EMEA Base Oil Price Report


Markets in Europe, the Middle East and Africa are relatively quiet and could get quieter as some observers forecast demand to fall off rapidly during the fourth quarter.

Supply dynamics for all types of base oil have radically altered from the first half of this year, when API Group I was particularly tight and export cargoes were missing from the market. Now availability has increased from almost all producers, and most of the production that was lost or missing from the European market has returned. There are very few serious buyers, however, especially in the Group I export scene, where many of the traditional destinations have low demand indications.

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The Ukrainian appears no closer to resolution after Russian President Vladimir Putin’s annexation of four regions, following sham referenda. Ukraine has announced that it will re-take all territories annexed by Russia, and this – along with Russia’s call-up of 300,000 more troops – suggests a longer war than might have been anticipated a couple of months ago.

The war is indirectly affecting the global scene, contributing to the inflation that is buffeting the world and in turn hurting supply chains for raw materials and foodstuffs.

Base oil prices are under considerable downward pressure from buyers, who sense that demand is much lower and that producers, even after cutting run rates, are still holding considerable inventories of all types of base oil. Group II prices are heard to have come under pressure as large parcels are being made available from the United States and Asia-Pacific. The only limitation on taking advantage of all the open arbitrages appears to be prohibitive freight costs, which rose sharply over the past couple months.

Those rates are stemming the flow of base oils into areas such as West Africa and the Middle East Gulf, where buyers are looking for lower prices but are being offered ever increasing numbers for cargoes sold on CIF or CFR bases, purely due to the freight element. FOB levels have fallen dramatically, encouraging buyers to search for deals, only to find that delivered rates are higher than some months back.

Crude oil prices have perhaps found stability since they have changed little the past month and have almost returned to pre-invasion levels. Dated deliveries of Brent crude are now at $89.45 per barrel, now for December front month settlement, almost exactly the same level as two weeks ago. West Texas Intermediate has followed a similar pattern and is at $84.20.bbl, still for November front month.

Low-sulfur gas oil prices dipped suddenly and then recovered to higher levels. Demand normally starts to increase around this time of year at the onset of heating season. Although gas is the predominant fuel for domestic use across Europe, gas oil is still used in larger commercial and industrial plants. Alternative supplies of this fuel are now filtering through the market to end dependence on Russian imports. The published price is at $1,024 per metric ton, still for October settlement. These prices were obtained from London ICE trading late Oct. 3.


European API Group I export prices continue downward, with buyers throwing counters at every offer to try to offset shipping rates. With greater availability comes the flexibility to move around the market to achieve optimum prices from various suppliers. Some sellers have dug in their heels and are redirecting material into the domestic market, where returns are more attractive.

Producers across the board are trying to balance inventories to avoid being stuck with large quantities of material going towards the end of the year. Most producers are trying to avoid a year-end sale when prices are subject to heavy discounting to move quantities in a prompt and timely manner.

Export markets such as West Africa, and Nigeria in particular, have almost stopped purchasing large quantities of base oil due to various factors explained below. South Africa remains buoyant, with large quantities of all types of base oil being imported on a regular basis, but this region is largely controlled by the majors and their distributors.

Prices for European Group I exports have fallen to between $1,175/t and $1,220/t for solvent neutral 150 and $1,255/t-$1,285/t for SN500, both on an FOB basis. Bright stock has also seen lower numbers in offers and prices dipping to $1,340/t-$1,385/t.

Prices for Group I sales within Europe have not been subjected to the same pressures as the export markets, since freight rates – other than for barge transportation – do not figure in this segment. Buyers are still finalizing prices for this month, since sellers arrived at the negotiating tables last week with offers deemed to be too high. Some returned lower offers that were accepted, but some large blenders are still seeking markdowns.

There still has not been a substantial move by buyers to purchase large quantities of material, since they believe there is no shortage of material in sellers’ tanks. The exchange rate remains a problem for all sales conducted in euros, which have fallen below parity with the dollar. Sellers say they cannot discount for exchange rate anomalies, and that they will price offers against dollar values. Hence euro prices have seen some impetus from the exchange rate moving numbers to higher levels than they would otherwise be.

The differential between prices for exports and sales within Europe rose this week as export levels came under pressure. The differential is now assessed at €120/t-€195/t, exports being lower.

Group II base oil prices have succumbed to marginal decreases that took the form of “specials” or volume allowances and so on. Prices have started to erode, perhaps partly due to the large differential between Group II and Group I levels. Buyers have adopted a hard line on prices from the beginning of October, believing that the markets are trending weaker and that the last quarter of this year will see demand struggle, with declining sales of finished lubricants in almost all markets across the region

Forecasts are that demand will not return until at least the second quarter of next year, and only then if inflation and costs are brought under control in the main markets throughout Europe and beyond. The hope is that the war in Ukraine will end and many of the factors behind inflation will then be eliminated, but many sources think these forecasts are made more in hope than actual data.

Prices for Group II base oils fell to $1,610/t-$1,675/t (€1,571/t-€1,635) for 100 neutral, 150N and 220N and to $1,755/t-$1,820/t (€1,713/t-€1,777/t) for 600N. The euro prices are purely based on the exchange rate of the day, and do not reflect actual selling prices.

These prices apply to a range of Group II oils from Europe, the U.S., Asia-Pacific and the Middle East Gulf.

Group III prices are relatively stable, but from Oct. 1 there have been some moves to placate buyers with lower net prices. Sellers are concerned that demand will start to crumble during the last part of the year, so protecting market share appears to be the number one priority for producers and distributors in all regions of the globe. There is no doubt in many minds that the winter will be a difficult time for demand to hold up, and with that in mind Group III sellers are trying to shore up sales as best they can, protecting existing business and their customer base. 

Some players are suggesting that any downturn in the Group III market may be offset by increases in offtake for these grades, which may come about due to new specifications being released over the next few months. The long-term outlook for Group III is still positive, but it may not kick in until later next year.

The maintenance turnaround at Neste’s Porvoo, Finland, refinery is thought to have finished and normal production resumed. Chevron took over that output under a long-term supply agreement and now sells Group III in the European arena.

The other Western and Central European producer of Group III base oils, located in Spain, will have moved almost 50,000 tons of material during September. Material is being sold to receivers in locations such as Turkey, western France and Italy, in addition to large parcels loading out of Cartagena, Spain, for storage and hub distribution in Rotterdam 

Partly-approved 4 centiStoke material remains priced below selling levels for 6 centiStoke and 8 cSt grades, due to lower demand for that grade throughout Europe.

Prices for Group III oils with partial slates of approvals are down slightly from Oct. 1, to €1,845/t-€1,875/t for 6 and 8 cSt and at €1,820/t-€1,845/t for 4 cSt, all on an FCA basis ex Antwerp-Rotterdam-Amsterdam and Northwestern Europe.

Group III oils with full slates of approvals also tipped to €1,895/t-€1,925/t for 4 cSt and to €1,900/t-€1,955/t for 6 and 8 cSt.

Baltic and Black Seas

Baltic Sea activity is missing this week, with no reported cargoes issuing from that region. The only base oil movement was a 3,000-ton composite cargo that loaded out of Gdansk and is going into storage in Riga. This perhaps sums up the lack of Russian export barrels coming through the Baltic ports, such as Riga, Liepaja and Klaipeda. Even the terminal at Svetly in Kaliningrad has shown no movements, with no vessel inquiries for October as yet and a lack of activity. Also, a cargo that originated in the Black Sea sailed for discharge in Antwerp-Rotterdam-Amsterdam. Logistically, this provision from Lukoil would normally have sailed from Svetly, but instead loaded out of Limas terminal in Turkey.

An additional cargo loaded out of Gdansk for receivers in Antwerp, these two movements being the only Baltic activity recorded.  There were no reported cargoes loading out of Kaliningrad for the past five weeks, perhaps suggesting that there may be problems in supplying base oil to Svetly terminal. Those supplies have to transit through Lithuania.

FOB Baltic prices refer only to Gdansk material. Prices for this port are placed in line with European mainland levels and as indications, only SN 150 is placed at $1,175/t-$1,220/t, with SN 500 indicated at $1,255/t-$1,285/t. There are no prices available for Russian exports from Baltic ports.

Contrary to the Baltic regions, the Black Seas and environs have seen a great deal of activity, with cargoes bridged from the Volga into Limas terminal in Marmaris. Also, a 6,000-ton cargo may load out of Taganrog in the Sea of Azov for buyers in Gebze. Gebze is also mentioned for cargoes from the United States, and also for a parcel of Group III base oils coming from Malaysia. There are also enquiries for shipping from the west coast of India and the Middle East Gulf for a few smaller parcels.

Russian seller Lukoil moved a cargo from Limas to Antwerp-Rotterdam-Amsterdam, as noted above, and also a parcel for Israel going into Haifa. These cargo lots are fed from the Volga river system via Azov, into temporary storage in Limas. Whether Russian material is coming from the more northerly refineries down into the Black Sea is unknown, and whether Limas has taken over from Svetly as a main distribution point for Lukoil is also being investigated. Prices FOB Limas are assessed at $1,120/t-$1,165/t for SN 150, with SN 500 at $1,195/t-$1,240/t.

Turkish blenders are purchasing Russian, Iranian and Uzbek sourced base oils. Turkey has yet to announce any restrictions on importing of Russian hydrocarbons including base oils. Without these lower priced imports blenders in Turkey would be faced with buying higher priced base oils from European mainland sources such as Spain, Italy and Greece. It is not known whether letters of credit are being opened in favor of Russian suppliers, or whether other alternative forms of payment are being made.

Tupras, the Turkish refiner, has apparently not restarted base oil production at the Izmir refinery as yet. However, base oils are being offered FCA out of storage, but at inflated prices in Turkish lira, which are not being taken up by blenders.

Imported Group II base oils sold FCA storage in Turkey by traders and distributors have dipped a little from last month, and with new supplies of both Group II and Group III base oils arriving prices will change. Group II prices ex-tank are now assessed at €1,820/t-€1,880/t for the three lower vis products, with 600N at €1,925/t-€1,965/t.

Group III base oils sold on the same FCA basis, for partly-approved grades, are realigned at €1,935/t-€1,975/t. Fully approved Group III grades from Cartagena in Spain are to be sold FCA at around €1,995/t-€2,075/t.

Middle East

Red Sea activities include a number of large cargoes organized for receivers in the United Arab Emirates, with material going into Hamriyah and Jebel Ali during October. Some 20,000 tons of various base oils will find their way into those ports. These cargoes are in addition to other parcels, one of which is a total of 20,000 tons, which will move into Mumbai anchorage. There are also cargoes for Egypt and Singapore. Loading of all cargoes will take place from Yanbu and Jeddah.

The Middle East Gulf is the center for cargoes arriving from various sources, such as Saudi Arabia, Thailand and Singapore, while other options for further Russian export barrels may be considered for receivers in the U.A.E. This would follow on from the two cargoes that have already discharged in Hamriyah, although further parcels may not be so keenly priced due to freight costs rising over the past few weeks. Some participants have said that freight costs actually doubled during the past two months for some sizes of cargo.

Indications for CFR prices for material loading out of Limas terminal are estimated to be at $1,210/t-$1,255/t for quantities of SN 150, with SN 500 at $1,290/t-$1,325/t basis delivered Hamriyah, U.A.E.

Group III business is brisk out of the ports of Sitra and Al Ruwais, with multiple loading taking place over the next few weeks, with destinations for cargoes such as mainland China and the west coast of India. There is one large cargo moving to three Indian ports – Mumbai, Chennai and Kolkata.

Sitra loadings include an 11,000-ton parcel for receivers in Mumbai anchorage. This cargo will load during the latter part of this week and will arrive in Mumbai during the second half of October.

At the same time an exceptionally large cargo of some 55,000 tons of Group III+ base oils loaded out of Ras Laffan in Qatar. This cargo will discharge in the U.S. Gulf for Shell affiliates. Another Shell cargo will load out of Sitra with 4,500 tons of Group III base oils under the auspices of Stasco. The cargo will initially discharge in total into Rotterdam, following on from there, around 1,200 to 1,500 tons will load for the east coast of the United Kingdom to be sold on to buyers via a trader.

Netbacks for Group III base oils out of Al Ruwais and Sitra are maintained in spite of local selling price in Europe and elsewhere dropping a little. Netbacks are assessed at $1,755/t-$1,795/t, for the range of 4 cSt, 6 cSt and 8 cSt partly-approved Group III base oils.

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

Group II base oils resold basis FCA U.A.E., having been sourced from European, U.S, Asia-Pacific and Red Sea suppliers, are being resold ex-tank, or on a truck-delivered basis within the Middle East Gulf, most of the material remaining in the U.A.E. Prices are reduced to $1,795/t-$1,865/t for the light vis grades, with 500N and 600N at $1,925/t-$1,975/t.


Further cargoes are planned for South Africa, with a large 28,000-ton parcel loading out of the usual two ports – Rotterdam and Fawley – for a large major. The cargo will discharge first at Durban, then on to Mombasa, and finally the balance of the cargo will arrive into Dar-es-Salaam. A further 4,500-ton cargo for the same charterers will load from Fawley and Rotterdam and will sail for Durban on a stand-alone basis. 

West Africa is quiet, with little buying activity at the moment, with the age old problem of getting hands on dollars still a major concern. There are problems with high levels of theft of crude oil that is adversely affecting the availability of dollars and this problem is set to continue. The rainy season is also having bad effects on logistics. There is almost a price war evolving between local traders, who are competing to sell off stocks from storage and in doing so appear to be cutting each other’s throats without taking into account the cost of replenishment stocks and when they have to buy.

Once again freight costs have risen dramatically for any voyage, whether from the U.S. Gulf or Europe, making it difficult for traders to offer acceptable competitive prices on a CFR basis.

There is one interesting shipping enquiry out on the market at the moment, for a vessel to sail from Taiwan to Lagos with 5,000 tons of base oils. In light of the current news regarding freight rates, this would seem an unlikely event, should this cargo be firmed up.

CIF/CFR levels for base oils offered into Apapa are revised in light of new offers, with indications around $1,255/t for quantities of SN 150, SN 500 is priced at around $1,300/t, with SN 900 at $1,345/t. As an indication, only bright stock may be landed at around $1,440/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.

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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