Group II Base Oil Supply Chain: From Refinery to Lubricant Blender

Where Group II is produced

Asia-Pacific dominates Group II export supply. The big four producers are S-Oil and SK Energy in South Korea (each running ~1.0–1.5 million MT/year), Formosa Petrochemical in Taiwan (~600,000 MT/year), and ExxonMobil's Singapore complex (~700,000 MT/year, partly captive).

The Middle East adds Luberef in Saudi Arabia and Adnoc's planned Ruwais expansion. The US Gulf Coast (Chevron, Motiva, Excel Paralubes) exports surplus westbound to Europe and eastbound to Asia when arbitrage opens.

How the cargo moves

Inside Asia, the dominant logistics are 22 MT ISO tanks (door-to-door, breakbulk), 20–24 MT flexitanks (container slot), and bulk parcels of 1,000–5,000 MT on chemical/parcel tankers.

Bulk parcels deliver the lowest $/MT but require terminal storage at discharge — only the bigger blenders (Total, Shell, ENOC, large national champions) can take parcel cargoes neat. Mid-tier blenders mostly buy flexitank and ISO tank.

The choke points to watch

Korean refinery turnarounds — typically May/June and October/November. A single S-Oil or SK turnaround removes 60,000–100,000 MT/month from regional supply.

Container availability and slot prices — flexitank economics depend entirely on backhaul container rates from China to Southeast Asia. Spikes in Asia-Pacific liner pricing can erase the flexitank advantage over ISO tank.

Hormuz transit insurance — Middle East origin cargo gets hit with $25–45/MT freight surcharge during Hormuz disruption events. Korean origin trades at a premium during those windows.

Where Sanyang sits in the chain

We trade as principal — buying Group II 150N and 500N from refinery offtakers and direct supply contracts, holding inventory in Malaysia and Singapore, and reselling in flexitank, ISO tank and bulk vessel to blenders across Southeast Asia.

That position lets us absorb the timing risk that a blender of 5,000 MT/month can't carry — turnaround windows, freight spikes, FX moves between $-denominated cargo and local-currency invoicing.

Frequently asked questions

Who are the largest Group II base oil producers?

By export volume into Asia: S-Oil (South Korea), SK Energy (South Korea), Formosa (Taiwan), ExxonMobil Singapore, Luberef (Saudi Arabia), and the US Gulf cluster (Chevron, Motiva, Excel Paralubes).

What is the minimum order quantity for Group II base oil?

Sanyang Petroleum supplies from 20 MT (one flexitank) up to bulk vessel parcels of 5,000 MT+. ISO tank (22 MT) and drum quantities are also available.

Why is Group II Korean origin trading at a premium right now?

Two unscheduled Korean turnarounds in Q2 2026, combined with the Hormuz freight premium on Middle East Gulf origin, have made Korean cargo the most secure-arrival option — and the market is paying $40–60/MT for that certainty.