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Asian Group III base oil prices hit record highs

  • Market: Oil products
  • 06/04/26

Asia-Pacific Group III base oil prices rose for the fifth consecutive week, ending 3 April, to its highest level in over seven years.

Demand for the premium-grade lubricant feedstock has risen as more buyers prioritise supply security following a slowdown in exports from Asia and the Mideast Gulf. This is boosting delivered prices in export outlets to multi-year highs.

The strait of Hormuz remains effectively closed because of the ongoing US-Iran war and has continued to curb exports from the region. Repair works following extensive damage to Shell's Pearl gas-to-liquids plant in Qatar are expected to last over a year and has further squeezed supply availability.

Volumes from Asia are also sharply curtailed as refineries lower base oil output to prioritise the production of key fuels such as diesel and gasoline as feedstock supply concerns mount. Around 60pc of Asia's crude supplies in 2025 came from the Mideast Gulf, according to data from Kpler.

Asian refineries have mostly halted spot offers since early March and have also cut supplies to domestic markets and term customers.

Group III price increases have gathered pace, with Argus-assessed Asia Group III 4cst and 6cst fob export prices rising by $250/t from the previous week to $1,750/t in the week ending 3 April. Asia Group III 8cst fob export prices gained $200/t over the same period to $1,600/t.

The larger rise in Group III values combined with smaller gains in Group II prices, has boosted Group III premiums after falling to a record low in the previous week.

The premium for Argus-assessed Asia Group III 4cst to Group II N150 fob export values rebounded to $245/t in the week ending 3 April, up from $50/t a week earlier. But the Group III premium is still below its 2025 average of $369/t.

The rise in Group II prices slowed as more blenders scale back lubricant production in response to sharply higher base oil and additive prices. There remains difficulty passing costs on to customers, as finished lubricant price adjustments continue to lag.

Surging Group III demand has incentivised a 280,000 t/yr Group III refiner in southeast Asia to postpone its 45-day long maintenance to mid-August. The producer is able to maintain stable output as it relies on domestic crude supplies for base oil production.

Another Group III facility in the region, with a production capacity of 505,000 t/yr, is scheduled to undergo a 40 day maintenance shutdown in May.


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