The IEA sharply lowered its 2026 global oil demand outlook, citing the escalating Mideast conflict and elevated energy prices. The agency now projects a significantly steeper year-on-year decline in consumption than previously forecast, warning that market tightening and demand destruction are accelerating.
U.S. benchmark and international crude benchmarks both fell as investors took profits following prior gains on the announcement of sweeping new U.S. sanctions targeting Iran. The 'Operation Economic Outcast' campaign imposes global sanctions with no exemption for China, creating uncertainty around Iranian oil flows. Prices remain volatile as markets assess whether the sanctions will successfully isolate Iran's energy sector or be circumvented.
| Product | Region | Incoterm Basis | Price | Last Updated Month |
|---|---|---|---|---|
| Base Oil | USA | FOB | USD 2,000.00/MT | August 2026 |
| Base Oil | UAE | CFR | USD 1,935.30/MT | August 2026 |
| Base Oil | Germany | FOB | USD 1,890.00/MT | August 2026 |
| Base Oil | Singapore | FOB | USD 1,350.00/MT | August 2026 |
| Base Oil | India | CFR | USD 1,320.00/MT | August 2026 |
| Base Oil | USA | FOB | USD 2,015.00/MT | July 2026 |
| Base Oil | UAE | CFR | USD 2,070.00/MT | July 2026 |
| Base Oil | Germany | FOB | USD 2,020.00/MT | July 2026 |
| Base Oil | Singapore | FOB | USD 1,465.00/MT | July 2026 |
| Base Oil | India | CFR | USD 1,455.00/MT | July 2026 |
Stay updated with the latest Base Oil prices, historical data, and tailored regional analysis
Asia
In the UAE, the average prices of Base Oil fell from ~USD 2,070.00/MT (CFR) in July to ~USD 1,935.30/MT in August, a decline of ~6.5%. India saw a steeper drop of about 9.3%, from ~USD 1,455.00/MT (CFR) to ~USD 1,320.00/MT in the first two months of Q3’26. Group I and II grades weakened as more regional producers offered cargoes while demand stayed soft during China's slow lubricant season. Domestic suppliers in China and India also cut prices to compete with imports, adding pressure on Indian import values. Group III moved the other way, as the Gulf outage removed about 20–25% of global capacity. Conventional grades steadied in late September as crude oil climbed again.
Europe
In Germany, base oil averaged approximately USD 2,020.00/MT (FOB) in July and eased to about USD 1,890.00/MT in August, a fall of ~6.4%. Demand slowed during the summer holidays, and blenders held back purchases in expectation of lower prices, prompting a major supplier to cut Group I offers. From September, prices stabilised as supply tightened. A refinery explosion in Rotterdam took Group II output offline until November, strikes on Russian refineries reduced supply further, and high diesel margins encouraged refiners to favour fuels. Group III stayed firm, as the Middle East normally supplies more than a third of Europe's needs.
North America
In the USA, average base oil prices edged down from nearly USD 2,015.00/MT (FOB) in July to roughly USD 2,000.00/MT in August, a slight dip of ~0.7%. Export values for conventional grades faced pressure from competing Asian cargoes, and some suppliers released stocks held for the hurricane season. The decline stayed limited, as Group III supply remained very tight after Middle East exports fell by more than 70% earlier in the year, and producers raised posted prices for premium grades several times. Rising diesel prices and September refinery turnarounds added further support.
Analyst Insight
According to Procurement Resource, base oil prices are likely to firm as higher feedstock costs and refinery outages tighten supply, while premium grades stay tight until Gulf production returns.
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Asia
Base Oil prices in China were affected by grade-wise supply differences during Q2’26. Group I and Group II prices increased early in the quarter due to higher crude-linked costs and supply pressure but softened later as crude values declined and domestic production remained strong. China produced close to 580,000 tonnes of paraffinic base oils in April, supporting domestic Group II availability and limiting price increases compared with imported grades. Group III prices remained firm due to restricted international supply and dependence on imported premium-grade material. Later in the quarter, lower crude prices reduced feedstock support, while weaker lubricant demand and cautious purchasing pressured the market.
Europe
Base Oil prices in Germany declined to ~EUR 1.81/kg in April and ~EUR 1.67/kg in May, showing a ~7.5% decrease. European markets experienced strong price increases early in Q2 due to reduced supply, lower refinery availability and limited Group II and Group III availability. European Group II supply declined significantly during April, creating tighter conditions for lubricant blenders. However, prices stabilised later as supply improved, crude values weakened and buyers reduced inventory levels. Group III remained the tightest segment due to limited Middle Eastern availability, keeping premium-grade prices elevated.
North America
Base Oil prices in the United States declined to ~USD 2,400.00/MT in April and ~USD 1,815.00/MT in the following month. Despite the decline shown in monthly prices, the North American market faced strong supply pressure during Q2 due to maintenance shutdowns, limited Group III availability and higher export demand. Middle Eastern supply disruptions affected premium-grade availability, while producers implemented price increases across Group I, Group II and Group III grades. However, rising lubricant production costs reduced buying activity as blenders lowered operating rates and managed inventories cautiously. Lower crude prices provided some relief later in the quarter but did not fully offset supply constraints.
Base oil refers to lubrication grade oils that are derived from refining crude oil (mineral base oil) or chemical synthesis (synthetic base oil). Group II base oils contain more than 90% saturates, less than 0.3% sulphur, and have a viscosity index of 80 to 120. They are commonly produced through hydrocracking, which is a more complex process than that used for Group I base oils. Group II base oils have better antioxidation properties because all of their hydrocarbon molecules are saturated.
Rubber Manufacturing, Textiles, Blending of Engine Oils
Chevron Corporation, Exxon Mobil Corporation, Hyundai and Shell Base Oil Co., Petro-Canada Lubricant, Saudi Arabian Oil Co.
CurrencyUS$ (Data can also be provided in local currency)
Supplier Database AvailabilityYes
Customization ScopeThe report can be customized as per the requirements of the customer
Post-Sale Analyst Support360-degree analyst support after report delivery
Note: Our supplier search experts can assist your procurement teams in compiling and validating a list of suppliers indicating they have products, services, and capabilities that meet your company's needs.
In this process, vacuum gas oil is used as a feedstock which is run through a hydrocracker at very high pressures. Inside the hydrocarbon, the molecules are reshaped and saturated. Sulfur is converted into hydrogen sulfide gas and nitrogen into ammonia, forming a waxy base oil containing more than 90% saturated compounds.
The second reactor is a catalytic dewaxer which converts the wax molecules to isoparaffins and causes even more saturation. Finally, the final few percent of residual aromatic compounds are saturated to form Group II base oils in a lower temperature but very high-pressure finishing step.
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This report provides the cost structure of LPG production by the petroleum refining process. In this process, the crude oil recovered is separated into oil and wet gas via a gas trap.
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