EMEA Base Oil Price Report


Russia nears what many see as a primary aim in the Ukraine invasion, the seizing of the Donbas industrial region in the eastern part of Ukraine, establishing a corridor between southern Russia and the Crimea which was annexed by Russian in 2014.

President Zelensky of Ukraine has vowed that his country will retake any territorial losses as time goes on, whilst asking for more and more help from Western allied nations, to be able to defend his country. Putin appears to have stepped up the pressure over the past few days, raining rockets down on Kyiv, action which hasn’t been witnessed since the beginning of the conflict.

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News that the EU finally reached an agreement on an embargo on Russian petroleum products and crude oil has been well received by most in the West, but it excluded four EU nations – Hungary, Czechia, Croatia and Slovakia – where all refineries are fed by inland pipeline systems, and hence are unable, at least in the short term, arrange alternative means of crude supply. These exemptions are to be kept under review by the EU to see if feasible alternatives become available.

This ban on imports of Russian products will have a huge effect on the quantities of base oils traditionally exported through the Baltic states of Latvia and Lithuania. Businesses built up over the years are facing collapse, and although many of these companies have Russian ownerships or sympathies with the Kremlin, the bottom line is that many buyers and end-users in mainland Europe, Scandinavia and the UK, are going to have to reconsider supply options for the future.

Base oil markets are going into a quieter time of year, when holidays and part-time working take over at many blending operations until after the beginning of September. As a result, API Group I demand has dropped away. Group II is in a much more healthy situation with demand improving, partially due to the dearth of availabilities in the Group I sector and movement to higher specifications for finished automotive lubricants. Group III markets are steady and prices unchanged from a couple weeks ago.

Crude prices have softened around $5 to $6 per barrel since the last report, but generally crude is not yet showing any real signs of weakness. Dated Brent is down to $114.70/bbl for August front month delivery. West Texas Intermediate meanwhile is at $109.50/bbl, also for August settlement, re-establishing a normal crack between with Brent.

European low-sulfur gas oil continues to trade at high levels, having risen around $10 per metric ton from our last report. European refineries cannot meet internal demand without imports, many of which previously came from Russia. These imports will decline from here on in, due to EU sanctions, but alternative supply sources will take some time to arrange before the market can calm down into a more rational mode. Prices are found at around $1,289/t, still for July front month. Low-sulfur gas oil has abandoned the normal correlation to diesel and crude values to be totally driven by supply and demand economics.

These prices were obtained from London ICE trading late June 27.


Prices for Group I exports from Europe continue to be rather nebulous, as real parcels can be seen. There is positive news that the Livorno refinery has re-started some operations, although it is not clear if base oil production has recommenced yet. There are rumors that there may be availability starting from next month. However, the export market remains extremely tight, and now that unavailability is causing buying interest to wane, it may be into September before the market returns to normal.

Prices remain difficult to assess because of this situation, and a feedstock shortage could develop due to the absence of Russian produced of gas oil and vacuum gas oil. With diesel demand high, and prices at a huge premium to crude, refiners are inclined to produce maximum quantities of fuels, and, if feedstock for base oils become more critical, this situation will only heighten the dearth of Group I base oils available for export destinations.

As indications only, prices are assessed between $1,525/t and $1,580/t for solvent neutral 150, $1,710/t-$1,795/t for SN500 and $1,895/t-$1,965/t for bright stock. 

Markets for Group I sales within Europe appear calm, and prices have stabilized over the past few weeks, there being little talk of any increases to be coming down the line from July 1. Sellers in most cases are being heard to roll over July values into July. With the holiday month of August approaching, many buyers are postponing major replenishments of inventories in favor of smaller replacement volumes to tide them over just into September. Buyers are also imagining lower prices as more material becomes available, although the absence of Russian barrels from Baltic and Black sea sources has yet to be fully assessed.

Demand for finished lubricants has also fallen, perhaps due in part to the high cost of diesel and motor gasoline, and also a downturn in movements of goods in the face of inflation.

The price differential between exports and sales within the region remains assessed at €85/t-€155/t, although the number is somewhat academic without a functioning export market. Prices for exports are lower.

Group II base oils are in demand, even as August approaches. Many blenders have shifted from Group I to Group II for their workhorse grades due to problems and increased costs for the former category.

There have been developments within the segment with demand moving ahead and the large Group II plant in Rotterdam returning to full production. Prices increased in some cases during June, although some large buyers reported receiving special discounts that are due to be reviewed at the beginning of July.

Prices are here adjusted upwards from July 1 to $1,895/t-$1,950/t (€1,788/t-€1,840/t) for 100 neutral, 150N and 220N, and to $2,095/t-$2,170/t (€1,976/t-€2,047/t) for 600N. These prices apply to a range of Group II, including products from Europe, the United States, and possibly imports from a Middle East source.

Group III prices appear to have reached a stable level. In a scenario similar to Group l, prices set for June have generally been extended into July. The latest round of increases appears to have stuck and not eroded.

Demand appears to be in line with expectations, and the halt of Russian exports 4 centiStoke grades barrels has not hurt supply. That said, 4 cSt oils are tighter than 6 and 8 cSt. Large cargoes of Group III with full slates of finished product approvals base oils continue to move from Spain to a hub in Rotterdam, including one 15,000-ton cargo reportedly loading promptly out of Cartagena. 

There are reports that a major domestic European producer of fully-approved Group III will undertake a refinery turnaround in September or October that could cost up to 60 days of production. Prices for fully approved grades are unchanged at €2,035/t-€2,060/t for 4 cSt and €2,100/t-€2,145/t for 6 and 8 cSt, all on an FOB basis.

Prices for Group III oils with partial slates of approvals are also unchanged at €1,955/t-€1,985/t for 6 and 8 cSt and €1,940/t-€1,975/t, all on an FCA basis ex Antwerp-Rotterdam or Northwestern Europe.

Baltic and Black Seas

The refined announcement that EU states will place sanctions for a near total ban Russian crude and petroleum products, with riders for all contracts to complete prior to Feb. 23 next year. This will affect European and allied nations’ imports of Russian base oils, which have predominantly flowed through various terminals in the Baltic.

Although base oils do not claim to form a large part, either in volume or financial terms, compared to crude and other petroleum products coming out of Russia, the effects will be felt by suppliers, blenders in Europe, and traders who have traditionally bought large cargoes for export destinations in West Africa, Middle East, India and South America. This last aspect needs clarification in that if material being purchased from Russian producers, and which is not going into an EU country may still be considered. However, the European ban affects shipping, insurance, and banking payments, all of which may not be straightforward.

The U.K. and Scandinavian nations not part of the EU will adopt the same principles in terms of a ban on Russian material.

However, one specter has emerged – that being that train lots of base oils that are produced at various Lukoil refineries are currently transiting through Lithuania into Svetly in Kaliningrad. Lithuania declared that it is enacting the EU ban where all outlawed materials such as steel and iron ore has meant that trains are stopped at the Kaliningrad border and are searched for banned materials. Assuming that the petroleum products ban will also mean no base oils are allowed to transit through Lithuania, that could pose a huge problem for the Svetly operation and continued loading of base oil cargoes from Kaliningrad.

Alternatives could be sea-fed cargoes out of Russian ports such as Vyborg in the Gulf of Finland, or St. Petersburg; however, the Kremlin has made it clear in no uncertain terms that the transit of Russian goods should be continued through Lithuania. The stand-off continues for the moment.

Trade out of Kaliningrad continues, with one cargo of 5,000 tons supposedly loading this week for Rotterdam, and yet another inquiry for the first half of July regarding 7,000-10,000 tons from another Baltic port, presumably, Riga, to load for Apapa port in Nigeria. These are the only potential cargoes identified moving out of the Baltic and “indication only” FOB price levels are maintained, with the assessment for SN 150 at $1,475/t-$1,535/t and SN 500 indicated at $1,675/t-$1,725/t. Indications for SN 900 would be around $1,765/t-$1,795/t.

In the Black Sea region, Turkish base oil buyers generated a number of inquiries from strange locations, such as from South Korea, Thailand, Mumbai and Singapore. Whether any of these cargoes will get delivered into Gebze and Derince is highly unlikely since these parcels are all very small, and the freight element would place CIF prices so high that these cargoes would not be economically feasible. However, in Turkey anything must be deemed possible after the latest Tupras prices were announced last week, with Group I SN 150, SN 500 and bright stock all at levels above $2,100/t ex refinery. Prices have been converted to USD equivalent for the purposes of comparison but are sold locally in Turkish lira.

It is also not clear if Turkey will adopt the EU ban on Russian crude and petroleum products, which would include base oils being sold out of the Sea of Azov or delivered into Gebze. Buyers in Turkey have been getting supplies from Uzbekistan, Iran and Iraq, most of which is delivered in trucks coming cross borders. 

No cargoes are identified coming out of the usual Mediterranean ports for Turkish receivers in Gebze and Derince, and it may be some weeks before Livorno can offer material into this market. An enquiry for an STS in August in Sicily the going into Derince has been noted, but why STS is not clear. The Greeks appear to have emptied out, with a 5,000-ton parcel going into the U.S. Gulf, which is an oddball movement for a cargo of Group I to go in that direction, and believed to be at high prices.

Prices for future supplies out of Livorno and Aghio are both expected to be based on the FOB highs of published prices, plus a possible premium, plus freight. This would suggest that CIF levels for SN150 and SN 500 and 600 would land at around $1,755/t for SN 150 with SN 500 at around $1,895/t CIF Gebze.

Imported Group II grades sold FCA in Turkey remain as per replenishment costs during June. Prices ex-tank are maintained at €1,925/t-€1,975/t for the three lower vis products, with 600N at €2,050/t-€2,145/t. Group III base oils being sold on the same FCA basis, for partly-approved grades, remain priced between €2,135/t-€2,175/t. Fully approved Group III grades from Spain are expected to be around €2,200/t-€2,275/t. A small parcel of around 1,400 tons will load with fully approved Group III grades for discharge into Gebze during the first week of July.

Middle East

Red Sea reports one confirmed Yanbu cargo with 5,000-6,000 tons going into Durban, adding another parcel being sent from Saudi Arabia to South Africa. There are other inquiries that assume cargoes into Fujairah and Jebel Ali in the United Arab Emirates and also a parcel of more than 5,000 tons moving from Yanbu to Alexandria. It is not apparent if this is bright stock for Egyptian General Petroleum Corp.

A number of cargoes are offered out of Hamriyah, in various sizes from 2,000 tons up to 5,000 tons, but most of these offers appear to be flaky. Some local sources in the U.A.E. comment that there is very little quantity in tank in Hamriya and that they are planning replenishment stocks from Iran in small lots feeding into the tanks in Sharjah. It is presumed that the grades involved are Group I SN 150 and SN 500. It would appear from shipping reports that the 9,000-ton parcel from Hamriyah did not happen, although sources in the U.A.E. have confirmed that this quantity never existed.

Group I cargoes still arrive into the U.A.E. in relatively small quantities from Thailand. These supplies are loaded out of Rayong with small parcels of Group I grades. These cargoes are in addition to larger supplies from Yanbu and Jeddah in the Red Sea

Large quantities of Group III base oils are moving out of Sitra and Al Ruwais, in addition to the gas-to-liquid Group III+ coming out of Ras Laffan for various affiliates in the Shell system.

Netbacks for Group III base oils coming out of Al Ruwais in the U.A.E. and Sitra in Bahrain are maintained, after no further increases were heard from either of the producers. Netbacks are therefore maintained and are assessed at $2,225/t-$2,295/t for the range of 4 centiStoke, 6 cSt and 8 cSt partly-approved Group III base oils.

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

Group II base oils FCA U.A.E. are supplied from European, U.S, Asia-Pacific and Red Sea producers. These grades are traded or resold ex-tank, or sometimes on a delivered basis within the Middle East Gulf, most of the use being taken up in the U.A.E. Prices are maintained this week although July 1 may bring increases. These will be assessed in the next report. Prices remain at $1,825/t-$1,865/t for the light vis grades, with 500N and 600N at $1,955/t-$1,995/t.


South African shipping sources informed of another large combination cargo that commenced loading last week out of Rotterdam and Fawley. The cargo is a total quantity of 33,000 tons of various base oils and some easy chemicals for receivers in Durban, then to Dar-es-Salaam, with final discharge in Mombasa.

Nigerian enquiries are few, but with one Baltic requirement for 7,000-10,000 tons, thought to be loading out of Riga during the first half of July, this appears to be the only possible option at this time. Other traders are looking to take another large parcel out of either the U.S. Gulf Coast or U.S. East Coast, from Paulsboro. This quantity could be at 15,000 to 18,000 tons of three Group I grades: SN 150, SN 500 and SN 900.

What is not clear is Nigerian receivers’ attitudes and positions on accepting Russian export barrels. Some reports mentioned that many buyers in Nigeria are not keen to take Baltic barrels. Then again, if there are no official sanctions on traders taking these supplies out of the Baltic, and shipping is not a problem, as P&I Clubs accept Russian cargoes, then there is only the moral reasoning behind making such a trade. Also, there are very few alternatives to getting hold of export sized cargoes of Group I base oils at this time, although that may change over the next few months.

CIF/CFR prices were updated following the last U.S. cargo and are maintained since there have been no further identified cargoes.

Levels are placed at around $1,695/t-$1,725/t for smaller quantities of SN 150, SN 500 is priced at around $1,750/t-$1,785/t, and SN 900 is at $1,800/t-$1,855/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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