Asia Base Oil Price Report


Trading in Asia was largely constricted by the wide implementation of lockdowns and plant shutdowns as most countries continued to fight the spread of the deadly coronavirus, and this, combined with the collapse of crude oil values, resulted in base oil price decreases.

Crude oil numbers have plummeted to their lowest levels in 18 years, shattered by a sharp drop in demand due to travel and driving restrictions and the grounding of flights put into effect in an effort to contain the pandemic.

The ongoing battle for market share between oil producers Saudi Arabia and Russia exacerbated conditions by driving crude prices even lower, with the benchmarks West Texas Intermediate and Brent shedding half of their value by the end of March.

However, crude oil futures surged by 10 percent on Thursday on hopes that Saudi Arabia and Russia would embark in negotiations to end their price war. There was also some optimism that U.S. President Donald Trump would meet with oil executives to discuss ways to help the industry recover from slumping oil prices.

On Thursday, April 2, Brent June futures were trading at $27.35 per barrel on the London-based ICE Futures Europe exchange, up from $27.04/bbl for May futures on March 26, but significantly down from levels near $50/bbl during the first week of March. 

In China, the government has started to lift strict travel restrictions and quarantines as fears of an intensified virus epidemic have started to subside.

There were reports that Chinese base oil plants that had suspended operations during the peak of the outbreak were gradually resuming production and so were many manufacturing plants. One of the base oil plants that has restarted base oil output was Sinopec‘s Group I plant in Maoming.

However, given the lockdowns and dim economic prospects for most countries in the world where the number of new infections was surging, demand for imported Chinese products was not expected to be very strong, and plants may therefore not be able to run at full rates for some time.

There was also some concern about the possibility of a second round of infections in China, which could lead to more manufacturing disruptions.

In other parts of the world, the shutdowns were just starting. The sharp drop in gasoline and fuel demand on the back of restrictions on travel, driving and public transportation was forcing many refiners to dial back refinery run rates, which could also result in reduced base oil output at some of these facilities.

In India, the second-most populous country in the world, oil refiners are slashing crude processing rates since the government imposed a lockdown to stem the spread of the coronavirus, which is expected to quash energy demand.

Indian Oil Corp. was heard to have trimmed crude processing at most of its plants by 25 to 30 percent. This might not be enough as India just embarked on a three-week lockdown, which might force refiners to reduce run rates between 40 to 50 percent below normal capacity, according to

It was also reported that the refiner presented its Middle East crude suppliers with force majeure notices due to the coronavirus pandemic and the difficulties in meeting purchase terms. Indian Oil operates a Group I and II base oils plant in Haldia.

Hindustan Petroleum, which runs a Group I, II and III base oils plant in Mumbai, is monitoring demand and adapting operating rates to the changing conditions and the declining demand.

“We are operating the Vizag refinery at 100 percent and the Mumbai refinery at around 80 percent,” Hindustan Petroleum’s chairman and managing director M.K. Surana told ETEnergyWorld in an interview.

In South Korea, crude imports plummeted to a five-month low in March, as refiners trimmed operating rates given dwindling demand due to the virus outbreak.

There were several South Korean refinery shutdowns ongoing or scheduled to start in coming months, with GS Caltex having idled its crude distillation unit in mid-March and Hyundai Oilbank expected to commence a shutdown at its fluid catalytic cracker from April 15, according to an Opis report.

Base oil plants in South Korea were heard to run at reduced rates of around 80 percent, but this could change in the coming weeks, depending on downstream demand, sources said.

While Asian producers had tried their utmost to keep base oil prices from falling, values finally succumbed to the pressure, with a major refiner based in Singapore announcing decreases for its Group II base oil exports, and spot numbers from other suppliers also undergoing downward revisions.

According to reports, the refiner lowered contract prices on its API Group II base oils destined for China by U.S. $30 per metric ton as of March 31.

Other regional suppliers acquiesced to the eroding fundamentals and also revised down their offers, although sources were skeptical that the move was going to stimulate many fresh orders given the decline in buying interest.

In Taiwan, it was heard that Formosa Petrochemical also adjusted down its domestic list prices for April shipments. The producer’s Group II 70 neutral grade was lowered by New Taiwan Dollars (NT$) 0.65 per liter, its 150N was also marked down by NT$0.65/liter and its 500N by NT$0.30/liter.

Spot prices in Asia were assessed stable-to-soft on the back of a Singapore refiner’s decreases and lower bids and offers during the week.

Ex-tank Singapore Group I prices for the solvent neutral 150 grade was assessed at $640/t-$660/t, and the SN500 at $690/t-$710/t. Bright stock was unchanged at $810/t-$830/t, all ex-tank Singapore.

The Group II 150 neutral and 500N were lowered by $30/t to $670/t-$690/t and $680/t-$700/t, respectively, ex-tank Singapore.

On an FOB Asia basis, Group I SN150 was holding at $530/t-$550/t, but the SN500 edged down by $20/t to $510/t-$530/t. Bright stock also lost some territory and was assessed down by $30/t at $660/t-$680/t, FOB Asia.

Group II 150N underwent a $30/t downward revision to $520/t-$540/t FOB Asia, while the 500N and 600N cuts were down by $20/t at $560/t-$580/t, FOB Asia.

In the Group III segment, the 4 centiStoke was lower by $20-30/t at $720-$760/t and the 6cSt edged down by $20/t to $740/t-$770/t. The 8 cSt grade was also down by $20/t at $700-720/t, FOB Asia for fully approved product.

Gabriela Wheeler can be reached directly at 

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

Historic and current base oil pricing data are available for purchase in Excel format.

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