Weekly Asia Base Oil Price Report

Some governments have released strategic emergency crude inventories to ensure the population’s access to heating oil, gasoline and diesel. South Korea announced that it was launching its first strategic oil swap program, lending government crude reserves to refiners in exchange for future deliveries of alternative supplies, The Korea Herald reported last week. Under the program, the government will provide Middle Eastern crude from its reserves to refiners that have secured cargoes from other regions but were dealing with shipment delays. The borrowed volumes must be returned once those cargoes arrive. South Korean refineries were largely designed to run on Middle East crude, which makes it difficult for them to switch to crude from other regions. By participating in this program, the four domestic refiners will be able to maintain stable production utilizing Middle East crude. Refiners were heard to be sourcing replacement crude from other regions, including Africa, Central Asia, the Americas and Oceania. According to the article, the program will initially run through April and May, with a possible extension depending on market conditions.

A vast majority of Asian base oil producers have suspended spot offers and were focusing on fulfilling contractual obligations, although some have had to restrict term volumes as well given oil supply constraints. Some spot availability emerged in Singapore, but prices have surged and many blenders were not able to afford the steeper prices, despite the fact that suppliers have increased lubricant and finished products pricing to offset some of the upstream costs. A number of lubricant manufacturers had no choice but to trim output, hoping for the conflict to end and for the base oil supply situation to return to normal in the coming weeks.

Meanwhile, crude oil prices jumped to levels above $110 per barrel as fighting continued across the Gulf, including strikes on energy infrastructure. Futures jumped over the weekend as Trump warned Iran via a social media post that the country should open the Strait of Hormuz by Tuesday or face “hell,” threatening to bomb the country’s power plants and bridges.

The Strait of Hormuz remained largely closed to traffic, even though Iran had said that it would allow authorized tankers through. A letter sent by Iran to members of the International Maritime Organization clarified that “non-hostile” ships could pass through the Strait–meaning any ship that has no ties to the U.S. or Israel–but most shipping companies have suspended transit in the Gulf amid fears of attacks, while insurance companies have also discontinued coverage. Officials warned that restoring normal shipping through the Strait could take weeks or even months, with long-term consequences expected for global supply chains.

Group I and Group II
Many refiners in Asia saw themselves forced to curtail base oil output as they prioritized the production of fuels, leading to a dearth in base oil spot availability. Those who have limited supplies to offer have increased prices substantially, but only a few blenders are able to absorb the hikes, despite the implementation of lubricant increases. Not only have base oil prices increased substantially, but the cost of additives, packaging and transportation have surged too.

Traders were mostly able to locate offers from other traders that have storage tanks as direct offers from producers were largely absent. But even if traders managed to locate product and buyers were willing to pay the sky-high offer levels, there were complications related to logistics, as few vessels were available on certain routes. Participants commented that they had not been able to load products that were sold two or three weeks ago.

Some suppliers continued to evaluate their supply positions for April and prioritized term commitments, with a few expected to cut back quantities shipped to customers. Some may not be able to supply any base oils at all if the crude supply constrains persist for several more weeks.

Base oil availability in Asia was expected to remain limited, given that supplies from most Middle Eastern origins were unable to reach Asia because of the closure of the Strait of Hormuz amid plant shutdowns in the Middle East following Iranian drone and missile attacks. As a result, spot base oil prices surged again this week, with some grades showing three-digit markups.

One of the main sources of Group I grades is Southeast Asia, but Thai and Indonesian producers have withdrawn spot offers and were doing their utmost to meet contractual obligations, although they were dealing with oil supply constraints and refinery run cuts. It was heard that availability in Singapore was more plentiful, but cargoes were expected to have been snatched up quickly and some buyers were unable to pay the higher prices that these parcels have fetched.

In Indonesia, Pertamina had originally scheduled a turnaround at its Group I unit in Cilacap starting in April 2026, but it could not be confirmed whether the producer has postponed the shutdown to continue supplying the domestic market given the current global supply curtailments.

At the same time, it was heard that Petronas had postponed a turnaround at its Group II/III Melaka plant in Malaysia from June to August 2026.

A scheduled turnaround at a South Korean Group II base oils plant may exacerbate the snug supply conditions for Group II grades. South Korean producer Hyundai Oilbank/Shell was expected to start a planned maintenance program at the end of March that was anticipated to last until early May. The key Group II supplier exports significant amounts to countries such as China and India and had already restricted spot offers before the start of the conflict as it was preparing inventories ahead of its turnaround. The producer had also trimmed run rates as it had suffered an unexpected production setback at its refinery in February.

In Taiwan, the steady rise in oil prices drove the sole Taiwanese Group II producer to adjust domestic list prices for a sixth time since the start of the conflict. Formosa Petrochemical was heard to have increased prices of its 70N and 150N grades by New Taiwan Dollars (NT$) 3.36/liter, and the 500N by NT$2.86/l, with an effective date of April 3. (NT$1.00  = US$0.03). The producer was heard to be running its base oil plant at reduced rates due to a 40-day turnaround at the crude distillation unit (CDU#2) of its associated refinery that started in mid-March.

In China, domestic producers have increased prices as supplies have tightened and imports have become very challenging to locate, particularly those originating in the Middle East, but supplies from Southeast Asia were limited as well, with prices surging over the week.

A couple of local producers in China were looking at the possibility of exporting Group I grades as international prices have climbed and offered better margins than domestic transactions, but buyers were somewhat reluctant to commit to shipments that may take a while to arrive, depending on the region where they were located, and freight rates have surged as well.

Demand for light grades remained strong and availability has tightened, but heavy-viscosity grades were more readily available, although China has a deficit of the heavy grades, particularly bright stock.

Group II import availability has also tightened because regional producers in South Korea and other nations have cut run rates and were focusing on fulfilling domestic requirements. There were reports of Chinese importers considering re-exports of Group II grades given attractive pricing in other markets as values have climbed considerably.

A domestic Group II plant that had been mothballed for several years was heard to have been restarted in China because the current supply gaps offered fresh opportunities.

In India, import prices have surged due to the curtailment of crude oil and base oil shipments from the Middle East and the reduced output at regional refineries as producers give precedence to fuel production.

Import prices for the Group I cuts were heard to have jumped by $100-150 per metric ton on a CFR India basis week-on-week, with bright stock seeing the steepest hikes given tighter supplies amid ongoing buying interest.

Group II import prices have also increased significantly, with numbers rising by $150-180/ton CFR India.

Many blenders are unable to absorb the increasing production costs and have opted for trimming production rates. Given the current supply limitations, participants were concerned that economic activities in the industrial and automotive segments would be negatively impacted by lubricant shortages in the coming weeks.

Domestic Indian refiners have been able to supplement oil purchases with Russian crude oil given a temporary suspension of U.S. sanctions, but local base oil production is not sufficient to meet domestic consumption levels, and Indian refiners are also required to prioritize fuels output versus that of refined products such as base oils.

Group III
The Group III segment was feeling the impact of the conflict in the Middle East more intensely than the other base oil categories as the Middle East is one of the main sources of Group III base oils. 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 and drove prices to all-time highs.

Not only have base oil shipments from Middle East producers been cut off due to the closure of the Strait of Hormuz, but several base oil refineries have suffered Iranian drone and missile attacks, forcing producers to shut down operations. 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, Asian Group III producers rely on Middle East crude oil to run their refineries as facilities have been specifically designed to process Middle East crude oil. 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, forcing refiners to trim operating rates. Some participants said that the most difficult factor to deal with was the uncertainty as to when Middle East shipments would return to normal.

China imports substantial amounts of Group III base oils from the Middle East, despite fairly new domestic Group III capacity, and given the current shipping limitations, there were almost no cargoes reaching China. Some material made its way from South Korea and Southeast Asia, but this was also limited as producers gave priority to term obligations and to fuel output versus that of base oils.

Import prices for Group III grades on a delivered basis have surged in China, but there were almost no firm offers. 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, limited Group III supplies have driven import prices up significantly, with numbers heard to have jumped by approximately $150/ton on a CFR India basis from a week ago, although actual spot transactions were difficult to confirm. Indian domestic capacity is still comparatively limited and not sufficient to meet local requirements. Higher prices in other regions such as Europe and in the U.S. continued to attract the few available cargoes to those areas, and also impacted prices at other locations. The tightening global Group III supplies were expected to continue exerting pressure on import prices until the situation returned to pre-war patterns, which could take some time even after the conflict ends.

Shipping

Details of recent shipments emerged, with a 7,000-metric ton cargo heard to have been shipped from Singapore to Mumbai, India, on March 20-22 on the Bow Success. Discussions were thin amid a lack of readily available spot base oil cargoes.

• About 3,500 tons were discussed for loading in two shipments from Yeosu, South Korea, to Yokohama, Japan, April 1-10.
• A 1,000-ton parcel was on the table for shipment from Yeosu, South Korea, to Merak, Indonesia, April 12-20.
• A 2,000-ton lot was discussed for shipment from Sri Racha, Thailand, to India, first half April.
• A 1,100-ton cargo was discussed for shipment from Onsan, South Korea, to Bangkok, Thailand, March 29-April 10.

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 drone strikes.

Qatar Energy halted production of liquid natural gas 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 several years, and has declared force majeure on LNG shipments, according to the company’s website. Reuters reported that the force majeure on LNG shipments may last up to five years. The Shell/Qatar Petroleum Pearl gas-to-liquids base oil unit in Ras Laffan, which suffered some damage during an attack as well, was heard to be shut down. The unit utilizes natural gas from the Qatar Energy efinery to produce Group III base oils. The plant has a nameplate capacity of 1,372,000 tons of Group II/Group III base oils and its shutdown caused global availability of Group III base oils to tighten significantly.

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 t/y 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 was expected to embark on a one-month turnaround at its Group I plant in Cilacap, Indonesia, in April, but it could not be confirmed whether the shutdown will proceed as planned.
• 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.
• 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 plant 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 2025.

Group III

• Petronas has postponed a turnaround at its Group II/III Melaka plant in Malaysia from June to August 2026.
• SK-Pertamina will be completing a 40-day turnaround at its plant in Dumai, Indonesia, in May 2026.

A fire at SK-Pertamina’s refinery 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.

• 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.

Prices

Crude Oil
Crude oil futures gained on Monday as U.S. president Donald Trump issued a second ultimatum to Iran to open the Strait of Hormuz by Tuesday, or the country risked the U.S. bombing of power plants and bridges.

• Brent May 2026 futures were trading at $109.70 per barrel on April 6, down from $115.29/bbl for front-month futures on March 30 (ICE Futures Europe).
• Dubai crude futures (Platts) for May 2026 settled at $101.98/bbl on April 2, 2026, down from $109.81/bbl for front-month futures on March 27 (CME). (There was no trading on April 3 due to the Good Friday holiday).

Base Oils
Spot base oil prices in Asia surged given 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 $200/t at $1,520/t-$1,560/t
SN500 up by $150/t at $1,530/t-$1,570/t
Bright stock prices assessed up by $120/t at $1,770-$1,810/t

Group II 150N was adjusted up by $170/t to $1,570/t-$1,610/t
500N was assessed up by $140/t at $1,560/t-$1,610/t

FOB Asia
Group I SN150 jumped by $100/t to $1,410/t-$1,450/t
SN500 was up by $80/t to $1,400/t-$1,440/t
Bright stock prices were also assessed higher by $80/t at $1,680/t-$1,720/t

Group II 150N assessments increased by $100/t to $1,470/t-$1,510/t
500N was higher by $80/t at $1,460/t-$1,500/t

Group III grades also surged this week, with the 4 cSt higher by $250/t at $1,740/t-$1,780/t
6 cSt was also up by $250/t at $1,720/t-$1,760/t
8 cSt was assessed up by $220/t at $1,580/t-$1,620/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.