EMEA Base Oil Price Report


Base oil trading was relatively muted last week as celebrations in Russia, Greece and other Christian Orthodox countries prolonged the holiday season following Christmas and New Year festivities in areas that follow the Gregorian calendar. COVID-19 also played a role as main markets through Europe, the Middle East and Africa suffered from isolation practices or people missing work.

Prices have been difficult to gauge with little movement from December’s levels, whilst raw material costs continue to increase with crude and feedstock prices starting to climb despite assurances from Opec and other large producers that they are pushing increasing quantities of crude oil on to the market to try to hold down prices, or at least contain them in the bands established during the first few days of 2022.

Rising crude and products prices will add to inflationary pressures in many economies, an undesirable aspect at this particular time due to the coronavirus which is piling on costs to individuals and corporations alike. The Omicron variant is yet to peak in most regions, and with infection rates running extremely high, economic chaos is gripping almost all nations around the Europe, Middle East and Africa regions.

API Group l prices remain relatively steady with little activity to rock the boat, whilst at the same time there have been very few reported Group ll movements in pricing, with January levels agreed on some time prior to the Christmas break. Group lll numbers continue to show strength, with buyers and sellers reporting firm prices with no spot availabilities other than some 4cst material coming out of the Russian market.

Forecasts for 2022 are up in the air, with the COVID situation weighing heavily on all markets, adding a sense of the unknown to a difficult time in the base oil business. Some are saying that everyone will have to learn to live with this pandemic, and that with lesser effects of new variants and greater immunity being built up all the time, populations will return to a ‘new normality’ during the course of this year.

With rising crude prices some sellers are suggesting that base oil prices are set to rise, but perhaps not in the same dramatic way that numbers were lifted during the second quarter of last year. Nevertheless, should crude and feedstock prices continue to climb, then there may come inevitable increases to product prices which will include base oils.

Dated Brent crude prices have firmed further over the past week with this crude now posting at $81.80 per bbl, $4 higher than at the end of the year, this level being now in respect of March front month. WTI crude has also moved higher and now shows at $78.90 per bbl, this level still being in respect of February front month.

ICE LS Gas Oil has risen by almost $50 per metric ton since last reported.  However, there are no reports so far of refiners looking to cut back distillate production, since with the opening up of travel restrictions globally, there may be an increase in demand for jet fuel, diesel and motor gasoline, allowing a plentiful supply of feedstocks for the provision of base oils. Low sulfur gas oil now posts at $717/t for January front month.

Prices were obtained from late London ICE trading on Jan. 10.


Group l export prices remained relatively stable over the past couple of weeks, with demand only starting to return to the European markets. There have been a number of significant enquiries for receivers in the traditional export destinations such as West Africa. Middle East Gulf and the west coast of India, although with freight rates running ever higher European FOB prices would have the be discounted to maintain a competitive edge against other availabilities from the U.S. Gulf Coast and Far East.

SN 150 prices are maintained with FOB price levels steady and assessed at $755/t-$780/t, with SN 500 prices showing marginal strength with small increments of $10/t-$25/t over numbers seen at the year end. This grade is now being offered in a range at $1,065/t-$1,120/t. 

Brightstock FOB prices also moved marginally ahead, with demand for this grade showing an increase during the first few days of the New Year. That put FOB prices for this base stock in a range at $1,185/t-$1,225/t.

The higher prices for SN 500 and bright stock are said to be attributable to sellers applying increases to reflect higher raw material costs.

Local or domestic markets in Europe were slow to restart after the holiday period with many blending operations short staffed due to the COVID situation in many countries. Restrictions vary enormously from country to country, with some governments acting in draconian fashion to try to eradicate the spread of coronavirus. Other nations adopted a more liberal approach with some aiming for herd immunity and vaccination rather than closing down the economy, curtailing opportunity and growth at a critical time of the year.

All markets, however, reflect to a greater or lesser extent, the effects of the COVID-19 pandemic, which shows very few signs of abating any time soon. Some pundits are commenting that they expect to have many more variants spreading during the course of this year, with all the negative aspects which this scenario will bring.

Demand is sluggish in the regional base oil markets, although there are pockets of hope and activity which could mean that as spring approaches, the market may yet turn and revert to some form of normality. 

Prices remain steady, with the differential between export and domestic levels largely maintained. The differential is assessed at €100/t-€145/t, domestic numbers being higher.

Sellers are hanging their hat on rising crude and feedstock costs, which have to be recovered at some stage.

One piece of positive news is that additional capacity for Group ll base oils will be starting at Gdansk refinery later this year, following modifications to feedstock production and the physical building of a new processing unit. Timing and exact details are still to be forthcoming from Lotos in the next few weeks.

Group ll prices in offers are seen to be steady, although prices set during December for January are slightly weaker than previous with levels at $1,225/t-$1265/t (€1,085-€1,120) for the three light vis grades (100N, 150N and 220N) with the higher 600N vis grades at $1,525/t-$1,550/t (€1,350-€1,375).

Prices are for a range of Group ll base oils, including European and U.S. fully approved grades, in addition to small imports from Middle East and Asia-Pacific.

The European Group lll market maintains the positive notes on which this sector ended 2021. There are few instances of spot availability around the market, with most buyers planning purchases of these grades in advance. Often some sellers are making supply commitments up to three months in advance. However, forecast demand had to be rerun to take account of the coronavirus situation, which has hampered demand for finished lubricants for at least the first quarter of this year. Blenders are ever hopeful that business will pick up during the latter part of this quarter and will revert to former levels in the second quarter.

Prices for the range of partly approved Group lll base oils remain unchanged and are assessed at €1,445/t-€1,605/t. Six centiStoke and 8 cSt grades are set at €1,575/t-€1,605/t, and 4 cSt base oils at €1,445/t-€1,560/t. The lower end of the range reflects Russian 4 cSt material being offered and sold into local Russian and Eastern European markets. Other prices are for FCA supplies from Antwerp-Rotterdam-Amsterdam and Northwest Europe.

Group lll base oils that currently hold full European original equipment manufacturer approvals are assessed higher, with fully approved 4 cSt grades in a range at €1,665/t-€1,700/t, with 6 cSt and 8 cSt oils at €1,695/t-€1,725/t.

Baltic and Black Seas

Baltic Sea base oil trades seem to have got off to a busy start for the New Year, with a raft of inquiries for offers into a variety of destinations from the U.S. Gulf Coast to South America, also including more traditional locations such as Nigeria and Singapore. Prices are the key to the open arbitrages into which Russian export barrels can be pitched. The Russian Orthodox holidays have stemmed serious activity for most of last week, but indications are that this week and next will see the return to business as usual although many contacts are continuing to work from home during this period of high transmission of the Omicron coronavirus.

A number of parcels are planned for the east coast of the United Kingdom and Antwerp-Rotterdam-Amsterdam in addition to the more distant “export” cargoes.

Whilst remaining competitive versus mainstream European prices Baltic Sea FOB numbers appear to have firmed a little since last reported in December. One source commented that with prices starting to move upwards on a refinery gate basis, there could be supply concerns regarding Russian military activity in Ukraine and Kazakhstan. This activity should not impose directly on supplies of export barrels from Russian refineries but could have an impact in the medium to longer term should developments take place.

Current Baltic FOB levels for SN150 are pitched at $750/t-$785 per metric ton, with SN500 assessed in offers at $1,000/t-$1,045/t. Quantities of SN900 are estimated at around $1,095/t.

In Turkey there was little or no further news on available quantities of Group I grades from Izmir refinery. A number of export cargoes were to be offered for sale on an FOB basis from shore tanks in either Aliaga or Gebze, Turkey. These export cargoes would have been sold in U.S. dollars, rather than the local sales ex-refinery, which are all conducted in Turkish lira.

Additionally, offers from sellers in Greece and Italy have landed on Turkish traders’ and large blenders’ desks, but reports are that it is becoming increasingly difficult for banks to obtain foreign currency to be able to open letters of credit to external sellers. Due to high inflation and devaluation of the Turkish lira, importing cargoes is becoming increasingly harder. 

Offers from Greek and Italian producers were indicated CIF Turkey at around $855/t for quantities of SN150, along with SN500/600 at $1,125/t. A number of offers are being considered, but reselling in Turkish lira on an ex-tank basis has become risky, given the volatile exchange rates and the rampant inflation within the Turkish economy.

Imported Group II grades resold on an FCA basis by distributors firmed a little over the last month, and are now levied at €1,295/t-€1,345/t for the three lower vis products with 600N at €1,650/t-€1,695/t. Since no additional cargoes are arriving into Marmaras ports, Group III base oils resold on the same ex-tank basis have FCA levels maintained at €1,550/t-€1,675/t for partly approved grades, with fully approved Group III grades at €1,745/t-€1,765/t. These levels may move slightly upwards, should further replenishment cargoes arrive during January.

Middle East

From Red Sea reports, the usual large cargoes are moving from Yanbu al Bahr and Jeddah to the west coast of India. These large parcels, often around 17,000 tons to 18,000 tons, comprised of both Group I and Group II base oils. These cargoes are for a number of receivers who on occasion take the material on an STS basis in Mumbai anchorage, or alternatively at JNPT terminal.

Other large cargoes are also bound for United Arab Emirates and Pakistan, whilst smaller Group II parcels from Yanbu are also considered for northwestern Europe, the Mediterranean and Turkey. 

Middle East Gulf news is that a large Iranian Group I cargo is to move from one of the southern Iranian ports to Hazira in the west coast of India. There is no shipping confirmation of this cargo as yet, although sources in the U.A.E. informed this report that perhaps some 8,000 tons will load on this parcel. This is a relatively large quantity for Iranian producers to move, although there may be problems chartering a suitable vessel which will immediately be subject to U.S. sanctions.

The shipping enquiry to move 5,000 tons of base oils from Hamriyah to Apapa appears to have been dropped. Local contacts in the U.A.E. reiterated that this cargo is real and will have to move elsewhere if Nigerian buyers cannot accept prices and terms. Indian receivers have shown some interest to take this parcel, which is thought to be Iranian material, with a certificate of origin from the U.A.E.

Receivers in the U.A.E. accepted an offer from Russian sellers from the Baltic to take a part cargo that will load out of Kaliningrad and sail to a U.A.E. port and then to Singapore with the balance of the cargo, which is comprised of 9,000 tons of two Group I grades.

Group III exports from production sites at Al Ruwais, Sitra and Ras Laffan are noted this week, with a number of cargoes loading from Al Ruwais for mainland China and Mumbai. Another large cargo will load during this month out of Ras Laffan in Qatar, with another GTL cargo of Group III+ grades.

Netbacks for Group III base oils exported from Al Ruwais and Sitra are maintained due to regional selling prices remaining unchanged. Levels are assessed at $1,895-$1,940/t, for the range of 4 centiStoke, 6 cSt and 8 cSt partly-approved Group III base oils. Fully-approved grades from Sitra refinery in Bahrain – sold by Neste, but soon to be marketed by Chevron –  will achieve higher netbacks due to higher selling prices. These grades will netback higher at $1,925-$1,975/t for the 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 into Middle East Gulf are resold on both an FCA ex-tank and also on a delivered basis. Grades have prices remaining unchanged, 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 sourced from South Korea, Saudi Arabia and the United States.


The large 10,000 tons cargo from Kaliningrad bound for Apapa will load either towards the end of this week or perhaps early next week. This cargo will arrive in Nigeria around the middle to end of February, and the trader involved sold this quantity to a local Nigerian trader and distributor.

The European major covering the Ghanaian requirement under the annual contract will also load 5,000 tons from the United Kingdom for receivers in Lagos. Whether this is a trader controlled cargo or is being dealt directly by the major is unknown, although given experience of Nigeria and the intricacies of the terms and conditions attached to this type of business, it is envisaged that a third party trader will be acting as a go-between. Even with a FOB sale, the performing vessel has to meet the major’s approval terms to enable loading at the terminal to proceed.

Further cargoes are being worked from Baltic traders for Nigerian receivers, in addition to parcels assessed from the Mediterranean, and also from the U.S. Gulf Coast.

Prices for API Group I base oils delivered into Apapa are raised because Baltic FOB levels firmed slightly, and freight rates are higher now due to increased bunker and crewing costs. These incremental costs have to be covered. With Nigerian receivers eventually agreeing to offered prices, CIF/CFR Apapa price levels increased, with indications around $1,050/t for quantities of SN150, and larger quantities of SN500 are put at $1,145/t, with SN900 priced at $1,198/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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