.S.-Iran tensions offered additional support to pricing. The imbalance between light grades and heavy grades was mostly attributed to refinery economics, which favored production of the heavy cuts.

A South Korean producer was understood to have suspended spot offers because it was not receiving the bid levels it expected and it has 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, has 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 Feb. 1. (NT$1.00  = US$0.03)

In China, buying interest has subsided ahead of the Lunar New Year holidays and Group II spot availability remained plentiful, particularly of the heavy grades. Domestic suppliers were heard to have kept light grade prices unchanged and have lowered the heavy grades to reduce inventories, but even this strategy failed to attract buyers. South Korean high-viscosity cuts were heard to be available at more competitive prices than Taiwanese heavy grades.

In India, imports of the 70N and 150N cuts were heard to have edged up by $5/t on a CFR India basis week-on-week, while the 500N slipped by $5/t on ample supplies. The light grades received additional support from climbing feedstock values in recent days. 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.

Meanwhile, on the domestic side, a key producer increased prices for its Group II light grades and lowered the price of its heavy grade, reflecting the trend observed for imported products and buyers’ preference to acquire more of the 70N and 150N grades and less of the 500N cut.

Group III

The Group III grades managed to maintain a steady course over the week on generally snug supply and demand conditions. However, no shortages were reported and producers have been able to comfortably meet all of their contract commitments. With turnarounds not scheduled at plants in Malaysia and Indonesia until the end of the first half of the year, there were expectations that supplies would remain sufficient until those suppliers start to build inventories to cover term obligations during the outages.

In China, domestic prices and imports of Group III were reported as steady, with spot business described as subdued ahead of the Lunar New Year holidays.

The construction of new Group III plants in China 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 few years as well, including a coal-to-liquids unit along with increased polyalphaolefin and naphthenic base oils capacity.

In India, spot trading has taken a back seat as term requirements are being fulfilled and few additional spot volumes were sought. Manufacturing operations and auto plants in particular were running well ahead of the end of the fiscal year on March 31, with lubricant demand receiving a boost as a result.

Fresh trade agreements between India and the European Union and a separate one between India and the U.S. were anticipated to support India’s exports and economic development, with base oils and lubricants demand expected to show sustained growth as well.

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

6,000 to 8,000 metric tons were under consideration for lifting on the U.S. Gulf to Mumbai, India, Feb. 7-25
10,000-metric ton cargo was mentioned for possible liftting in Ulsan/Yeosu, South Korea, to Mumbai and Hamriyah, United Arab Emirates, in mid-Feb.
2,000-ton parcel was on the table for lifting in Yeosu to Rugao, China, March 3-10.
10,000 cargo was discussed for shipment from Ulsan/Yeosu, to Hamriyah, Feb. 15-20.
6,000-ton parcel was mentioned for shipment from South Korea to the U.S. Gulf Coast in February.
4,000-ton lot was likely to be shipped from South Korea to Callao, Peru, in the second half of February.
3,000-ton cargo was also on the table for lifting in Ulsan, South Korea, to Guayaquil, Ecuador, in February.
2,000 tons were mentioned for shipment from to Onsan to Jingjiang, China, in mid-February.
700-ton lot was also expected to be lifted from Onsan to Nantong, China in mid-February.
5,000 tons were expected to be shipped from Taiwan to the UAE at end February.

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

Crude oil futures fell in early trading on Monday following diplomatic meetings between the U.S. and Iran in Oman last Friday, easing fears of global supply disruptions due to the ongoing tensions in the Middle East, and reducing the war risk premium.

• Brent April 2026 futures were trading at $68.26 per barrel on February 9, 2026, up from $66.08/bbl for front-month futures on Feb. 2 (ICE Futures Europe).
• Dubai crude futures (Platts) for March 2026 settled at $67.08/bbl on Feb. 6, 2026, down from $67.89/bbl for front-month futures on Jan. 30 (CME).

Base Oils
Spot base oil prices in Asia were steady to soft, with activity described as subdued 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 holding at $860/t-$900/t
Bright stock prices stable at $1,260-$1,300/t 
Group II 150N held at $830/t-$870/t
500N down by $10/t at $900/t-$940/t

FOB Asia
Group I SN150 was softer by $10/t at $660/t-$700/t
SN500 was unchanged at $680/t-$720/t, following several weeks of downward adjustments
Bright stock prices were down by $10/t at $1,080/t-$1,120/t

Group II 150N stable at $720/t-$760/t
500N held 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.