The Base Oil Price Trend in Q2 2026 was marked by an exceptional rise across major global markets. Base oil is an important raw material for lubricants, automotive fluids, industrial oils, greases, and several other products, so changes in its cost can quickly affect manufacturers and buyers.
During the quarter, the market faced an unusually strong supply and cost shock linked to the USA-Israel conflict with Iran and the serious threat to the Strait of Hormuz. These developments affected crude oil movement, refining economics, transportation, and feedstock availability.
As a result, base oil markets across North America, Europe, Asia, and the Middle East experienced very large quarterly increases.
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Q2 2026 Base Oil Market Overview
Q2 2026 was very different from a normal quarter for the base oil market. Under ordinary conditions, prices tend to move gradually as crude oil costs, refinery operating rates, inventories, imports, exports, and lubricant demand change. During this quarter, however, several of these factors moved in the same direction at the same time.
The geopolitical situation created concerns about crude oil supply and international shipping. The Strait of Hormuz was particularly important because it is a major route for energy trade. Any serious disruption or threat around this route can increase uncertainty for refiners, traders, lubricant producers, and importers.
Higher crude oil and energy costs increased the cost of producing base oils. At the same time, concerns about supply availability encouraged some buyers to secure material earlier than usual. This combination of higher costs and tighter availability pushed prices sharply higher.
Across the monitored markets, the average quarterly increase was around 100%. Europe experienced some of the strongest gains, while the USA recorded an increase of more than 166%. Asian and Middle Eastern markets also saw major increases, although the size of the move varied by location, grade, and trade basis.
What Drove Base Oil Prices Higher in Q2?
The main factor behind the Q2 movement was the sudden increase in crude oil and energy-related cost pressure. Base oils are closely connected to refinery economics because they are produced through refining and further processing of petroleum-based feedstocks. When crude oil prices rise sharply, the cost structure of base oil production can also change quickly.
The geopolitical conflict added another layer of uncertainty. Refiners and traders had to consider not only the price of crude oil but also transportation risks, freight costs, insurance, availability of feedstocks, and delivery schedules.
Another important factor was supply tightness. When buyers believe that future availability may become more difficult, they often try to cover their requirements earlier. This can increase spot demand even when final lubricant demand has not changed significantly.
For base oil buyers, this created a difficult situation. Paying higher prices became necessary for securing material, while delaying purchases carried the risk of facing even higher prices later in the quarter.
USA Base Oil Market
The USA recorded the largest increase among the monitored markets during Q2 2026. Export prices for Grade Group II 220N on an FOB New Orleans basis increased by around 167% during the quarter.
The sharp rise was closely connected with the crude oil supply concerns created by the geopolitical crisis and the threat around the Strait of Hormuz. Higher feedstock and energy costs placed considerable pressure on refining economics.
The market also faced tighter export availability. When production costs increase significantly and supply becomes less flexible, sellers generally have less room to absorb higher expenses. These conditions resulted in a rapid increase in export values.
The upward movement continued into June. Base oil prices in the USA increased by another 10% during the month as supply remained tight and the cost environment continued to support higher pricing.
South Korea Base Oil Market
South Korea also experienced a major increase during Q2. Grade Group II 500N export prices on an FOB Daesan basis rose by around 100%.
The market was affected by higher crude oil-linked feedstock costs and tighter refining economics. Producers had to adjust pricing to reflect the changing cost environment.
After the sharp quarterly increase, market participants became more careful about procurement. Some buyers began reassessing their purchasing requirements instead of aggressively building additional stocks. This contributed to a small correction in June, when prices declined by around 2%.
The June decline was relatively small compared with the overall quarterly increase, showing that the market remained at a very high level even as buying activity became more cautious.
Taiwan Base Oil Market
Taiwan recorded an increase of around 97% during Q2 2026 for Grade Group II 500N on an FOB Mailiao basis.
The market experienced strong feedstock cost pressure as crude oil supply concerns affected the regional refining sector. Producers faced a higher operating cost environment, while buyers had to manage elevated prices.
Prices remained high through much of the quarter. In June, however, the market recorded a correction of around 2%. This movement reflected more cautious procurement after the exceptional price increase seen earlier in the quarter.
The Taiwan market showed how quickly a crude oil supply shock can move through the refining chain and eventually reach base oil export prices.
UAE Base Oil Market
The UAE market recorded an increase of around 74% during Q2 2026 for Grade Group I SN500 on an FOB Jebel Ali basis.
The regional location made the market particularly sensitive to developments around the Middle East. Concerns related to the Strait of Hormuz increased pressure on crude oil availability, energy costs, and regional trade flows.
The increase continued into June, with prices rising another 7%. Continued supply concerns prevented the market from correcting as quickly as some Asian markets.
For buyers, the combination of higher crude-related costs and regional logistics uncertainty made procurement more expensive and more difficult to plan.
Saudi Arabia Base Oil Market
Saudi Arabia recorded a quarterly increase of around 80% for Grade Group II 110N on an FOB Yanbu basis.
The market faced higher feedstock costs and supply chain uncertainty during the quarter. The geopolitical situation in the region created additional concerns around crude oil movement and international trade.
Base oil prices remained at elevated levels as producers adjusted to the higher cost structure. In June, prices increased by another 7%, showing that the market continued to face upward pressure even toward the end of Q2.
This was important for buyers because it meant that the market had not yet returned to a more balanced pricing environment by the end of the quarter.
Singapore Base Oil Market
Singapore recorded a quarterly increase of around 100% for Grade Group II 500N on an FOB Singapore basis.
As a major trading and refining hub in Asia, Singapore was affected by the wider regional increase in crude oil and feedstock costs. Higher production expenses and concerns over supply availability were reflected in export pricing.
The market remained at a high level during the quarter. In June, prices declined by around 2% as buyers became more cautious and began adjusting procurement plans after the earlier price surge.
The small June decline compared with the huge quarterly increase suggests that the correction was still limited.
Indonesia Base Oil Market
Indonesia recorded one of the strongest increases among Asian markets, with imported Grade Group II 150N prices on a CIF Jakarta basis rising by around 106%.
The increase was influenced by higher South Korean export prices as well as crude oil-linked feedstock costs. Since Indonesia depends on imported material for part of its base oil requirements,
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