EMEA Base Oil Price Report


Base oil markets reeled in recent days from news of another variant to the COVID-19 virus, which appears to have extended from southern African states. Just as base oil players were looking forward to 2022 for a new beginning and perhaps a return to some form of normality, they have been jolted with prospects of more international restrictions in movement of people and goods and new lockdowns in many countries.

This scene does not augur well for December, or indeed the first part of next year, and with the northern hemisphere going into winter, signs for all markets are ominous.

In terms of base oil pricing, API Group I values appear to have stabilized around levels reported here previously existing levels, though there were rumors late last week that some buyers were bargain hunting for parcels to be delivered early in the new year. This would mean mid-Decemer loading of European and Middle East Gulf cargoes that would be on the high seas on Dec. 31 and Jan. 1. Such parcels would not be included in physical inventories, thus avoiding tax liabilities on year-end stocks in tank.

Markets across Europe are poised to slow between now and the Christian holiday season at the end of December, with blenders running down current stocks other than essential supplies of base oil to cover ongoing trade. However, coronavirus strain has clouded the future and may alter plans of some companies.

Group II markets throughout Europe and the Middle East Gulf still appear to have softened, with demand starting to fall away and a plentiful supply of all grades available throughout the regions. The original forecasts were that Group II base oils would enjoy a seasonal surge during the first part of 2022, but this is now an unknown, given current circumstances.

Apart from COVID effects, the API Group III sector continues to show a strong presence in the base oil market, with all availabilities being soaked up by willing purchasers, many of whom have committed to contracted supplies for next year.

In the face of refusal by OPEC and Russia to increase crude oil production levels, a number of nations are joining forces to try to rein in prices by releasing large quantities from strategic oil reserves. Those actions appear to make an impact, as crude values fell more than $10 per barrel in recent days, but again effects of the new coronavirus strain remain to be seen.

Dated deliveries of Brent crude dropped to $74.50/b, some $7 lower than our last report but $12 lower than recent highs. This price pertains to transactions for January front month settlement. West Texas Intermediate crude dropped to $70.45 per barrel, now also for January front month, leaving the crack between the benchmarks in the traditional area of $4/b.

ICE low-sulfur gas oil fell $63 per metric ton to $622/t, still for December settlement. These prices are from late London ICE trading late Monday.


European Group I export prices had steadied during the past two weeks, although there have been instances where some sellers offered extremely attractive prices to move large parcels out of tank. These prices are included in the new ranges which have therefore seen levels move downwards, even against the backdrop of more stability in this part of the base oil market.

There are also suggestions that there may be some rapid selling during the first part of December, for the reasons outlined above, although many export markets have been quieted by the coronavirus news.

Solvent neutral 150 prices fell some $10-$20 per ton since the last report to $775/t-$810/t on an FOB basis. SN500 is also showing marginally softer at $1,075/t-$1,120/t. This grade being more in demand for export destinations has remained steadier than other solvent neutrals or bright stock, which has been the subject of large discounts. There would appear to have been a move away from using bright stock when the prices crested $2,000/t, The move to use more heavier neutrals such as SN1200 and SN900, and also some heavy naphthenic grades has detracted from the use of bright stock, which is now at $1,195/t-$1,235/t.

Going into the final month of 2021, prices for Group I sales within Europe domestic prices would also be expected to show waning demand. With some economies such as Austria and the Netherlands imposing restrictions even before the southern African variant became news, base oil markets can expect to see a rapid reduction in demand, paralleled by a significant decline in the production of finished lubricants. Demand will probably be very quiet during December as many operations close or shorten working hours.

The differential between prices for export and intra-regional sales remains €75/t–€125/t, the latter being lower.

Group II prices throughout Europe have moved lower against a backdrop of softer demand and more-than-sufficient availabilities of all grades. Buyers are suggesting that December will be very slow, with most operators not looking to take significant quantities of base oils into stock until after the New Year. These intentions pre-dated news of the new COVID-19 strain.

One interesting movement noted this week was a delivery of 5,500 tons from a United States oil major directly into the United Kingdom, which avoided a duty that would have applied had it gone to Antwerp. Following Brexit, the U.K. does not European Union duties or import quotas on Group II imports from countries lacking free trade agreements with the bloc.

Group II prices have fallen to $1,270/t-$1,300/t (€1,125/t-€1,155/t) for 100 neutral, 150N and 220N, while 600N slid to $1,570/t-$1,600/t (€1,395/t-€1,420/t). Euro prices have been affected by the declining rate of the dollar against the euro. These prices apply to a range of Group II oils, including European and U.S. grades with full slates of finished lubricant approvals and imports from the Middle East.

European Group III markets maintain a positive sentiment with many buyers having spent November negotiating quantities and supply details for at least Q1 of next year. This aspect is seen as being important to ensure continuous supplies of Group III grades with most buyers remaining committed to their incumbent supplier(s). This applies to both partly-approved and fully-approved Group III base oils with many blending operations using both sets of product to optimise production of various finished lubricants.

However, December month is expected to be slower up to year-end, thereafter the the Group III markets expect to be buoyant with increasing demand through the fist part of 2022. Thsi forecast was prior to recent Covid announcements. 

Replenishment cargoes are expected to arrive into Europe from overseas producers in Middle East Gulf and Asia, whilst the ‘local’ production of fully-approved Group III base oils from Spain and Finland continues to move to northwestern European hubs for redistribution.

Prices in respect of partly approved Group III base oils are set between €1445/t-€1605/t. The 6 cSt and 8 cSt grades are priced between €1575 – €1605/t, with 4 centiStoke base oils between €1445 – €1560/t. The low end of this range includes Russian produced 4 centiStoke product which is mostly sold at keen prices into Eastern European markets. Prices are in respect of FCA supplies ex Antwerp-Rotterdam-Amsterdam hubs and also delivered into East European locations. Group III base oils holding full European OEM approvals such as Volkswagen, are placed slightly higher, although this differential is no longer as definitive as was once the case, with the differential narrowing as supply constraints for all Group II grades became a critical element of this market. These grades are placed in ranges between €1685 – €1720/t in respect of 4 centiStoke base oil with 6 cSt and 8 cSt oils assessed between €1685/t-€1720/t.

Baltic and Black Seas

The Baltic scene has been relatively busy over the past couple of weeks with one large cargo moving out of the region to Nigeria, whilst a number of short-sea trades have been completed from Riga going into Antwerp-Rotterdam-Amsterdam and the east coast of the United Kingdom. One smaller parcel of around 2,500 tons loaded out of Riga for receivers in Apapa. It is assumed that this smaller parcel was part of a larger cargo of chemicals or other clean petroleum moving to Nigeria, since the freight rate for such a small quantity would be unworkable on a delivered price basis. A further cargo of 5,000 tons of Russian export barrels out of Riga is destined for either Antwerp-Rotterdam-Amsterdam or a Marmara port in Turkey.

Baltic prices are still attractive to traders and resellers within the European mainland. With the differential between European mainstream levels maintained, this opens up opportunities for arbitrage trade into the U.S. Gulf Coast and Central America. The supply situation for Group l base stocks in the U.S. Gulf region appears to have improved, and this aspect may start to limit the number of opportunities open to Baltic traders to sell into this region.

Nothing further was heard of the inquiry for the two-port load out of Hamburg and Gdansk for 10,000 tons of various base oils for Nigeria. There may have been specification problems in adopting a naphthenic grade of base oil to substitute for a heavy vis Group l grade such as SN 900.

Baltic FOB prices levels are maintained for December offers, most of which have been issued and are under consideration. Prices for SN 150 are placed at $745-$775/t, with SN 500 at $985-$1,025/t. Quantities of SN 900 where available are around $1,065/t.

There appears to be something of a revival in trade between Mediterranean suppliers and Turkish receivers. A few cargoes from Greek sources were sold into Gebze and Izmit over the past few weeks. The local refinery at Izmir continues to produce and supply Group l products to the local markets. This was maintained as critical for some Turkish traders and blenders. During last week the Turkish lira collapsed again against the U.S. dollar, causing real problems for buyers looking to open letters of credit in dollars when attempting to purchase base oils from external markets, such as Greece and Italy.

It is heard that Tupras increased local lira prices again last week, to take account of the declining exchange rate that affects raw material costs for crude and feedstocks in the production of Group l base oils..

Mediterranean offers are indicated with CIF Turkey prices for SN 150 at around $865/t, with SN 500 and 600 at around $1,135/t. Bright stock was also offered into Gebze from Livorno, although prices for this grade were not heard from local sources in Istanbul.

Offers are also made to Turkish importers from Baltic sources, with a cargo of 3,000 to 4,000 tons of Russian barrels of base oil from Kaliningrad to move into Gebze. All supplies from Black Sea sources appear to be missing from the Turkish slate, although the river system at this time of year experiences ice as a block to exports moving from southern Russian refineries to Turkey and Israel. The STS set up at Kavkaz appears to have been discontinued.

Prices for imported Group ll grades resold on an ex-tank basis are assessed at €1,295-€1,345/t for the three lower vis products, with higher vis 600N at €1,655-€1,695/t. Group lll base oils resold on the same basis now have FCA levels estimated at €1,550–€1,675/t for partly approved grades, with fully approved Group lll grades at €1,745–€1,765/t.

Middle East

Red Sea reports indicate a great deal of activity loading base oils from Yanbu and Jeddah ports. There are some new destinations being considered for material moving from Red Sea sources, with one small cargo being considered for Greece. Another 5,000-ton parcel is offered to receivers in Luanda, Angola. This may not be the easiest voyage to arrange.

The usual cargoes are loading for the west coast of India, Pakistan and the United Arab Emirates, with normal loading being up to 18,000 tons per shipment. Grades will include both Group l and Group ll base oils.

The Middle East Gulf saw a number of offers for cargoes coming out of the U.S. Gulf Coast during December, indicating that suppliers in that region may be trying to offload inventory to receivers in the U.A.E., and also to the west coast of India, prior to year-end. Buyers in the U.A.E. have not responded with positive comments on the prices offered, which are considered to be high compared to local numbers that are broadly based on Iranian material coming into Hamriyah and Jebel Ali ports.

There still appears to be material stored in the U.A.E., which is offered into Nigeria. Around 6,000 tons of what is considered to be Iranian SN 500 is offered to receivers in Apapa. This cargo is due to load promptly, although no shipping offers were received by sellers at the time of compiling this report. This cargo is considered an expensive and difficult cargo to ship.

With price considerations on an FOB U.A.E. basis at around $985/t, the landed cost of moving this parcel could be around $1,200/t, making the material uncompetitive in the Nigerian market.

Group lll exports from sources in the Middle East Gulf from Al Ruwais, Sitra and Ras Laffan, continue unabated. Cargoes from Al Ruwais are moving to the west coast and east coast of India, and a feeder cargo from Sitra is loading for Hamriyah port, where the material will be resold on an ex-tank basis to local blenders and traders. Larger quantities of gas-to-liquid Group lll grades are moving out of Qatar to Asia-Pacific, Europe and the U.S.

Netbacks for Group lll base oils exported from Al Ruwais and Sitra are maintained, following the increases applied following rising prices for these grades in export markets such as India, China, Europe and the U.S.

Levels are assessed at $1,895-$1,940/t for 4 centiStoke, 6 cst and 8 cst partly-approved Group lll base oils. Fully-approved grades are still under the auspices of Neste at this time, but will soon be handled by Chevron, following the takeover of the Neste marketing operation in the next few months. The grades should netback higher, at $1,925-$1,975/t in respect of the full range of Group lll grades.

Notional netback levels are based on prices derived and informally assessed from regional selling levels, less marketing, handling and estimated freight costs.

Group ll imports into the Middle East Gulf are resold on both an FCA and also delivered basis, have prices assessed at $1,545-$1,655/t for the light vis grades, with heavier 500N and 600N at $1,835-$1,855/t.


South African shipping agents confirmed that a smaller cargo from a Rotterdam based major will sail with around 7,500 tons of base oils to Durban port, with arrival dates in late December to early January.

A further cargo from the same supplier loaded to service the chain of receivers in Guinea, Conakry and Abidjan. The cargo loaded out of Rotterdam and Fawley will discharge a total of 6,000 tons of Group l grades into three ports.

Nigeria reports the market to be relatively quiet, although that may change in the next couple of weeks if some suppliers are looking to move Inventory stocks prior to the year-end. Not all suppliers in Europe are in this position; hence, it is not anticipated to become a feeding frenzy when it comes to cargoes heading toward Nigeria.

Two parcels are moving out of the Baltic. The smaller of the two is the 2,400-ton parcel from Riga, whilst the larger cargo of 7,000 tons of Russian export grade loaded from Liepaja and Riga and is en route to Apapa, with arrival dates prior to year-end.

The cargo considered from Gdansk and Hamburg appears to have been ditched; however, the 6,000-ton cargo loaded from Singapore for discharge into Apapa is on the high seas, with whatever the balance of the cargo may be, being discharged into Antwerp-Rotterdam-Amsterdam.

Prices for Group base oil delivered into Apapa are again maintained this week until further information is gained regarding the Baltic sourced material. Levels remain indicated at $1,050/t for quantities of SN 150. Larger quantities of SN 500 are indicated at $1,150/t, with SN 900 priced at around $1,200/t.

Ray Masson is director of Pumacrown Ltd., a trader and broker of petroleum products in London, U.K. Contact him directly at pumacrown@email.com.

Lubes’n’Greases shall not be liable for commercial decisions based on the contents of this report.

Archived base oil price reports can be found through this link: https://www.lubesngreases.com/category/base-stocks/other/base-oil-pricing-report/

Historic and current base oil pricing data are available for purchase in Excel format.

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