Base oil prices were generally stable-to-firm this week on muted activity. Spot prices edged up for a number of cuts during the week, driven not so much by the higher crude prices, but by a tighter supply and demand ratio. Discussions for late July and August shipments were anticipated to pick up the pace during the week, barring more geopolitical developments that could further upset an already fluid situation.

Group I

Tight conditions seen in the API Group I segment over the last several months prevailed, supporting firm prices. An upcoming turnaround in Thailand was crimping spot availability as the producer was preparing inventories to cover contract commitments during the outage and was not offering any spot volumes. Ongoing turnarounds at other locations in Southeast Asia, Japan and the Middle East were also curbing availability.

Bright stock was still in high demand, but prices appeared to have stabilized as buyers resisted the steeper offers that have emerged recently. An offer from a Indonesian supplier had initially attracted limited buying interest, but the parcel may have been sold to China.

In China, curbed manufacturing output and reduced exports due to China’s trade war with the U.S. have resulted in more subdued demand for Group I grades. There was also a sense of reduced urgency to acquire import cargoes as additional Group I capacity will be brought on stream in Asia this month or in early July following an expansion at PetroChina’s Fushun plant.

Ample availability of domestic Group II grades and price competition among suppliers allowed buyers to replace Group I grades with Group II cuts, reducing the need to import additional Group I base oils, although the heavy grades are chronically in short supply in China.

In India, the start of the monsoon season continued to temper activity in some segments because the heavy downpours cause disruptions in transportation, logistics and agricultural activities. Many buyers have built stocks ahead of these potential disruptions and were not interested in procuring additional cargoes until the existing ones were used up.

Requirements from the marine segment in Asia have also declined on reduced shipping activity due to the ongoing tariff upheaval, as some Asian products were seeing reduced demand overseas. At the same time, some participants were front-loading material ahead of the end of the tariff suspension period on July 9, causing increased shipping inquiries. Freight rates had been expected to increase on steeper insurance costs due to the Israel-Iran conflict, but these concerns were assuaged by the ceasefire agreed by the two countries.

Group II

Spot prices for Group II cuts inched up this week as South Korean suppliers have increased their offer levels due to limited supplies, while the sole Taiwanese producer has temporarily suspended spot offers for export, as well as for the light grade within the domestic market.

Recent and ongoing turnarounds and reduced output levels were heard to have curtailed availability of Group II grades, particularly curbing supplies of 150N. This has driven South Korean refiners to increase fresh offers by up to U.S.$60 per metric ton compared with last month’s numbers, with the light grade 150N seeing the steepest hikes as it appeared to be even tighter than the heavy grade. A South Korean producer requested 150N to co-load with 600N barrels. A second South Korean supplier offered only limited Group II supplies for end-July/August loading, as it appeared to be short on 150N.

Buyers seemed reluctant to accept the lofty offers because crude oil prices have come down from the high levels seen in the previous two weeks, and they were worried base oil prices would soften too. Traders said that some buyers had retreated after expressing interest in securing Group II spot cargoes because of all the uncertainties and steeper prices than last month.

In China, buying interest for imports has declined as domestic suppliers have reduced prices in a bid to find buyers and avoid oversupplied conditions. With Group II capacity in China increasing significantly over the last decade, availability of Group II cuts has grown, meeting a large portion of domestic demand, but also causing several plants to run at reduced rates for an extended period.

In India, tight availability of the light Group II grades has also driven prices up. Group II CFR India offers for the 70N and the 150N base oils have edged up by $5-10/ton, but buyers were understood to be resisting the higher price levels and preferred to hold off on securing fresh shipments.

There were also expectations that Group II spot supply would start to lengthen in the U.S. as producers resume production, following turnarounds, while demand starts to ebb. At least one producer was heard to have some availability of the heavy-viscosity grade, but it could not be confirmed whether any export transactions to India had been finalized.

Group III

Group III base oil prices were steady, with supply and demand conditions described as balanced to slightly tight in the region. Some relief to the tight conditions observed in this segment was likely to come from the resumption of spot offers by a Middle East supplier this week. However, while demand for Group III grades has not fallen significantly, it was still deemed on the sluggish side given uncertainties related to the automotive industry.

In China, Group III prices seemed to have stabilized, despite recent efforts by local producers to compete with imported products by offering lower pricing. The prospect of steeper crude oil values after the price spikes observed in the previous two weeks following the Israel-Iran war has prompted domestic refiners, who largely depend on crude imports, to maintain Group III prices.

Group III prices were exposed to upward pressure in India because of limited availability given that regional suppliers have opted for moving cargoes to markets offering higher margins. A slowdown in automotive demand during the monsoon season also dampened base oil consumption to a certain extent. At the same time, there has been buying interest for spot cargoes by buyers who had delayed purchases for as long as possible, and were now in need to replenish stocks. These buyers appeared willing to accept marginally higher offers, with CFR India prices moving up by $5/ton week on week.

Shipping

Discussions in base oil shipping circles remained thin this week. A 2,600-ton cargo was mentioned for possible shipment from Onsan, South Korea, to Tuas, Singapore, in mid-July. A 1,000-ton parcel was expected to be shipped from Yeosu, South Korea, to Keelung, Taiwan, in late June. About 3,000-4,000 tons were discussed for shipment from Taiwan to West Coast India and/or the Persian Gulf at the end of July. A 2,000-ton cargo was on the table for shipment from Cilacap, Indonesia, to Nantong, China, in early July.

Production

The global base oil supply and demand balance is likely to ease as a number of turnarounds will be completed and plants are expected to be restarted, although ongoing shutdowns at a few units, together with permanent closures over the last few years may continue to crimp supplies in some base oil segments.

In the Group I category, Indian refiner Hindustan Petroleum Corp. Ltd. (HPCL) was expected to restart its Group I unit in late April/early May after a partial turnaround that began in late Feb. HPCL was also heard to have completed a 45-day turnaround at its Group II trains in May, but this was not confirmed by the producer directly.

Also in India, Chennai Petroleum Corp. Ltd. (CPCL) had a scheduled one-week turnaround at its Group I plant in Chennai in April.

In China, PetroChina’s Dalian Petrochemical refinery in Liaoning province, which includes a Group I plant, started a permanent shutdown process in 2023, with the base oils unit shutting down in late 2024. The refinery closure will be completed in June/July 2025 for its relocation. The company plans to clear all product inventories by the end of August, according to reports.

At the same time, there had been expectations that China National Petroleum Corporation (CNPC)/PetroChina’s Fushun plant, also located in Liaoning, would be producing additional Group I base oils that would likely help offset the Dalian closure, market sources said. Fushun has not yet confirmed the Group I volume it will bring online, but earlier estimates had put the Group I bright stock expansion at 60,000 metric tons per year. There were unconfirmed reports that Fushun had started producing additional Group I in late April/early May this year.

Also in China, Sinopec completed a two-month turnaround at its Gaoqiao Group I and Group II plant that started in March.

In Japan, tight Group I conditions persisted after the extended shutdown of an Idemitsu Group I unit in Chiba following a fire at the lubricating oil production facility in mid-2024, but the plant was heard to have been restarted at the end of the year. This plant has been scheduled for a turnaround from May until July. A Cosmo Oil unit in Yokkaichi, Japan, underwent an extended maintenance program which began in September 2024 and was completed at end of the year as well.

Eneos also plans to complete maintenance at its Kainan and Mizushima plants in Japan this year. The Kainan plant will be shut down in May until June. The Mizushima B plant was expected to be shut down in Feb. for an extended turnaround that would last until May. The plant was expected to have been restarted. Later in the year, the Mizushima A unit was scheduled for a one-month turnaround starting in October. All of these shutdowns come on the heels of the permanent closure of two Eneos Group I plants over the last three years.

Another outage that was expected to have some impact on Group I supplies was the ten-day turnaround at the IRPC Group I plant in Thailand, which was completed in May. The producer was heard to have built inventories to cover term commitments during the outage and has begun to offer spot supplies following the restart, according to reports.

Further down the road, it was heard that Thai Lube Base Oil PLC may be shutting down a Group I lube base oil production unit for 45 days, from mid-July until late August.

Earlier this year, the Pertamina Group I plant in Cilacap, Indonesia, underwent maintenance work from mid-January until late February/early March. This had constrained the volumes available for export from the facility in the first quarter.

Within the Group II segment, a number of planned turnarounds and an unplanned run cut may also result in tight supply of certain grades.

South Korean producer GS Caltex was heard to have restarted operations following a 45-day turnaround at its Group II/Group III unit in Yeosu in late Feb. The producer had built inventories to cover term commitments during the outage, but spot supplies remained limited. The plant was heard to have completed the maintenance program in May.

Also in South Korea, Hyundai Oilbank Shell Base Oil had significantly reduced operating rates at its Group II base oil plant in Daesan since March due to a refinery outage which had limited the plant’s feedstock supply. Rates were heard to have been increased in late May.

In China, an unplanned outage at the CNOOC Group II unit in Huizhou impacted availability in the domestic market over the previous three months.

As mentioned above, Sinopec was understood to have scheduled a two-month turnaround at its Gaoqiao Group I and Group II plant that was expected to have been completed in May.

Sinopec was also expected to have shut down its Jinan Group II unit for one month in April.

In India, it was heard that Bharat Petroleum Corp. Ltd. (BPCL) completed maintenance work at its Group II facilities in Mumbai in March. The maintenance program started in late Feb.

Also in India, HPCL was heard to be planning a 45-day turnaround at its Group II trains in May, but this was not confirmed by the producer directly.

In the Middle East, Luberef reportedly shut down its Group I and Group II units in Yanbu, Saudi Arabia, for a two-week maintenance program and catalyst change in the second quarter, limiting spot sales from the producer ahead and after the turnaround.

In the U.S., Chevron restarted its Group II plant in Pascagoula, Mississippi, following a four-week turnaround and catalyst change in late May.There was no direct confirmation about the turnaround from the producer.

Also in the U.S., Motiva restarted its plant earlier this month and was building inventories, following a three-week turnaround at its Port Arthur, Texas, hydrocracker that began in late May.

In the Group III segment, SK Enmove was completing a partial turnaround at its Ulsan, South Korea, Group III plant for two months since early May, but the shutdown was not expected to have a significant impact on supplies—especially of Group II grades–because of uninterrupted production on the facility’s other trains, company sources said. The turnaround was expected to be completed at the end of June.

In the Middle East, ADNOC shut down its Group II/Group III plant in Ruwais, Abu Dhabi, United Arab Emirates, for two to three weeks in early May and was heard to have restarted operations.

Bapco was heard to have started a two-month turnaround and catalyst change at its Group III facilities in Sitra, Bahrain, in May, but details could not be confirmed.

Prices

Crude oil futures fell at the start of the week due to an anticipated increase in OPEC+ supply and an easing of concerns after the Israel-Iran ceasefire, which also lowered the war risk premium on crude shipments and freight rates.

The global economic outlook remains cautious, with manufacturing data from China showing limited growth. According to the latest Purchasing Managers Index figures from Beijing’s statistics bureau, manufacturing activity in China rose slightly to 49.7 this month from 49.5 in May, but remained below the 50 threshold that marks the difference between growth and contraction. This was the third consecutive month with sub-50 PMI readings, OilPrice.com reported.

On June 30, Brent August 2025 futures were trading at $67.55 per barrel on the London-based ICE Futures Europe exchange, from $78.22/bbl on June 23.

Dubai front month crude oil (Platts) financial futures for July 2025 settled at $67.31/bbl on the CME on June 27, compared to $75.16/bbl for front-month futures on June 20.

Base oil spot prices were generally stable-to-firm as buyers and sellers were somewhat cautious about concluding business, but some cuts have tightened, leading to higher buying and selling indications. The base oil 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 prices were steady-to-firm. The Group I solvent neutral 150 grade was assessed higher by $10/t at $800/t-$840/t, and the SN500 also inched up by $10/t to $1,060/t-$1,100/t. Bright stock prices were steady at $1,380/t-$1,420/t, all ex-tank Singapore.

Prices for the Group II 150 neutral edged up by $20/t to $850/t-$890/t, and the 500N was also up by $20/t at $1,100/t-$1,140/t, ex-tank Singapore.

On an FOB Asia basis, Group I SN150 was assessed at $670/t-$710/t, and the SN500 was steady at $920/t-$960/t. Bright stock prices were hovering at $1,260/t-$1,300/t FOB Asia.

The Group II 150N was higher by $10/t at $690/t-$730/t FOB Asia, and the 500N was assessed steady at $940/t-$980/t FOB Asia.

In the Group III segment, the 4 cSt grade was holding at $1,120/t-$1,160/t, and the 6 cSt was heard at $1,100/t-$1,140/t. The 8 cSt was unchanged week on week at $970/t-$1,010/t, all FOB Asia.

Gabriela Wheeler can be reached directly at gabriela@LubesnGreases.com

Lubes’n’Greases shall not be liable for commercial decisions based on the contents of this report.