Weekly Asia Base Oil Price Report

Spot base oil prices followed suit, climbing to nosebleed highs during the week. The conflict has forced most producers to suspend spot offers as governments have imposed restrictions on energy exports to ensure that domestic fuel needs are met. The few suppliers that were able to offer spot cargoes have increased prices significantly.

Freight rates have climbed on the back of tight vessel space, as several tankers remain stuck in the Persian Gulf, and surging insurance and bunker fuel prices. Bunker costs in Singapore have increased approximately 60% since the war began on February 28, and in Houston, prices for VLSFO were up 39%, according to Clarksons, a provider of shipping services.

Iran and its allied militias continued to launch drones and missiles across the Middle East in retaliation to the U.S. and Israel attacks, targeting energy infrastructure in Saudi Arabia, the United Arab Emirates, Qatar, Kuwait, Bahrain, and Iraq, and putting several facilities out of commission. These strikes exacerbated the dire oil supply situation, as not only were crude tankers unable to transit the Strait of Hormuz, which has been effectively closed by Iran, immobilizing crude shipments out of the Persian Gulf, but crude oil output has also been shut down.

Several Middle East base oil producers have been forced to halt production and declare force majeure. The Shell/Qatar Petroleum Pearl gas-to-liquids (GTL) plant and the Bapco plant in Bahrain were both heard to have suffered production disruptions following drone attacks on the associated natural gas and oil refineries, which supply feedstocks to the base oil plants.

According to reports, Shell has temporarily halted production at its Pearl GTL facility in Qatar after sustaining damage during aerial attacks on March 19. The unit experienced a fire at one of its processing trains and production has been suspended as the company assesses damages. Qatar Energy’s LNG production had already been offline since early March following Iranian strikes, curtailing feedstock supply to the Pearl GTL facility. Even before the latest attack, it was reported that the Pearl GTL unit had been operating below capacity due to export constraints linked to regional disruptions.

Abu Dhabi state oil giant Adnoc has shut part of its Ruwais refinery complex in response to ‌a fire that broke out on March 10, following a drone strike. Sources indicated that while the Ruwais West refinery was shut down for inspection and safety reasons, other operations within the massive complex might be continuing at reduced capacity. According to sources, the Ruwais East unit was running and was expected to continue production, including that of base oils, but this could not be confirmed with the producer directly. The Ruwais complex houses a 600,000 metric-tons-per-year Group II and Group III plant.

Iran also attacked Iraqi oil facilities this week, further crippling refining operations in the country. In Saudi Arabia, a drone struck the SAMREF oil refinery in Yanbu, while Saudi forces intercepted a ballistic missile targeting the Port of Yanbu–one of the few ports where tankers are still able to lift cargoes as it is located on the Red Sea.

Energy infrastructure in the Gulf remained highly exposed to further attacks, and supply disruptions could have long-lasting consequences for global supply chains. Downstream, lubricant manufacturers also expressed concern at potential manufacturing disruptions due to feedstock supply shortages. They were starting to implement price mark-ups to offset the increase in production costs, driven by the steep base oil price hikes as well as higher additive prices, logistics and freight rates.

Group I and Group II
Most Asian refiners rely on Middle East crude to run their refining operations. The sharp curtailment in supplies due to the war in Iran and the closing of the Strait of Hormuz have forced many to look for alternate sources of crude, and a few have been able to secure U.S. and African oil. While the U.S. has temporarily halted sanctions on Russian crude exports for one month, many refiners—with the exception perhaps of Indian producers–were still hesitant to purchase Russian crude.

The ongoing market uncertainties and the threat of feedstock supply shortages have prompted a large number of base oil producers in Asia to reduce base oil output, suspend spot bulk offers and restrict term allocations. Governments in several nations are encouraging refiners to prioritize fuel production, leading to reduced base oil runs. The increase in fuel prices also shifted refining economics towards middle distillates output. Spot transactions within the API Group I segment were almost impossible to bring to fruition, as a majority of suppliers have withdrawn spot offers while they tried to fulfill term commitments to the best of their ability.

While base oil consumers were aware of the uncertainties and factors driving base oil prices up, many were unable to purchase product at the current price levels as they were unlikely to offset the increases by marking up finished product prices given ongoing competition among manufacturers. Some lubricant suppliers were heard to have made overtures towards increasing lubricant prices, but some were still reluctant as they were worried about losing market share.

Base oil buyers continued to run blending operations with existing inventories, but it was unclear how long stocks would last. Group I and Group II prices have been notionally adjusted up to reflect the sharp jump in crude oil and feedstock prices and the very limited spot availability. A very small number of buyers who seemed desperate to secure product have accepted steeper offers, but many decided to wait and risk having to cut production.

In the Group I segment, it was heard that Indonesian and Thai suppliers had withdrawn spot offers but continued to meet contract commitments, albeit with some restrictions on volumes. In Indonesia, Pertamina has scheduled a turnaround at its Group I unit in Cilacap starting in April 2026. Southeast Asia continues to be the main source of Group I base oil cargoes for Asian lubricant operations, and the absence of fresh offers drove prices up significantly.

In Group II, the steady rise in base oil prices was reflected in the sole Taiwanese Group II producer’s adjustment of domestic list prices for a fourth time this month. Formosa Petrochemical was heard to have increased prices of its 70N and 150N grades by New Taiwan Dollars (NT$) 5.09/liter, and the 500N by NT$5.35/l, with an effective date of March 21. (NT$1.00  = US$0.03)

A South Korean producer, Hyundai Oilbank/Shell, had already restricted spot offers two weeks ago as the producer was heard to be preparing inventories for an upcoming turnaround starting at the end of March, and it had also lowered run rates as it had suffered an unexpected production setback at its refinery last month.

In China, buyers were focusing on obtaining domestic Group I and Group II supplies whenever possible, although some did not have a choice but to accept higher import prices because of formulation specifications. Group I and Group II import prices have jumped on the back of minimal supplies and prospects of shortages in the coming months, with delivered prices heard to have jumped by $100 per metric ton to $150/t week on week. Prospects of limited or non-existent imports have driven domestic prices up as well, as buyers turn to local producers for base oil cargoes, but domestic producers have raised prices as well given steeper crude oil and competing fuel prices.

Domestic producers in India have cut back production rates due to a tightening of feedstocks and the need to produce more fuels in detriment to base oils output. Contract base oil volumes have also been restricted because of the curtailed production and reduced supplies. However, in contrast to most Asian producers, Indian refiners have the advantage of being able to use Russian crude oil to run their refineries as the U.S. has granted a temporary suspension of sanctions to help ease the Middle East crude oil supply shortages.

Several Asian base oil shipments that had been earmarked for Middle East receivers were diverted to India given the closure of the Strait of Hormuz, so the country has benefitted from additional supplies. However, the general market tightness, along with the steeper feedstock costs, have impacted imports nonetheless, with values rising as a result. Group I prices have climbed by $100 per metric ton week on week on a CFR India basis, while Group II prices reportedly jumped by $150/t—price increases that consumers said would be difficult to absorb. Buyers were resisting the lofty levels and trading was generally thin.

Most Indian blenders were heard to be holding inventories that would allow them to meet blending requirements for one or two months, but replenishment cargoes may be very difficult to obtain. Finished product manufacturers have also started to implement increases to counteract the rising base oil, additive and transportation costs, but implementation will not be easy as consumers were expected to resist higher pricing.

Group III
The Group III segment seems to be set apart from the other two categories as current market dynamics have been directly affected by the attacks on Middle East refineries, which have led to Group III base oil production curtailments and shutdowns. The Middle East is still one of the main sources of Group III base oils, with cargoes routinely moving not only within the region and Asia, but to the U.S. and Europe as well. The strike on the Adnoc plant, combined with attacks on refineries in Bahrain (Bapco) and Qatar (Shell’s Pearl GTL), have taken roughly 20% of the world’s Group III base oil supply offline. Furthermore, the closure of the Strait of Hormuz along with the absence of vessels – since many are stranded in the Persian Gulf and Gulf of Oman – were posing significant logistics and transportation challenges.

Asian Group III producers mostly rely on Middle East crude oil to run their refineries, and reduced oil production in the region, coupled with the closure of the Strait, have resulted in more limited volumes of crude oil moving to Asia.

A few base oil cargoes from the UAE and Qatar that were on the water faced difficulties in reaching their destinations as vessels were unable to leave the Persian Gulf through the Strait of Hormuz. This has driven import prices up in places like China, since supplies from other origins such as South Korea have tightened as well, and it was uncertain when Middle East shipments would return to normal.

Import prices for Group III grades on a delivered basis were understood to have climbed by at least $100/t in China from the previous week. This also offered support to higher domestic Group III prices, with local producers lifting their offers as feedstock costs have also increased significantly.

In India, Group III import indications have moved up by $100 per ton on a CFR India basis, reflecting steeper feedstock costs and limited availability. The Indian market does not draw as many volumes of Group III base oils as other markets, but the tightening global supplies of Group III grades were expected to continue exerting pressure on import prices. Domestic capacity is still comparatively limited and not sufficient to meet local requirements.

Group III spot prices on an FOB Asia basis have been notionally adjusted up to show the current price trend in Asia, but with market conditions changing almost daily, values could lose validity very quickly.

Shipping

Details of recent shipments emerged, with one involving 4,250-metric-ton base oils cargo that loaded in Port Klang, Malaysia, to Santos, Brazil, on the Ginga Copper March 6-8, and a second lot of 5,000 tons that was shipped from Malacca, Malaysia, to Mumbai, India, on the Sky Winner March 7-9.

• A 7,000-ton cargo was expected to be shipped from the U.S. Gulf to West Coast India in the second half of March.
• A 4,000 to 5,000-ton cargo was quoted for shipment from Daesan/Pyongtaek, South Korea, to Hamriyah, United Arab Emirates, in the first half of April.
• A 2,000-ton lot was discussed for shipment from Sri Racha, Thailand, to India in the first half of April.
• A 4,000-ton lot was expected to be shipped from Mailiao, Taiwan, to West Coast India/Persian Gulf in late March.
• A 1,100-ton cargo was discussed for shipment from Onsan, South Korea, to Bangkok, Thailand, between March 29-April 10.
• A 1,600-ton cargo was on the table for shipment from Onsan to Taichung, Taiwan, between March 24-31.

Production

Production at the base oil units of BAPCO in Bahrain, Shell/Qatar Petroleum Pearl GTL in Qatar and ADNOC in Ruwais, Abu Dhabi, appeared to have been impacted by Iranian strikes on upstream facilities.

Qatar Energy halted production of liquid natural gas (LNG) and other products following drone attacks on its facilities in Ras Laffan and Mesaieed on March 3. The facility will not be able to return to normal production for at least a month, and has declared force majeure, according to the company’s website. While it could not be ascertained whether the Shell/Qatar Petroleum Pearl gas-to-liquids base oil unit in Ras Laffan had suffered any damages, base oil production was heard to be shut down as the unit utilizes natural gas from the refinery to produce Group III base oils. The plant has a nameplate capacity of 1,372,000 metric tons of Group II/Group III base oils.

Fire erupted at BAPCO’s refinery in Maameer, Bahrain, on March 5 following an Iranian attack. The country’s Ministry of Interior reported that the fire had been brought under control without providing further details about potential damages. BAPCO operates a 400,000-metric tons per year Group III base oil facility in Sitra, within the BAPCO refinery complex. Sources familiar with the plant’s operations said that Group III production was unaffected by the fire, but some reports indicated that production had stopped. An official report was not available by the publishing deadline.

The latest plant turnaround information for 2026 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

• Pertamina will be embarking on a one-month turnaround at its Group I plant in Cilacap, Indonesia, in April.
• Eneos’ plant in Kainan, Japan, suffered an unplanned shutdown in February 2026. The company’s Mizushima A plant underwent maintenance from October to November 2025.
• Two Eneos Group I plants were permanently closed in recent years.
• Luberef scheduled a 30-day turnaround at its Group I/Group II plant in Yanbu, Saudi Arabia, in August 2026. The company had previously completed maintenance at the unit from mid-November until December 2025. The plant underwent an expansion in 2017. 
• 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.
• 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. The plan had run at reduced rates for several days in February due to a technical problem.
• GS Caltex had a partial shutdown at its Group II plant in Yeosu, South Korea, in mid-March.
• CNOOC has scheduled a turnaround at its Taizhou, China, plant in the second quarter of 2026.
• State-owned Sinopec Jingmen Co. plans to have a turnaround at its plant in Jingmen City, China, in November. It is the largest production plant for base oils and waxes in Central-South China.
• 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.
• ExxonMobil 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.
• 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

• Pertamina-SK will be completing a 40-day turnaround at its plant in Dumai, Indonesia, in May 2026.
• Petronas plans to shut down its 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 2025 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 climbed on Sunday as president Trump issued an ultimatum to Iran that the U.S. would attack Iranian power plants if the country failed to open the Strait of Hormuz, keeping markets on edge as the conflict seemed to escalate.

• Brent May 2026 futures were trading at $113.13/bbl on March 23, 2026, up from $104.79/bbl for front-month futures on March 16 (ICE Futures Europe).
• Dubai crude futures (Platts) for April 2026 settled at $112.83/bbl on March 20, 2026, up from $103.87/bbl for front-month futures on March 13 (CME).

Base Oils
Spot base oil prices in Asia surged due to sharply higher feedstock and crude oil prices and tightening supplies. Prices have been notionally adjusted up to reflect current market conditions and sentiment, but trading remained muted.

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 assessed higher by $300 at $1,220/t-$1,260/t
SN500 up by $300/t at $1,280/t-$1,320/t
Bright stock prices assessed up by $200/t to $1,600-$1,640/t

Group II 150N was adjusted up by $320/t to $1,300/t-$1,340/t
500N was assessed up by $300/t at $1,320/t-$1,370/t, all ex-tank Singapore.

FOB Asia

Group I SN150 jumped by $250/t to $1,110/t-$1,150/t
SN500 up by $220/t to $1,100/t-$1,140t
Bright stock prices assessed higher by $230/t at $1,500/t-$1,540/t

Group II 150N assessments increased by $250/t to $1,170/t-$1,210/t
500N higher by $240/t at $1,180/t-$1,220/t

Group III grades were also assessed up, with 4 cSt higher by $100/t at $1,290/t-$1,330/t
6 cSt was up by $120/t at $1,270/t-$1,310/t
8 cSt was assessed up by $150/t at $1,140/t-$1,180/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.