EMEA Base Oil Price Report


Base oil trading has slowed almost to standstill in many parts of the market as the region sinks into holiday season. Buyers are simply not positioned to participate in any selling activity being promoted by refiners, even though the latter would prefer to draw down on storage rather than carry large inventories through August and September.

There is very little purchasing interest from the buying fraternity since many players are away from their offices and those remaining see a weakening market. Crude and feedstock prices are falling, exerting downward pressure on base oil values.

This situation is causing a build-up of inventories in producers’ storage, in turn making producers more keen to move material now.

Availability is generally good with only a few exceptions, such as API Group III 4 centiStoke oils, since the European Union stopped importing that product from Russia. The Group I situation has reversed from earlier in the year when several maintenance turnarounds helped tighten availability. Extended downtime at Eni’s plant in Livorno, Italy, also contributed, but the facility restarted and is resuming sales this month.

Group II remains in balance, with demand waning this month but perhaps preparing to pick up in September. Group III, apart from the 4cst grade, is stable from a supply perspective and is predicted to remain so through the end of the year. With inflation and costs rising across the board in all regions and countries, the outlook is rather depressing for the rest of this year and perhaps for 2023 as well, Financial forecasts are that global economies are going to get worse before they start to improve towards the end of next year.

The overall gloomy picture being painted by economists and politicians has been exacerbated by the Russian invasion of Ukraine and its interruptions of supply chains. But that war in Ukraine has not been the sole cause of global problems, which may have surfaced in any case.

Crude markets are quiet as vacation season continues. Prices for dated Brent crude have fallen below $100 per barrel for the first time in months and are at $94.70/bbl, now for October front month settlement, substantially below the value quoted two weeks ago. West Texas Intermediate has fallen to $88.70/bbl, for September settlement, the lowest levels since the Ukraine invasion in late February.

Low-sulfur gas oil in Europe settled back below $1,000 per metric ton on softer demand and improved availability. At $947/t for August front month, the price is $100 lower than last posted. These prices were obtained from London ICE trading late Aug. 8.


Group I exports from Europe are static as few buyers in export destinations are looking for large cargoes. Suppliers are starting to look at September trades where they envisage that traditional receivers in areas such as West Africa and South Americas will return to the market looking for substantial quantities to bolster flagging inventories. With more material available, there may be competition in Group I markets.

The Livorno refinery appears to be back in production, lending a long awaited boost to the European Group I supply scene. Grades are forecast to be available during August, and a number of potential buyers are already knocking at the door, looking for barrels this month or next. It remains to be seen what pressures these factors exert on prices after this month.

Prices are assessed between $1,345/t-$1,395/t for solvent neutral 150 and $1,420/t-$1,485/t for SN500, both on an FOB basis. Bright stock has become freely available from the handful of suppliers who produce this grade and is at $1,555/t-$1,620/t.

Group I trading within Europe is very quiet, with many blending plants undergoing maintenance of varying degrees. Many personnel are away from their desks, and some will not return until early September. Those still working are waiting to see the effects of lower crude and feedstock costs, but many have said that they cannot wait another month.

Blenders have been given notional August prices that will remain in place until Sept. 1. These prices have basically rolled over from July due to the lack of trading activity. Some sellers are predicting an upturn in demand come September, but buyers are taking a relaxed stance, arguing that fundamentals are weakening.

Some buyers are trying to move towards export numbers, stating that they may be in the market to buy substantial quantities in September, not unlike the quantities normally associated with export sales.

The differential between prices for exports and sales within the region decreased this week to €45/t-€80/t, the latter being higher.

Group II prices are steady as supply and demand appear balanced. Similarly to the Group I scene within Europe, Group II supplies this month are routine rather than exceptional, with buyers only taking small quantities of material, seeing that the market may be weakening and that future prices may come off substantially over the coming weeks and months.

The exchange rate between euros and dollars has been the real driving force in maintaining prices at higher levels, however there are substantial pressures building to have prices lowered. It is anticipated that when prices are negotiated for September forward, the market will see considerable adjustments to Group II numbers with buyers pushing hard to gain discounts and ultimately lower prices. Also, given that Group I availabilities have improved, will also increase pressure on Group II prices with buyers having the option to move back to Group I.

Prices are adjusted slightly lower, even given the exchange rate problems, Prices are assessed between $1,835/t-$1,875/t (€1,786/t-€1,825/t) for 100 neutral, 150N and 220N and $1,995/t-$2,075/t (€1,942/t-€2,020/t) for 600N.

These prices apply to a range of Group II oils from Europe and the United States along with potential imports from a Middle East source.

Group III base oil prices are stable with little to no changes in prices announced for August. Demand is slack during this month, and activity will only return in September, during which prices will be established for the fourth quarter.

Demand will be weaker over the next few weeks, with industry experts calling for lower estimated growth for Group III base oil offtake through the rest of the year due to the current economic climate on the global stage. With a large turnaround on the horizon for a major producer of fully approved Group III base oils, there may be some effects of a shortened supply scene around the market. The interesting part is that around the same time as the turnaround, the producer will lose the current approvals on the grades, with the  new incumbent supplier has announcing that they will not be re-applying to have the approvals replaced.

This will effectively mean that only one fully approved producer will be in the European Group III market.

Prices for Group III oils with partial slates of finished lubricant approvals are unchanged at €1,950/t-€1,990/t for 6 and 8 cSt and €1,945/t-€1,985/t for 4 cSt, all on an FCA basis ex Amsterdam-Rotterdam-Antwerp and Northwestern Europe. Values for Group III oils with full slates of approvals are also stable, although showing some small downward changes to €1,995/t-€2,025/t for 4 cSt and €2,100/t-€2,130/t for 6 and 8 cSt.

Baltic and Black Seas

Baltic activity has been dealt a huge blow by the EU embargo on the importation of all Russian crude and petroleum products, which obviously includes base oils.  Lukoil’s operations out of Svetly and also Riga continues to load cargoes for receivers in Turkey and also in the United Arab Emirates. Why these cargoes are being loaded out of the north, and not from Limas terminal in Turkey is odd, although the supply into the Baltic terminals may be coming from northern third- party Russian refineries. Antwerp-Rotterdam-Amsterdam shipments appear to have stopped, although the ‘contract’ clause may be adopted to continue supplies into regular buyers in Antwerp-Rotterdam-Amsterdam.

Cargoes of Russian export base oils slowed or ceased from many Baltic terminals. It would appear that some buyers in the United Kingdom have turned to Polish suppliers in Gdansk for replacement barrels for Russian exports taken in the past. A cargo of 5,000 tons from Gdansk loaded for Antwerp-Rotterdam-Amsterdam and the west coast of the U.K. Some of the traders and distributors are trying to develop trades out with the EU, with markets such as South America canvassed as alternative destinations for Russian export barrels.

The movement of base oils through Lithuania continues, with material 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. Cargoes are prepared to move to the Middle East Gulf, and Central and South America, where demand for Group l is thriving.

FOB prices from the Baltic are harder to establish, with only one supplier functioning in the market. SN 150 is now indicated at $1,310/t-$1,365/t, with SN 500 indicated at $1,380/t-$1,445/t. Indications for SN 900 would be around $1,475/t-$1,495/t.

Turkey and the Black Sea region report that Russian base oils continue to load out of Azov and are delivered into Turkish receivers, but are also bridged through Limas terminal, before being reloaded on to sea-going vessels for receivers in the Middle East Gulf, Singapore and South America. The material discharged into Limas terminal is carried on Volga River class vessels. They hug the Black Sea coastline from Sea of Azov to Marmaris, then discharge into shore tanks. Turkey has not yet announced any ban or embargo on Russian products.

In addition to Russian barrels, Turkish receivers are also taking Iranian base oils that are trucked into Turkey from refineries in Iran. Most of this material comes out of Sepahan refinery.

Tupras reduced their prices during last week, but it is not clear if they have restarted production of base oils at Izmir refinery. Sources in Istanbul indicated that purchases of Group I base oils can still be made from storage; however, blenders in Turkey suggested that they cannot take Tupras’ product because the prices are still too high compared to Russian, Uzbek or Iranian base oils.

Most of the Turkish operations are closed down for August, with only a few of the usual contacts available.

Italian suppliers from either Augusta or Valencia will take a cargo of around 6,000 tons of Group I grades into Gemlik and Gebze ports, and there are inquiries from Turkish importers for material to load out of Livorno. Turkish receivers are looking to take material from Livorno in September. Targeted CIF levels from buyers for SN150 and SN 500 and 600 are around $1,400/t for SN 150, with SN 500 at around $1,525/t CIF Gebze.

Imported Group II grades supplied FCA Turkish storage by traders or distributors are maintained 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. It was suggested that these prices will remain for August when business is slow but will be reviewed at the end of this month for September.

Middle East

Red Sea reports indicate only one new cargo to be loaded out of Yanbu in September with 8,000 tons in total going into three ports: Aqaba, Alexandria and finally Gebze. This cargo will consist of Group l base oils, with bright stock going into Alexandria and SN 150 and SN 500 going into Gebze.

Middle East Gulf markets show further “two-way” traffic with Group I material exported from Hamriyah, while at the same time Russian export barrels are loading out of Riga in the Baltic and also from Limas in Turkey for receivers in the same port of Hamriyah. A cargo of 12,000 tons will load out of Hamriyah for La Plata in Argentina. This is a large quantity of what is thought to be Iranian SN 150 and SN 500. The economics of these trades would be interesting, for it is hard to see why sellers would export Group I base oils from the U.A.E., while at the same time importing 5,000 to 6,000 tons of Russian barrels. There have been a number of other Middle East Gulf exports from Hamriyah of Group I base stocks, the latest moving to Mumbai anchorage and Hazira.

The load port of Limas identified in the last report was erroneously sited in France, when in fact the Limas referred to is a terminal in Marmaris in Turkey, used by Lukoil to bridge base oils from the Volga region to deep sea locations worldwide.

Group III base oil cargoes loading out of Al Ruwais, Sitra and Ras Laffan continue to be exported to Asia-Pacific, Europe and the United States.

Netbacks for Group III base oils out of Al Ruwais in the U.A.E. are maintained for August, following no increases from producers or distributors. Netbacks are assessed at $2,225/t-$2,265/t, for the range of 4 cSt, 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 resold FCA U.A.E. are sourced from European, U.S, Asia-Pacific and the Red Sea. These base oils are resold ex-tank, or on a delivered basis within the Middle East Gulf, most of the material remaining in the U.A.E. Prices are maintained at $1,825/t-$1,865/t for the light vis grades, with 500N and 600N at $1,955/t-$1,995/t.


West African reports contain news of a larger than normal cargo going into Tema in Ghana. Around 9,000 tons of Group l base oils SN 150, SN 500 and bright stock will form the cargo. Normally only 5,000 tons in total with three grades of Group I base oils would go into Tema as part of the tender, but extra storage must be available to take this larger quantity.

Nigeria has two cargoes presently arriving in Apapa – the first loaded out of Riga with 10,000 tons of Russian base oils, the other loading was out of a major’s facility in Rotterdam with 9,000 tons of Group l base oils.

A further 10,000-ton cargo is loading out of the Baltic from Svetly terminal, although this parcel has gone quiet, with no vessels identified to take this cargo to Lagos. The flaky inquiry for 10,000 tons to load from the west coast of India to sail to Lagos has disappeared. That cargo was not feasible on an economic basis, and the selling of Group I grades from India would not make sense, with that market being short of Group I base oils.

CIF/CFR levels are maintained as per last and are 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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