Asia to India Group I base oil arbitrage remains shut

Market: Oil products
03/09/25

Exports of Group I base oils from Asia to India remain a challenge, despite a recent rise in supply availability in Asia and a fall in Group I fob export prices.

The completion of Group I plant maintenance in Thailand in August has boosted supply availability and put downward pressure on Asian export prices. But the arbitrage is not sufficiently wide to cover associated freight, insurance, and traders' margins, particularly among ports affected from logistical constraints that have limited vessel types.

Group I SN 150 cfr India prices were at a premium of $40/t to Asian Group I SN 150 fob export values in the week ending 29 August. The premium is at its highest level since April but lower than its five-year average of $81/t. Meanwhile, Group I SN 500 cfr India prices were at a premium of $65/t to Asian fob export prices in the week ending 29 August. The premium is at its highest level since November 2023 and above its five-year average of $37/t.

Supply availability of Group I SN 150 remains more limited than grades with a higher viscosity.

The arbitrage for bright stock is widening. Group I bright stock cfr India prices are at a premium of $80/t to fob Asian values in the week ending 29 August — its highest level since February. It is also above its five-year average of $75/t.

Group I spot trade from Asia to India has been limited in recent years because of a structural shortage of Group I, after permanent plant closures. Maintenances at multiple Group I plants in Japan, China, Thailand and Indonesia have further slashed spot supply availability and supported prices for most of 2025.

Blenders in India typically rely on domestic supplies and term volumes from producers in Asia and the Mideast Gulf. But planned and unplanned maintenances, as well as geopolitical tensions, have curbed Group I availability from the Mideast Gulf this year.

Spot demand for Group I base oils remains firm in India. But competitive domestic and term prices have prompted buyers to hold back bids. Ample supply and competitively priced Group II N500 are also limiting bids for Group I SN 500.

The completion of most plant maintenances is expected to boost spot supply availability. Supply is also increasingly from US Group I producers, with more participants seeking alternative outlets like India.

By Chng Li Li

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Asia to India Group I base oil arbitrage remains shut

Related news posts

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