The Asian base oil market continues to reflect mixed regional fundamentals, with weak demand persisting across Far East Asia while India and China are absorbing imported material at lower price levels. Although overall sentiment remains cautious, India’s domestic market has shown slight improvement, supported by steady demand from downstream industries.

Far East Asia: Demand Remains Subdued
Base oil demand across Far East Asia including South Korea, Japan, Taiwan, and Southeast Asian markets has remained soft. The primary driver of this weakness is sufficient inventory, muted lubricant consumption, particularly from the automotive and industrial segments. Slower vehicle sales growth, cautious manufacturing activity, and efficiency improvements in lubricant usage have collectively reduced base oil offtake.

Another contributing factor is ample regional supply and high inventory levels. Refiners in the region have continued to operate at stable rates, resulting in sufficient availability of Group I material despite limited buying interest. This has weighed on market sentiment and limited spot market activity.

Reflecting these conditions, FOB Group I prices in Asia have remained under pressure, with current assessments of Jan 2026 indicating:

  • Asia SN 150 at $732 per metric ton
  • Asia SN 500 at $745 per metric ton
  • Asia Bright Stock at $1,135 per metric ton

Bright stock demand remains weak due to limited offtake from marine and heavy industrial lubricant segments.

India and China: Lower Imported Availability
In contrast to Far East Asia, both India and China are witnessing lower prices inflows of imported base oils. At the same time, cautious buying behaviour amid uncertain downstream demand has restricted spot import volumes.

India is also seeing fewer imported cargoes, primarily due to higher landed costs, and sufficient domestic availability. Imports of Group I grades from Asia have slowed, as buyers selectively procure only specific grades not readily available from local refiners.

India’s Domestic Market Shows Mild Recovery
Despite lower imports, India’s domestic base oil market has shown modest improvement in demand, supported by stable downstream activity. Lubricant manufacturers have reported gradual improvement in offtake from the automotive aftermarket, infrastructure development, construction equipment, and general industrial sectors.

Seasonal demand factors and steady transportation activity have further supported lubricant consumption. As a result, domestic refiners have seen slightly better demand for locally produced base oils, with buyers favouring reliable supply and shorter delivery timelines over imported material.

However, the recovery remains measured. Buyers continue to manage inventories conservatively, and price sensitivity remains high amid broader macroeconomic uncertainty.

Crude-Driven Weakness
Base oil markets in Asia remain weak as crude oil prices stay soft despite ongoing geopolitical tensions. Events such as instability in the Middle East and changes in Venezuelan oil supply are creating short-term movement in crude prices, but they are not strong enough to support base oil values. With plenty of base oil available and feedstock costs lower, producers can protect margins while base oil prices drift down. Buyers remain cautious and are purchasing only when needed, keeping the market steady to slightly weak even as geopolitical risks continue in the background.

Market Outlook
Overall, the Asian base oil market continues to exhibit diverging regional trends. Far East Asia remains weighed down by oversupply, weak lubricant demand, and high inventories, keeping Group I prices such as SN 150, SN 500, and Bright Stock under pressure.

In the near term, market direction will depend on refinery operating rates, downstream lubricant demand, and broader economic conditions across Asia. Until a stronger recovery in end-use sectors emerges, sentiment is expected to remain cautious.