Weekly Asia Base Oil Price Report

After a month and a half of escalating hostilities, the United States and Iran agreed to a two-week ceasefire on April 7, with negotiations to end the war taking place in Pakistan over the weekend. The news of the ceasefire was received with guarded optimism as market participants were well aware that even if the war were to end tomorrow and tankers were once again allowed through the Strait of Hormuz, the disruptions brought about by the conflict would have a lasting effect on global refining operations and crude oil prices. Similarly, base oil values were not expected to come down any time soon, as the supply system appeared largely depleted of extra availability, with producers barely able to meet contractual obligations, and suppliers having difficulties in building stocks. However, the magnitude and speed of the spot price increases did seem to be more moderate than in the previous weeks.

The peace talks between the U.S. and Iran in Islamabad over the weekend ended without an agreement, and oil prices rose nearly 10% on Monday morning, breaching the $100 per barrel mark as markets reacted to the news that U.S. president Donald Trump would impose a blockade to prevent Iranian ships from using the Strait of Hormuz, restricting global oil supplies even further. While the Strait remained closed to most vessel traffic, on Sunday, reports circulated that a dozen tankers carrying crude oil had passed through the Strait, but there were also reports that a number of empty ships had attempted a crossing and had been forced to make a U-turn.

The soaring crude and feedstock prices and the difficulties that many refiners face in sourcing crude oil to run refineries resulted in reduced base oil output at a number of facilities as many countries prioritized the production of fuels, leading to a reduction in output of other refined products such as base oils.

Spot trading has almost ground to a halt as Asian base oil producers suspended spot offers shortly after the start of the conflict and have been largely unable to supply spot volumes as they focused on fulfilling contractual obligations. A handful of suppliers and traders have offered cargoes from existing inventories, but these were starting to be depleted as well, and prices have climbed to such heights that most buyers found difficult to accept. Experts said that the real effects of the conflict will start to be felt once base oil and lubricant inventories are depleted, since most participants were expected to have stocks to meet requirements for only 30 to 60 days and the war has already lasted about 45 days.

Even though blenders have implemented price increases on lubricants and finished products to offset the climbing production costs, consumers resisted these hikes, forcing some manufacturers to scale back ouput.

Group I and Group II

Similar conditions exerted pressure on API Group I and Group II base oil prices, although Group II availability appeared to be tighter than that for Group I grades, likely because many Group I consumers have turned to Group II availabilities whenever possible as Group I supplies were difficult to come by given permanent plant closures in recent years. There were few Group I and Group II spot transactions being concluded as a majority of producers have suspended spot offers and those who were able to supply a limited amount of spot volumes were doing so at elevated price levels. With the ceasefire fueling guarded optimism about an end to the war and crude prices retreating slightly on prospects of a possible peace agreement, spot base oil price increases were more moderate than the previous week.

Since downstream increases for lubricants, greases and other finished products take some time to be transferred down the supply chain, most blenders continued to run operations on contractual volumes and were concerned that they would be unable to absorb the sky-high base oil and additive costs.

Some traders managed to transact product that other traders or producers were holding in storage tanks, but some of these deals were thwarted by logistical and transportation disruptions amid escalating freight rates. Participants said it took at least a couple of weeks to arrange shipments due to the complicated logistics.

While most suppliers continued to prioritize term commitments, a few have cut back volumes shipped to customers because of crude supply constraints. Some governments have implemented programs to ensure fuel production, and refiners are able to use strategic emergency oil supplies that will have to be returned at a later date. A few refiners were able to secure crude oil from sources other than the Middle East, but these supplies were taking longer to reach their destinations, and some refineries are designed to run on Middle East oil and do not run well on crude of other origins. Many refiners were facing run rate cuts as a result.

A key Southeast Asian Group I and Group II producer was heard to have informed customers that the company was significantly reducing term supplies in May. Some accounts had already seen reductions for March and April, but the May cuts appeared to be deeper.

Some producers are taking advantage of the current oil supply restrictions to perform maintenance at their refineries, but others have postponed turnarounds. It was heard that Petronas had delayed a turnaround at its Group II/III Melaka plant in Malaysia from June to August 2026.

In Taiwan, the sole Group II producer, Formosa Petrochemical, 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) that started in mid-March.

In South Korea, Group II producer Hyundai Oilbank-Shell was expected to stay on track with its planned maintenance program that started at the end of March and 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 feedstock supply setback at its refinery back in February.

In China, a domestic Group II plant that had been mothballed for several years was heard to have been restarted because the current supply crunch offered fresh opportunities.

Lubricant increases are taking longer to be pushed through in China, encouraging some blenders to trim production because of difficulties in covering replacement base oil volumes as prices continue to rise almost daily. Given the dip in base oil demand, some domestic producers offered competitive prices to maintain market share. However, buyers remained hesitant and preferred to wait for further developments on the geopolitical arena.

Group II imports have tightened because regional producers in South Korea and other nations have cut run rates and were focusing on fulfilling domestic and term requirements. There were reports of Chinese importers considering re-exports of Group II grades given higher prices in other markets.

Chinese state-run refineries are largely able to continue running at full rates because China had built extensive emergency stocks before the conflict, and is also able to source oil from countries such as Russia, which remains under sanctions from the U.S. and European nations. However, smaller refineries—also known as teapot refineries—were expected to cut processing rates given the rally in crude oil pricing.

The U.S. administration has temporarily suspended sanctions on Russian crude moving to India as a special dispensation to reduce oil prices and allow the country to produce essential refined products such as gasoline and diesel. Domestic Indian refiners have therefore been able to continue running refineries at high rates, but they were prioritizing the production of fuels, resulting in reduced base oil output. Even though local base oil capacity has increased in recent years, it is still not sufficient to meet domestic demand, and India still remains the world’s largest base oil importer.

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 favor fuel production.

Prices for the Group I cuts were heard to have jumped by $100-175 per metric ton on a CFR India basis week-on-week, with the light grades showing the steepest increases given tighter supplies.

Group II import prices have also increased significantly, but the hikes were smaller than the previous week, with numbers rising by $100-120/ton CFR India.

Group III

Conditions in the Group III segment appeared more extreme than in the other base oil categories because a large portion of the world’s Group III capacity is concentrated in the Middle East, and cargoes are not able to move out of the region given Iran’s closure of the Strait of Hormuz. Furthermore, several base oil refineries have suffered Iranian drone and missile attacks, forcing producers to shut down operations temporarily or for a longer period, depending on the damages incurred. The strike on the ADNOC plant in Abu Dhabi, and attacks on the BAPCO plant in Bahrain and Shell/Qatar Petroleum Pearl gas-to-liquids refinery, have taken roughly 20% of the world’s Group III base oil supply offline. While ADNOC and BAPCO were heard to be running, the Pearl GTL plant was expected to remain shut down for several months, likely until the end of the year.

The tight Group III supply conditions were exacerbated by the fact that significant Group III output also comes from Asia. Many Asian Group III producers are highly dependent 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 that 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. While the ceasefire declared last week by the U.S. and Iran offered some hope that crude oil would start to flow from the Middle East again, it will be some time before fundamentals return to pre-war patterns and prices come down.

A Southeast Asian Group III producer has been able to continue running its plant at high rates because its feedstock is domestic crude oil, but it has restricted volumes to term customers and has limited its participation in the spot market.

In China, import prices for Group III grades on a delivered basis have surged because the country is a large importer of Group III base oils from the Middle East, and supplies have been curtailed for the time being. Some Group III cargoes continued to reach China from South Korea and Southeast Asia, but they were more limited than usual as producers prioritized term obligations and fuel output, driving offer levels up. Steeper import prices supported the rise in domestic Group III prices as well. With margins being squeezed, blenders have adopted a conservative approach towards purchases and preferred to manage existing inventories carefully until the situation improves.

In India, there is fairly new Group III domestic capacity, but it is still comparatively small and not sufficient to meet local requirements. As a result, India imports most of its Group III base oil needs. Steeper prices in other regions such as Europe and in the U.S. drew volumes away from other regions, although India has an advantage in terms of proximity to some Group III producers. There were discussions about a possible shipment from Yanbu, Saudi Arabia, to West Coast India because Yanbu is on the Red Sea and vessels are able to load at that port without being impacted by the closure of the Strait of Hormuz.

Since Group III availability has tightened on a global scale, import prices have risen to lofty levels, surging by approximately $50-100/ton on a CFR India basis week-on-week, although actual spot transactions were difficult to track. Buyers were also trying to delay purchases as the current truce in the Middle East fanned hopes of a resolution to the conflict and a return to more normal supply patterns, although market repercussions were not expected to vanish overnight.

Shipping

• A 7,000-ton parcel was on the table for shipment from Onsan, South Korea, to Mumbai and Hazira, India, in mid-April.
• Approximately 18,000 tons were discussed for loading in Yanbu, Saudi Arabia, to West Coast India in late April.
• A 2,000-ton cargo was mentioned for shipment from Onsan to China in the second half of April.
• A 10,000-ton lot was discussed for shipment from Mumbai to Singapore in mid-April.
• A 1,500-ton cargo was discussed for shipment from Onsan to Taiwan in the second half of April.
• A 2,500-ton lot was also quoted for shipment from Onsan to Singapore in the second half of April.
• A 700-ton parcel was mentioned for shipment from Onsan to Vietnam in 2H April.
• About 750 tons were expected to be shipped from Onsan to Indonesia in 2H April.
• A 3,000-ton lot was quoted for shipment from Antwerp-Rotterdam-Amsterdam (ARA) to Singapore in late April or May.

Production

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 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 metric tons of Group II/Group III base oils and its shutdown caused global availability of Group III base oils to tighten significantly. The plant was expected to remain shut down for several months.

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 for damage assessments and had been restarted. An official report was not available by the publishing deadline.

In the United Arab Emirates, a suspected drone strike triggered a fire at the Ruwais Industrial Complex, leading authorities to shut down the country’s flagship refinery as a precautionary measure. The Ruwais complex houses Adnoc’s Group II and Group III base oils plant. According to sources familiar with Adnoc’s operations, the base oil unit was not damaged during the drone attack as only one train of the refinery had been affected by the strike, although it was reportedly running at reduced rates.

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 early 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 2026. 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 Oct. 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 jumped on Monday morning after peace talks between the U.S. and Iran failed to produce an agreement, and president Donald Trump said he ordered the Navy to intercept any ship in international waters that has paid Iran a toll to transit the Strait of Hormuz. Trump was also considering renewed strikes on Iran, according to The Wall Street Journal.

• Brent June 2026 futures were trading at $102.36 per barrel on April 13, down from $109.70/bbl for front-month futures on April 6 (ICE Futures Europe).
• Dubai crude futures (Platts) for May 2026 settled at $90.76/bbl on April 10, 2026, down from $101.98/bbl for front-month futures on April 2 (CME). (There was no trading on April 3 due to the Good Friday holiday).

Base Oils
Spot base oil prices in Asia continued to climb due to 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 was assessed higher by $120/t at $1,640/t-$1,680/t
SN500 was up by $110/t at $1,640/t-$1,680/t
Bright stock prices were assessed up by $100/t at $1,870-$1,910/t

Group II 150N was adjusted up by $140/t to $1,710/t-$1,750/t
500N was assessed up by $140/t at $1,700/t-$1,750/t, all ex-tank Singapore.

FOB Asia

Group I SN150 jumped by $60/t to $1,470/t-$1,510/t
SN500 was up by $60/t to $1,460/t-$1,500/t
Bright stock prices were assessed higher by $50/t at $1,730/t-$1,770/t

Group II 150N assessments increased by $100/t to $1,570/t-$1,610/t
500N was also higher by $100/t at $1,560/t-$1,600/t

Group III grades also surged this week, with the 4 cSt higher by $150/t at $1,890/t-$1,930/t
6 cSt was also up by $150/t at $1,870/t-$1,910/t
8 cSt was assessed up by $150/t at $1,730/t-$1,770/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.