EMEA Base Oil Price Report


An air of resignation is creeping into the base oil markets in Europe, the Middle East and Africa, with many players content to sit back and wait for some action to take place. Even sellers keen to move volumes are letting business come to them rather than chasing prospective buyers, many of whom are merely window-shopping at this juncture.

There have been some small cargoes sold into export markets, but the larger quantities moving into regions such as West Africa and the Middle East Gulf are missing from the scene with receivers in these areas buying locally where they can and in smaller quantities so as not to be build large inventories.

Many view the base oil market as long at this time, with no shortage of alternatives from various sources around the regions. Prices are fickle, with exchange rates playing a major part in certain areas, such as Europe, where the euro has declined massively against the dollar, as have other currencies in other regions. Sellers are keen to sell in dollars rather using local currencies, but many markets are set in their ways, meaning domestic sales being conducted in local currencies, which can pose problems for sellers laying in stocks and inventories by purchasing in dollars.

Sellers have to cover their costs and hence are having to hike prices higher at a time when the market is seeing slower demand. Many producers have slashed run rates for base oils, and most are continually reassessing the slate to see what else can be done to optimize refinery production for all products.

Fundamentals have started to move upwards gain, confusing the situation to a greater extent, at a time when prices should be falling, the exchange rate and raw material costs are pushing refiners to move prices upwards, just at a time when buyers are expecting numbers to fall, due to lower demand and plentiful availabilities.

The war in Ukraine continues to blight the markets as supply chain disruptions and changing patterns in base oil trade flows. Russian exports are limited to Black Sea supplies, where buyers in Turkey and other Black Sea countries such as Romania and Israel are the beneficiaries of lower priced oils that are finding their way into those markets – sometimes by circuitous trades.

Some countries, such as Turkey, have not yet imposed any restrictions on Russian imports of hydrocarbon derivatives, and these markets, along with deep-sea locations, are the sole targets for Russian base oil at this time. Receivers in Latin and South America, along with Singapore, the Middle East Gulf and India, are still taking Russian export barrels, often at exceptionally attractive prices.

As mentioned, fundamentals have firmed over the past few days, following the OPEC and Russian agreement to rationalize production rates for crude, at a time when prices were falling to levels pre-dating Russia’s invasion. The effect of the decision to impose limits on crude spiked the market, and crude values jumped.

Dated deliveries of Brent crude are now at $97.65 per barrel, still for December front month settlement. This is some $8 higher than last week, and some players warn the price could approach $120. West Texas Intermediate followed a similar track to $92.45/bbl, still for November front month.

Low-sulfur gas oil had fallen below $1,000 per metric ton, but rebounded in response to demand for fuels and rising crude numbers. Demand for LSGO remains high with the European Union and allied nations avoiding Russian imports, though alternative supplies are coming on to European. The posted price rose to $1272 per metric ton, still for October settlement, some $150/t higher than last reported.

These prices were obtained from London ICE trading late Oct. 10.


Prices for API Group I exports from Europe are steady this week, with pressure coming on prices to stabilize against rising raw material costs caused by higher crude and feedstock numbers. It may be expected that prices could start to rise, although the market is somewhat weak at this time, with poor demand at this time, and very few signs that traditional buyers in export markets are about to change current thinking by buying large quantities of base oils. However, there is a train of thought that should prices start to rise, then buyers may be pushed into buying mode to avoid higher prices in months to come.

Another factor concerning traders and receivers is the meteoric rise in freight rates, which plays an important part in export trades. Rates are still rising, and in some cases have reached up to five times the rates which were paid in June or July of this year. These costs will have a detracting effect on export markets, increasing prices for sales made on CFR and CIF bases.

Meanwhile producers are still keen to move inventory on a regular basis rather than being faced with the situation where there is s sudden buying peak, followed by a lull in purchasing. It is the unknown which is spooking a number of producers at this stage, with many refusing to gamble by having large stocks of Group I base oils in tank, instead some refiners are running greater distillate production rather than cater to the smaller base oil export market, which is proving to be fickle from a demand standpoint.

Traditional export markets such as Nigeria are still not in any hurry to restock with replacement cargoes, although if prices start to harden as a result of both rising freight rates and higher crude and feedstock levels, then some buyers may be galvanized into action to buy large slugs of Group I base oils. Receivers may be unpleasantly surprised by the delivered prices to be contained in traders’ offers over the next few weeks.

Export prices are maintained this week between $1,175/t and $1,220/t for solvent neutral 150 and at $1,255/t-$1,285/t for SN500, both on an FOB basis. Bright stock also remains as per last with prices between $1,340/t-$1,385/t.

Domestic markets in Europe had been adjusted downwards from Oct. 1. Demand is down at this time – by as much as 55%-70%, according to some sources. Demand is also weak for finished lubricants since many economies are suffering from inflation and demand downturns due to the war in Ukraine. Some forecasts markets may not return to anything like pre-Covid levels until 2025.

Buyers remain unconvinced to buy large swathes of product, since they firmly believe that availabilities are good at the moment, and there is no driving pressure for them to purchase large lots of Group I base oils. This attitude may change if prices start to rise, but many buyers and blending operations are commenting that the market needs some firm direction before commitments are made to replenish inventories. This scenario is not likely to happen any time soon, hence a continuation of the cagey half-hearted approach to lubricants business in Europe will probably continue.

The other current problem is the euro, which has plummeted in value against the dollar with sellers having to adjust euro selling prices higher to compensate for the exchange rate anomaly. A year ago the euro was around $1.18, today it stands at $0.9704.

The price differential between sales within the region and exports is maintained this week at €120/t-€195/t, exports being lower.

Group II base oil prices had seen marginal decreases at the end of September, but the exchange rate and feedstock rises may have start to eliminate that downward pressure. Sellers are saying that they will start to look at prices during this month, to ensure that costs are covered and that margins are maintained at acceptable levels for these base oil grades. Price erosion has all but ceased during the last week, and the next moves on Group II prices may be upwards. Some movements have already happened or are happening now, mainly due to the exchange rate where product is sold in euros.

Buyers are no longer in the driving seat when it comes to prices, having adopted a hard line on numbers at the end of September. The nuance of a weaker market appears to have turned, and although demand is still relatively low and availability is good for buyers, sellers are determined to ensure that costs are covered and that they are not caught out with margins too low. Prices are still relatively high, when compared to Group I levels, although this gap is narrowing with Group I prices on the up.

Prices for Group II base oils are maintained for the rest of this week, although reviews will be taking place during the next few days to see which way levels move. Numbers are currently assessed between $1,610/t-$1,675/t (€1,571/t-€1,635) for 100 neutral, 150N and 220N, while 600N is at $1,755/t-$1,820/t (€1,713/t-€1,777/t).

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

Group III prices are stable with buyers realizing that even against a backdrop of weaker demand for all base oils, Group III supply and demand are more or less in balance, possibly with the absence of the Tatneft barrels from the European market. This has certainly shortened up the availability for 4 centiStoke material, although this shortage appears to have solved itself with sufficient supplies of that grade around the European arena.

On the horizon there are no immediate possibilities for any new suppliers coming into the European markets, hence the current incumbents will continue to expand sales where possible, although most distributors comment that with the restrictions on storage and cargo availablity from producers, there is not a great deal of scope to expand current portfolios.

Porvoo has resumed production, and its new seller is moving material to existing Neste customers. Chevron will operate throughout the European markets, increasing the scope and range of base stocks available from this major.

As with other types of base oil, prices for Group III grades with partial slates of finished lubricant approvals are maintained without change this week. Levels are therefore assessed between €1,820/t-€1,875/t. Six and 8 cSt grades are to be found at €1,845/t-€1,875/t and 4 cSt at €1,820/t-€1,845/t all on an FCA basis ex Antwerp-Rotterdam-Amsterdam and Northwestern Europe.

Values for fully approved Group III are also unchanged at €1,895/t-€1,925/t for 4 cSt and €1,900/t-€1,955/t for 6 and 8 cSt.

Baltic and Black Seas

Baltic activity has become something of a missing element, with only reports of Lukoil loading some cargoes from Svetly terminal in Kaliningrad. Even these cargoes appear to be less in number than previously seen, although parcels which moved to Antwerp-Rotterdam-Amsterdam will have ceased with the European Union’s ban on Russian exports, in addition to customers refusal to take Russian products after the invasion of Ukraine. Gdansk maintains a number of loadings for Group I grades and is rapidly taking over and replacing some of the former Russian cargoes which were loaded out of the Baltic from resellers and distributors in the ports of Riga, Klaipeda and Liepaja. While historical traffic mostly flowed out of the Baltic with base oil requirements, the need now is for base oil to move into the Baltic States for blenders in Lithuania, Latvia and Estonia.

From sources information has been gleaned that Russian trains are still transiting through Lithuania carrying base oils for Svetly terminal in Kaliningrad and whilst vessel movements are less than pre-Ukraine invasion, base oils are still moving to deep-sea destinations, although many of the cargoes are being routed to the south and bridged through Limas terminal in Turkey. This operation by Lukoil, may also see some changes depending on the territorial determination by Ukrainian forces on the ground.

FOB Baltic prices refer only to Lotos sales out of Gdansk port in northern Poland.  FOB prices for this port are placed in line with European mainland levels and are maintained in line with those numbers. As indications only SN 150 is estimated to be placed at $1,175/t-$1,220/t with SN 500 at $1,255/t-$1,285/t. There are no prices available for Russian exports from Baltic ports, due to there being no recorded cargoes this week.

Black Sea regions are active, with cargoes from Azov moving into Limas terminal in Turkey. Lukoil moved one cargo from Limas to Antwerp-Rotterdam-Amsterdam, although it was not clear who the receivers were for this parcel. One view was that the material was “in transit” and was being moved on the receivers as part of a larger cargo which was part-loaded out of Kaliningrad. Prices FOB Limas remain assessed at $1,120/t-$1,165/t for SN 150, with SN 500 at $1,195/t-$1,240/t.

Turkish buyers are taking a great deal of Russian exports, since prices are attractive and there are no current restrictions on importing Russian base oils into Turkey. Also Turkish buyers are taking Iranian and Uzbek-sourced base oils. The usual cargoes from Livorno and Aghio have disappeared off the scene. Whether this is as a result of Russian export barrels being lower in price, or whether Turkish buyers are experiencing problems in opening letters of credit to sellers in Italy and Greece due to high inflation and lack of dollar currency remains an unknown.

Tupras, who run the refinery at Izmir, has still not restarted Group I base oil production, but is still offering available quantities ex tank on prices which move almost daily. Sometimes prices – in Turkish lira – are competitive, while at other times they are so high that blenders cannot contemplate using these supplies. The uncertainty of availability is also a negative factor, which sways Turkish blenders to the constant stream of Russian exports. Terms for buying from Russian companies are not determined.

Imported Group II base oils sold FCA storage in Turkey by traders and distributors are maintained this week following small adjustments to selling prices at the end of September. Again, depending on euro sales, prices may have to be adjusted higher before too long, but if this is happening, it will only take place later in the month. Group II prices ex-tank are 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, also sold on an FCA basis for partly approved grades, remain at €1,935/t-€1,975/t. Fully approved Group III grades from Cartagena in Spain are sold FCA at around €1,995/t-€2,075/t.

Middle East

Red Sea reports contain news of a number of cargoes to be loaded out of Yanbu and Jeddah for receivers in the United Arab Emirates. Material will discharge into Hamriyah and Jebel Ali during this month. Additionally other large parcels will go into the west coast of India via Mumbai anchorage.

The Middle East Gulf, and the U.A.E. in particular, has cargoes arriving from various sources, such as Saudi Arabia and Thailand. Options are open for at least one further Russian export barrels, and it is being considered by receivers in the U.A.E. An offer is on the table, although it is believed that buyers have countered the offered prices. The original numbers were resubmitted by sellers, with a rider comment on the offer – which has very short validity – mentioning that freight costs are very high and could be moving higher. Receivers are understood to be looking to increase the size of the cargo, subject to shore storage being available. This would keep unit costs down and may keep the offer competitive. Offered numbers are estimated to be around $1,165/t-$1,200/t for the SN 150, and $1,360/t-$1,425/t for the quantity of SN 500. This is based on a cargo of around 8,000 tons in total.

Group III trade is marked out of the ports of Sitra and Al Ruwais, with destinations such as mainland China and the west coast of India. One large cargo of 8,000 tons is moving to three Indian ports – Mumbai, Chennai and Kolkata – although the quantity to be discharged in each port is unknown.

The exceptionally large cargo of some 55,000 tons of G III+ base oils loaded out of Ras Laffan in Qatar, and will discharge in the U.S. Gulf for an affiliate of the Shell Group of companies. The other Shell cargo is loading out of Sitra with 4,500 tons of Group III base oils, with Stasco as the charterer. The cargo will discharge in Rotterdam.

Netbacks for Group III base oils out of Al Ruwais and Sitra remain unchanged this week, with selling prices in Europe and the United States maintained. Netbacks are assessed at $1,755/t-$1,795/t, for the range of 4 centiStoke, 6 cSt and 8 cSt partly-approved Group III base oils. The only factor which could negatively affect netbacks in the future are the increases in freight costs which could eat into margins if prices remain at current levels. Estimates are that freight rates may have increased by around $20/t-$25/t during the last couple of months.

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.-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 maintained this week but may have to be reviewed prior to the end of the month. Levels are at $1,795/t-$1,865/t for the light vis grades, with 500N and 600N at $1,925/t-$1,975/t.


South African cargoes consist of one large 28,000-ton parcel loaded out of Rotterdam and Fawley for ExxonMobil. The cargo will discharge into three ports. First at Durban in South Africa, then Mombasa in Kenya, and finally Dar-es-Salaam in Tanzania. A further 4,500-ton cargo for the same major will load from Fawley and Rotterdam and will sail for Durban.

West Africa news is that there is no news. The scene is quiet with buyers sitting on the fence awaiting banks to lay hands on dollars to be able to open the requisite letter of credit, which have to be opened locally due to Nigeria having exchange controls on currency. The problems with high levels of theft of crude oil still are foremost in many minds. This practice affects the availability of dollars, with government agencies taking action to clamp down on this crime wave. Some say that the level of corruption is so immense that high level players are involved in the scam, since without major league involvement, large cargoes of Bonny Light and Forcados crude oil would not be going missing, 

The rainy season continues, although it should be ending within a couple of weeks from now. The weather also has bad effects on logistics and transportation. Traders have suggested that there is pressure in the market for base oil prices to rise, reflecting two aspects of the deals. The first is the FOB levels, which may start to climb on the back of crude and feedstock increases, and the second reason is the freight rate element, which is going through the roof. This will ultimately result in market pressure to increase costs for the landed prices, which will necessarily have to reflect rising costs.

The shipping inquiry for a vessel to sail from Taiwan to Lagos with 5,000 tons of base oils remains on the market as an inquiry. It is still considered to be an unlikely event should this cargo be firmed up, due to the freight rates that would apply to this rather small cargo.

CIF/CFR levels for base oils offered into Apapa remain as advised last week, with indications around $1,255/t for quantities of SN 150, while 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. It is not yet known if any offer has been confirmed on the basis of the prices above.

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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