EMEA Base Oil Price Report


The summer holiday period appears to have started, as many players throughout Europe and the Middle East were missing from their desks this week. With this rather early exodus, trade has slowed and will possibly slow down even more as the calendar turns to August.

There was consensus among market sources that buying and replenishment of some very low inventories will not begin until September. Signs suggest the fourth quarter will be weaker than in recent years, with greater availability of all main base oil groups and with sellers actively looking to sell material into both domestic and export markets.

This scenario, coupled with weakening economic fundamentals, could lead to sellers becoming more aggressive to re-establish market share and cause downward pressure on prices. Buyers are anticipating that availabilities will be more than sufficient to cover all demand across Europe, the Middle East and Africa.

There are early signs and perhaps a glimmer of hope, that hostilities in Ukraine could start to lessen after an accord between Ukraine, Turkey and Russia to allow grain shipments from some southern Ukrainian ports such as Odessa.

All economic indicators are pointing to at least a slow-down in trade and production of all goods and services across Europe and beyond, coupled with a global inflationary effect due to a number of factors, not least being the war in Ukraine and coronavirus regulations adopted by China, both of which have made large contributions to supply chain disruption and rising prices for almost all materials and transportation.

The European Union embargo on Russian energy derivatives has yet to have a major effect, but that will happen as soon as winter sets in and demand for heating starts to impinge on all. Europe is at least taking steps to access alternative supplies of liquid natural gas and diesel, since without these “top-ups” there could be rationing or allocation of available supplies.

Base oils have been protected by a ramp-up in refinery run rates as fuel producers work to bridge the gap that will be left by a halt in Russian imports, which are due to be largely phased out prior to February next year.

This means availabilities will improve as API Group I production comes back to full speed, Group II availabilities possibly improving after suppliers in the United States finished laying away against the U.S hurricane season defenses completed, and the Group III segment continues to enjoy high production rates in Europe and regular imports from the Middle East Gulf and Asia-Pacific.

Dated Brent crude prices have marked time since the last report, hovering around $104 per barrel. This crude did dip below $100, but has now rebounded to $104.30/bbl for September front month settlement, creating a large crack of some $8 between itself and West Texas Intermediate. WTI has weakened by some $5 to $96/bbl, now also for September front month.

Low-sulfur gas oil demand in Europe has softened as the region signs new supply agreements to replace Russia origin material that had contributed to a large part on the region’s supply. Values fell steeply the past couple of weeks to $1,040 per metric ton, now for August settlement, the lowest price since February, prior to Russia’s invasion of Ukraine. Prices are around $150/t lower than the last report two weeks ago.

These prices were obtained from London ICE trading late July 25.


European Group I export prices are starting to reflect an easing of availability problems that dogged this sector of the base oil market. With more material around and demand being curbed during the summer recess, prices have slowly started to react, and a few sellers have targeted buyers with capability to put together prompt firm deals for larger parcels of a combination of Group I grades.

There has been no update on the news from Eni about resumption of base oil production at its refinery in Livorno, Italy, and subsequent availability of the three grades made at this location. Fuels production has restarted, and the company planned to start the vacuum unit to enable production of base oils with availability possibly by next week. News is awaited. 

Prices for Group I solvent neutral 150 are reassessed at between $1,365/t and $1,425/t, while SN500 has dipped to $1,445/t-$1,610/t and that once rare commodity bright stock is at $1,595/t-$1,655/t. It must be emphasized that values are moving relatively speedily and could change further in a matter of days rather than weeks. At the same time, the absence of so many traders reduces opportunities to move more cargoes.

Group I business within Europe has started to run down for the holiday period, which officially starts on Aug. 1. However, perhaps because of falling demand for finished lubricants, many blending operations are commencing maintenance programs earlier than normal. Buying activity has slowed, and there are no frantic discussions this week regarding August prices, with many buyers delaying purchases. 

The differential between prices for sales within the region and exports has swelled due to reductions in the latter and is now assessed at €160/t-€255/t.

Group II base oils price levels are described as stable and the market relatively balanced. There are rumors of increasing quantities of U.S. production coming across into the European markets, but there has been no evidence of this activity either U.S. sources or from shipping reports.

The exchange rate between euros and dollars has relented a little as the euro gained to $1.03. This has had marginal effects on euro prices, many of which did not move when the currencies reached parity. Prices for August may reflect small changes and are at $1,850/t-$1,890/t (€1,805/t-€1,845/t) for 100 neutral, 150N and 220N and at $2,085/t-$2,130/t (€2,034/t-€2,078/t) for 600N.

These prices apply to a range of Group II oils from Europe, the U.S. and possibly from a Middle East source.

Group III base oil prices remain steady for August, which is understandable given that demand will fall off this month until players return to office in September. There is little evidence of any pressure to move prices in either direction, with sellers apparently content to maintain things as they are as crude and feedstock levels retreat to provide a buffer for covering of raw material costs.

Demand remains strong even approaching August, and after a halt to imports of 4 centiStoke barrels from Russia’s Tatneft, availability of that grade is tightest in the Group III segment. Group III markets could start to shorten as Neste’s plant in Finland is scheduled to begin a maintenance turnaround in September, but the operator has stocked up to cover the period of production loss. 

Prices for Group III base oils with partial slates of finished lubricant approvals are massaged slightly on evidence from third quarter offers containing prices of €1,955/t-€2,000/t. Values for 6t and 8 cSt are at €1,965/t-€2,000/t, while 4 cSt is at €1,955/t-€1,985/t, all on an FCA basis ex Amsterdam-Rotterdam-Antwerp or Northwestern Europe.

Group III oils with full slates of approvals have also been tweaked to €2,010/t-€2,035/t for 4 cSt and €2,115/t-€2,145/t for 6 and 8 cSt.

Baltic and Black Seas

In the Baltic, the Lukoil operation out of Svetly port in Kaliningrad does not appear to be affected much by the EU embargo and still ships cargoes to contracted buyers in Antwerp-Rotterdam-Amsterdam. These contracts are not confirmed by buyers, but sales FCA may be classed as contract sales on the basis that these supplies have been made over some period of time.

Some buyers in Benelux countries have protested to EU regulators in Brussels saying that they hold formulations based on using Russian base oils, and that alternative suppliers can not meet the conditions of those formulations. This seems a very weak argument since additive suppliers or blenders own chemists can adjust formulations by adjusting additive treat rates.

Cargoes of Russian export base oils have slowed or ceased from many Baltic terminals. There are few shipping enquiries in the market for vessels to load and discharge into northwest Europe, Scandinavia or the United Kingdom. The movement of base oils through Lithuania appears to have been resolved with material still arriving by rail into Svetly terminal, on the basis that material being trans-shipped or bridged through Lithuania (an EU state) is not going into the EU (unless contracted and which will end by Feb. 23, 2023); therefore,  n the land supply into Kaliningrad should continue.

The cargo for Nigeria will yield FOB prices eventually, although the levels indicated previously no longer hold validity. They are reassessed, with SN 150 now at $1,320/t-$1,375/t, with SN 500 indicated at $1,400/t-$1,460/t. Indications for SN 900 would have been around $1,495/t-$1,525/t.

Black Sea region reports that there are still supplies of Russian base oils coming out of Azov and being delivered into Turkish receivers. Turkey has not announced any ban or embargo on Russian products, and therefore buyers in Turkey are able to lay their hands on relatively low-priced Group l base oils.

Turkish buyers continue to take material overland from Iran, Uzbekistan and, according to sources, from Iraq. All deliveries are made by truck, cross borders where there are no import records. Tupras in Izmir continue to confound, with production of base oils having stopped once again. How long this cessation of production will last is guesswork. Sources is Istanbul have confirmed that purchases can still be made from storage, but the prices are so inordinately high that blenders in Turkey cannot afford to use these supplies.

Turkish inflation rages and is now at amazing levels, with some reporting agencies giving rates of 170%. Officially according to government press announcements levels are around 68%.

The reported Lukoil cargo from Kaliningrad is the only confirmed large cargo going into Turkey, along with some smaller parcels of Group II and Group III base oils going into Gebze and Derince.

While no cargoes have come out of Greek or Italian ports for Turkish receivers, there are still inquiries from Turkish importers to request for material to load from Livorno. More may be disclosed on this operation prior to the next report, after confirmation that base oils are once again flowing from Livorno.

Suggested CIF levels for SN150 and SN 500 and 600 are around $1,475/t for SN 150, with SN 500 at around $1,585/t CIF Gebze.

Imported Group II grades supplied FCA Turkish storage either by traders or by appointed distributors remain unchanged, with prices ex-tank 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 sold on the same FCA basis, for partly-approved grades, remain at €2,135/t-€2,175/t. Fully approved Group III grades from Spain are expected to be around €2,200/t-€2,275/t.

Middle East

Red Sea reports indicate around four shipping enquiries for various fixtures to trade cargoes of base oils out of Yanbu and Jeddah. These cargoes range from 3,000 tons for Egypt to 17,000 tons for two vessels to load for the west coast of India and another for the United Arab Emirates.

Middle East Gulf markets still show two-way trading for exports and imports of Group l base oils. Exports include a parcel of 3,500 tons that loaded out of Hamriyah for Mumbai anchorage. This material will certainly be Iranian SN 500+ base oil that was bridged into and stored in Sharjah.

There has been no further identification or news on the French cargo which loaded apparently out of Limas, with 8,400 tons of base oils for receivers in Hamriyah. Local sources in the U.A.E. have no knowledge of such as cargo, so they can shed no light on this fixture. Inquiries are being made in shipping circles, but due to holidays this is taking some time. Smaller Group I cargoes are still forthcoming from Thailand for receivers in Jebel Ali and Hamriyah.

No new Iranian cargoes evolved after the quantity of Iranian Group I base oils from one of the southern Iranian ports. The total cargo was around 11,000 tons. The cargo was to discharge into Hazira and Mumbai.

Group III base oil cargoes continue to load out of Al Ruwais and Sitra, although it has been reported that Ras Laffan has a downturn in quantities of gas-to-liquid Group III+ base oils because of the lack of demand in main markets such as Germany.

Netbacks for Group III base oils out of Al Ruwais in the U.A.E. are maintained, following no announced increases that have been confirmed from producers or distributors. Netbacks are assessed at $2,225/t-$2,265/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.-sourced from European, United States, Asia-Pacific and Red Sea are resold ex-tank, or on a delivered basis within the Middle East Gulf, with most of the material utilized in the U.A.E. Prices are maintained at previous levels at $1,825/t-$1,865/t for the light vis grades, with 500N and 600N at $1,955/t-$1,995/t. These grades are often resold in dirhams, which is the local currency.


South African news is extremely limited this week, with shipping sources only identifying one large cargo of base oils for a major. That is going into Durban, loading during the first half of August out of Rotterdam and Fawley.

Nigeria has gone into quiet mode, with two cargoes on the high seas arriving during the first couple of weeks in August, The first cargo loaded out of Riga in the Baltic with 10,000 tons of Russian base oils, and the other loaded out of a major’s facility in Rotterdam, with 9,000 tons of Group I base oils.

Another 10,000 tons is to load out of the Baltic from Lukoil, while there is another inquiry for 10,000 tons to load from the west coast of India, sailing to Lagos. This cargo does not appear to be feasible from an economic point. Also, the selling of Group I grades from India does not compute, since this market is short of Group I supplies, Indian receivers having been dumped by producers in the U.S. Gulf for alternative supplies into West Africa.

Baltic prices were indicated but remain unconfirmed.

CIF and CFR levels are reassessed and indicated at around $1,575/t-$1,620/t for quantities of SN 150, SN 500 is priced at around $1,685/t-$1,725/t, and SN 900 is assessed at $1,720/t-$1,755/t. As an indication, only bright stock may be landed at around $1,795/t C&F Apapa.

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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