EMEA Base Oil Price Report


The conflict in Ukraine is evolving, as Russia possibly shifts its attacks away from Kyiv toward the eastern Donbas region, but the physical damage to Ukraine and economic damage beyond its borders continue to accrue.

The conflict is having direct and indirect effects on energy prices, contributing to increases around the world and adding to inflation that was already hampering so many industries and markets.

Base oils have naturally been impacted as crude oil and feedstock costs rose to levels are around 50% higher than before the invasion. There have been other complications in base oil markets such as API Group l becoming desperately short in the European arena – a situation exacerbated by the loss of some key sources such as a plant in Livorno, Italy.

However, Group II and Group III have also seen scathing price hikes pushing values way above the highs of last year.

In the Baltic Sea, there appears to have been a hiatus of Russian export barrels coming through Latvia and Lithuania. The exact cause is unclear, but with traders in the ports of Riga, Latvia, and Liepaja, Lithuania, waiting for replenishment supplies paid for some time back, these delays are adding to the Group I shortage around Europe and beyond.

Crude prices steadied the past few days at a level just below $110 per barrel for dated Brent, though markets remain sensitive to developments in Ukraine.

Prices for dated Brent are reported at around $108/bbl, now for June front month settlement, while West Texas Intermediate fell a similar amount to $103/bbl, still for May front month. Low-sulfur gasoil is steady at $1,146 per metric ton, still for April settlement. These prices were obtained from London ICE trading late April 4.

Prices are extremely sensitive to any reports issuing from the Ukraine situation, and with Russia continuing to supply gas and other petroleum products into the European markets the forward situation is highly charged and could change and alter at a moments notice. Uncertain times indeed. 


Values for Group l exports from Europe are increasingly difficult to pinpoint due to the dearth of trades. Supplies are extremely tight for any large parcels of Group l grades, with bright stock becoming nigh impossible to source from any of the usual producers of this grade.

Over the past two weeks there have been many increases applied to the small quantities of material being made available for export markets, with sellers almost able to name their prices in the few offers that have been seen around.

With hardly any Russian availabilities supporting the mainstream markets, sellers are able to select their buyers with a number of long-term buyer-seller relationships being called upon to access material for export destinations such as Nigeria. Output of base oils is not programmed to restart from Livorno until June at the earliest, so traders are scratching around to purchase any availabilities they can find.

One such deal has been the purchase by a European trader of a quantity of 4,400 tons of low quality bright stock that loaded out of Alexandria in Egypt and is presently en route to receivers in Lagos. Quite what the local blenders are going to use this material for, given the low specification and poor quality, can only be a guess, but as one source said “beggars can’t be choosers.”

Solvent neutral 150 prices are once again moved upwards this week, with FOB levels currently assessed between $1,075 per ton and $1,100/t and SN500 prices moving rapidly higher to $1,210/t-$1,255/t. That range is based on a single offered price that was at the high end, but the deal had not been completed before this report was issued, hence the spread covers any counters which may have come from the buyers.

Bright stock FOB prices cannot really be established since there have been no offers for export quantities of this grade other than the low quality material loaded out of Egypt, which cannot be taken as representative of this grade. Nominally putting a number on bright stock purely for statistical reasons, indications would be in a range between $1,550/t-$1,625/t, on a hypothetical basis only.

European domestic markets are under pressure on two fronts, one is the ability of blenders to cover full requirements in sufficient quantities, and the second is the never ending spiral of prices which are being applied to supplies in this sector of the base oil market. Prices which used to move perhaps once every month are being quoted by the day, and in some cases by the hour. Blenders are in a tight spot with not knowing what their future costs are going to be, whilst at the same time are being asked to offer and quote for quantities of finished lubricants for regular buyers.

Sellers are leaving short validity offers on the table sometimes with only hours for firm pricing, this is an untenable situation for buyers who are having to accept rapidly changing prices which are only heading in one direction at this time.

The differential between domestic and export markets has been extended due to the lack of export deals and the rapid price increases in the domestic trade. The differential is now reckoned to be between €215/t-€275/t, exports being lower.

European Group II prices are following the Group I domestic markets although sellers are honoring contracted business but are regularly revising prices as the base oil lag kicks in to reflect higher raw material costs which are now impinging on current production. Prices have moved upwards and are expected to move higher still during this month. Producers are commenting that they are merely catching up with rising feedstock levels and are having to face further increases to maintain margins.  

The Group II base oil scene is not long in supply terms, although principal suppliers in this market are assuring customers that they will receive contracted quantities of product, but also that these quantities cannot be increased at this time, since there appears to be definitive drift away from a spot market situation.

Group II prices are heading back to where they posted during the peak of the market in 2021, with euro prices being hiked to new highs. The euro is steady against the dollar, making forward prices simpler to calculate, although the feedstock cost angle is far from certain, and producers reserve the right to alter price levels accordingly.

Levels are assessed at $1,625/t-$1,675/t (€1,475/t-€1,520/t) for 100 neutral, 150N and 220 and at $1,855/t-$1,895/t (€1,685/t-€1,725/t for 600N. These prices apply to a range of Group II oils from Europe, the United States, the Middle East and Asia-Pacific.

Not to be left out of current proceedings Group III prices have commenced a climb which may see levels pushing to their highest yet witnessed for these grades. Producers and distributors are reeling from the hikes in production costs with feedstocks for Group III base oils reaching exceptionally high levels. Whilst these raw material costs are largely in-house costs, they must be recovered from final selling prices in the various markets all of which have seen prices moving swiftly upwards.

Buyers are arguing that the costs associated with a replenishment cargo should be held firm until the quantity within that cargo is depleted and the next parcel should be assessed on arrival. Sellers contest this line of thinking saying that they want to regularly review prices and will only maintain firm prices for a limited time period, most are looking a two week price firm periods.

All availabilities are being taken up by regular buyers, and any new buyers are finding it tough to gain a foothold in arranging supplies.

Prices in respect of the range of partly approved Group III base oils have moved higher over the past two weeks and can it be assumed that these increases are just the first of more to come. Price assessments are at €1,795/t-€1,820/t for 6 and 8 centiStoke grades and €1,775/t-€1,805/t for 4 cSt on an FCA basis ex Amterdam-Rotterdam-Antwerp. Suppliers made comments last week which indicated that these prices would move again from mid April with a number of cargoes moving from Middle East Gulf to European hubs.

Group III base oils currently holding full European OEM approvals are also moved upwards in prices, with 4 cSt grades at €1,935/t-€1,955/t and 6 and 8 cSt at €2,005/t-€2,040/t. Large quantities of these are being bridged from a refinery in Spain to a supply hub in Rotterdam for onward distribution in Northwestern Europe.

Baltic and Black Seas

Baltic replenishment supplies of Russian export barrels do not appear to be forthcoming, and the only regular supplies appear to those going in and then coming out of Svetly terminal in Kaliningrad. Supplies from Gazprom and Rosneft refineries do not seem to be flowing through the rail system, but whether the problems lie with the refineries themselves or with logistics is not plain to work out.

Some cargoes were put together at the end of March for the usual destinations, with two parcels headed for the east coast of the United Kingdom and another for Rotterdam. One interesting cargo was a relatively small parcel of 2,800 tons from Liepaja, which loaded on a vessel destined for Savannah, but according to new sanctions imposed by the U.S. government, no petroleum products of Russian origin are permitted to be imported into the country. The certificate of origin will most certainly show a Russian source, so it will be interesting to see where that vessel diverts to, to discharge the cargo.

Another large cargo of 13,000 tons loaded for Apapa in Nigeria, but suggestions heard today are that this will be the last large parcel available – at least in the near term – to go into West Africa. Other shipping enquiries still include material moving out to Singapore, although this would load out of Kaliningrad, with another 7,000 tons for discharge into a Marmara port, possibly Gebze.

Without product in-tank it has been difficult to access current FOB prices, other than taking landed numbers into the U.K. and Rotterdam, less fright costs. These numbers would indicate that prices for Russian exports moved sharply upwards, with SN 150 now assessed at $1,025/t-$1,055/t and SN 500 indicating at $1,160/t-$1,195/t. Quantities of SN 900 for Nigeria market would be indicated at around $1,355/t.

Baltic trade still seems buoyant, although the activity is perhaps limited to a number of cargo loadings. Commercial dealings will have halted for the next couple of weeks with the Russian Orthodox celebrations following on from the European New Year holidays. A number of reported cargoes left the Baltic during December, and others are planned for early January. Of these, a couple of decent sized parcels were allocated to receivers in the east coast of the United Kingdom, with another large cargo of 10,000 tons of Russian export barrels loading around mid-January for Nigeria.

There are other interesting movements, with one cargo sailing for La Plata in Argentina, while another is loading 5,000 tons for an Israeli receiver. A final parcel of 9,000 tons in total will load in Kaliningrad for a two-port discharge in the United Arab Emirates and Singapore. These latter cargoes prove that arbitrages are open for Baltic suppliers who are willing to open up to new trading routes and receivers. 

Baltic prices obviously maintain a competitive edge versus mainstream European supplies with FOB prices maintained for this week. Prices for SN150 are assessed at $725/t-$765 per metric ton with SN500 at $975-$1,015/t. Quantities of SN900 were made available, placed at around $1,045/t.

Cargoes re-started into Turkey from Greece and Italy with relatively large parcels, some of 5,000 to 6,000 tons, moving from Livorno and Aghio going into Derince port. The obvious questions are posed as to how the Turkish banking system is responding to laying hands on dollars after a further record fall in the lira against the U.S. dollar. An even more pressing query is how the local refinery at Izmir, run by Tupras, is managing to buy stocks of crude oil to produce fuels and base oils for the local market. It also is imagined that local prices will have gone sky high, with rampant inflation wrecking the Turkish economy.

Mediterranean offers were heard indicated CIF Turkey for SN150 at around $845/t with SN500 and 600 at around $1,110/t. Bright stock may have been offered into Gebze, Turkey, or Derince from Livorno, though prices are not available for this grade. 

Prices for imported Group II grades resold on an FCA basis by traders are maintained, and are at €1,275/t-€1,325/t for the three lower vis products with 600N at €1,625/t-€1,675/t. Group III base oils resold on the same basis have FCA levels remaining at €1,550/t-€1,675/t for partly approved grades with fully approved Group III grades at €1,745/t-€1,765/t.

Middle East

There was no confirmation of the Red Sea cargo proposed for Nigeria, and the assumption is that either the economics were difficult or the process for transactions in Nigeria may have become unnecessarily complex. The other explanation may have been the lack of suitable tonnage to make the voyage. 

Large cargoes, one of 18,000 tons from Yanbu and Jeddah, are moving as usual into the west coast of India, with another smaller cargo offered to receivers in Singapore.

In the Middle East Gulf there are no reports of any Iranian base oil cargoes moving, although there is a cargo of rubber process oil that may be shipped out of Ras al Khaimah in the U.A.E. to buyers in South Korea. This material can only have been produced in Iran and would have been shipped into storage in the U.A.E. The shipping inquiry to move 5,000 tons of base oils from Hamriyah to Apapa remains open, but this is an unlikely trade due to many reasons.

Buyers in Middle East Gulf have again seen offers from traders in the U.S. for part-cargo supplies of Group I grades with a cargo of 10,000-20,0000 tons considered for a two-port discharge in the U.A.E. and the west coast of India. Receivers in the U.A.E. are considering an offer from Baltic suppliers for Russian Group I base oils for arrival in the early New Year.

Group III exports from Al Ruwais, Sitra and Ras Laffan continue, with a 6,500-ton cargo from Al Ruwais shipped to another mainland Chinese port, while a huge quantity of gas-to-liquid Group III+ base oils is to load out of Ras Laffan for Houston. Also, Group III material out of Sitra refinery will provide a 4,500-ton parcel going into Mumbai.

Netbacks for Group III base oils exported from both Al Ruwais and Sitra remain unchanged this week with regional local selling prices in various regions stable and steady at this time.

Levels remain assessed at $1,895-$1,940/t for 4 centiStoke, 6 cSt and 8 cSt partly-approved Group III base oils. Fully-approved grades from Sitra refinery in Bahrain, still being sold by Neste, will come under the Chevron banner within the next six months. Due to higher achievable selling prices, the grades will netback higher, at $1,925-$1,975/t for the full range of Group III grades.

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

Group II imports having been imported into storage in the Middle East Gulf are resold on both an FCA ex-tank and on a delivered basis. These grades have prices maintained, at $1,525-$1,635/t for the light vis grades, with heavier 500N and 600N at $1,815-$1,835/t. Group II base oils resold in Middle East Gulf are supplied from various sources such as South Korea, Saudi Arabia and the United States.


South African shipping agency sources confirmed a 9,000 cargo to load later this month out of Rotterdam and Fawley for Durban with final discharge into Dar-es-Salaam.

A planned cargo out of the Baltic is to load 10,000 tons of Russian export barrels during the first week of January, while a European major is supplying two cargoes of base oils into West Africa. The first is a large 12,000-ton parcel of Group I grades loaded out of Rotterdam and Fawley, in the U.K. This cargo is bound for receivers in Apapa. Another smaller cargo will load from Fawley refinery to service the requirements under the Ghana tender. The cargo will discharge around 4,000 tons of three Group I grades, loading in early January.

As noted, a shipping enquiry for the possibility to supply 5,000 tons of Iranian origin base oils from Hamriyah in United Arab Emirates to receivers in Apapa is still on the table, although the longer this deal remains open suggests that it is less likely to go ahead.

Prices for API Group I base oils delivered into Apapa remain unchanged. With news of the FOB prices from the imminent Baltic cargo eagerly awaited for the next report. CIF/CFR Apapa price levels remain indicated at $1,025/t for quantities of SN150, larger quantities of SN500 are at $1,120/t with SN900 priced at around $1,175/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.

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