EMEA Base Oil Price Report


Base oil demand is lackluster across most of Europe, the Middle East and Africa, although there has been an uptick in calls from some export markets, particularly for API Group I grades. Unfortunately, oils from mainland Europe are not being considered for these opportunities, since prices remain relatively high versus other regions such as the United States and Asia-Pacific.

West Africa appears to have reawoken after the end of the rainy season as a number of fixtures and inquiries are coming from regular buyers in Nigeria, Ghana, Cote d’Ivoire and Guinea.

Other regions are taking up a number of open arbitrages between Asia-Pacific and the Middle East Gulf, although this arbitrage is not open into West and South African locations due to the high freight costs that would accompany potential cargoes moving from the Far East, rendering the delivered prices too high for receivers in those regions.

With demand lacking and markets recovering from the shortfall in the first half of the year, availabilities have improved radically over the past couple months. Even against the backdrop of diminishing base oil run rates at refineries around the regions, factors such as inflation and higher borrowing costs for capital projects are impinging on any positive expansion for the lubricant industry. Some pundits predict that the market will not return to positive sentiment until after the situation in Ukraine has been sorted out and the Russian military has withdrawn from that country.

This hope seems somewhat forlorn at this time, as both sides are claiming material advances – both politically and in territory. The potential end of an agreement giving safe passage out of southern Ukraine to vessels carrying grain and other exports of foodstuffs could push prices for commodities higher. The winter is yet to make its impact on energy resources, although some suggest that Europe will get through this period using alternative sources for gas and fuels.

Base oil prices have fallen across all groups the past few weeks as sellers try to adjust to lower demand while still covering market requirements. There have been rumors of production problems affecting Group II supplies in Europe, although information on this situation has only been heard from customers in local markets having problems meeting their needs.

Group I prices started the ball rolling during summer months by declining from exceptionally high values achieved because of refinery problems and maintenance schedules affecting availability. Group II and Group III markets have also started to feel the effects of slower demand, and prices in these sectors have started to come under the same pressures as Group I.

Crude prices have shown a modicum of strength the past few days, perhaps because of OPEC+ limits to production starting to bite in markets where demand remained steady, such as India and Southeast Asia. Chinese demand remains muted, perhaps helping to keep crude levels below $100 per barrel.

Dated deliveries of Brent crude are at $96.05 per barrel for December front month settlement, around $3 higher than last week. West Texas Intermediate crude has also moved in a similar fashion to $87.20/bbl, also for December front month.

Low-sulfur gas oil values are still see-sawing around $1,100 per metric ton, without clear direction. Posted prices are currently at $1,117/t, still for November front month. All of these prices were obtained from London ICE trading late Oct. 31.


Group I exports from Europe are more in evidence this week, with cargoes moving to open arbitrage destinations such as West Africa and South America. Other export locations in Middle East Gulf and India are also being explored, since European Group I prices have dropped to levels allowing these options to be considered. Prices for Group I grades have had to realign to encourage sales to receivers in export markets.

The problem for producers is that refining margins in Europe are being squeezed more and more by still elevated feedstock prices. Inventory issues at some refineries have pushed offer levels downwards just to move material out of storage. Another problem facing traders is that freight rates have risen quickly, adding to the delivered cost of exports. 

Prices have taken a step lower this week, with offers for large quantities of European production having to compete with exports from the U.S. and Russia. The latter are less prevalent than in the past but are nevertheless being used by receivers negotiating for the lowest possible delivered price.

Values have fallen to between $955/t and $995/t for solvent neutral 150 and $1,020/t-$1,085/t for SN500, both on an FOB basis. Bright stock has also been affected by price pressures and is now being offered at $1,110/t-$1,175/t.

A small number of suppliers are holding out for higher numbers, but these are not being included in ranges for the simple reason that no buyer is prepared to accept these prices. Some offers have been heard at anything up to $200/t higher than the tops of this week’s ranges.

Discussion have been taking place during October and November about prices on Group I sales within Europe. Sellers are trying to avoid year-end fire sales to move inventory and have been tempting buyers to take larger quantities of stocks at lower prices to accomplish this objective.

There are some signs that buyers are showing flexibility when being offered incentives to purchase larger quantities of base oils. Uncertainty is moving buyers to look at all the alternatives and the various scenarios that could play out over the next few weeks.

Many buyers are still pushing for numbers closer to export levels, commenting that in the absence of meaningful export sales, sellers have little option other than to offer lower numbers in local markets.

The euro, which had been declining in value against the U.S. dollar, rallied to higher than parity at the end of last week but then fell back to $0.9895 on Monday. This is a serious problem for sellers, with raw material costs being in dollars and receipts for sales of product being in euros. Some sellers have tried to convince buyers to move over to dollar purchasing, although this practice has not been universally accepted, since buyers would then have to purchase dollars, which would pose an additional cost.

With prices for exports and sales within Europe both falling, the differential between the two is marginally different since Nov. 1. It is now assessed at €75/t-€135/t, exports being lower.

Group II base oil prices have seen major shifts over the last few days, with prices set for November at around €70/t-€80/t lower light grades and €50/t-€55/t lower for 600 neutral. There have been some reports of local production problems in the local Group II unit in Netherlands, but these reports are unconfirmed and have only been gained third-hand. The apparent problem pertains to moving the heavier 600N grade out of the refinery.

Large cargoes have been identified moving into Europe from the U.S., with one parcel of 25,000 tons having loaded out of the U.S. Gulf in mid-October to discharge into Antwerp.

As with other grades, demand for Group II grades is down as blenders around Europe say that sales of finished lubricants are running up to 30% less than last year – which of course was still during the pandemic. Some forecasts say this situation may not improve until late spring when inflation and higher wage demands may have been taken off the table.

Prices for Group II base oils fell to $1,360/t-$1,425/t (€1,375/t-€1,440) 100N, 150N and 220N and to $1,530/t-$1,600/t (€1,545/t-€1,615) for 600N. These prices apply to a range of Group II oils from Europe, the U.S., Asia-Pacific and the Middle East Gulf.

Group III base oil prices are being adjusted slightly lower due to price pressure being applied from buyers contending that numbers have peaked and that demand is being seen to have come off. How significant the drop in demand for Group III is hard to figure, since some blenders have intimated that they are taking more and more Group III grades, and that this trend will continue for the foreseeable future. Others have scaled back on quantities taken on an FCA basis, hence the picture is unclear just how the market is evolving.

Some players have said that demand for Group III base stocks will continue to rise with updated formulations for various types of lubricants coming on to the market. Others have said that with the European markets in depressed mode at the current time, it may be months before any resurgence in growth takes place.

The price levels indicated last week, for both partly-approved and fully-approved products remain in place from Nov. 1. Prices for Group III grades with partial slates of finished product approvals are taken lower to €1,780/t-€1,795 for 4 and 6 centiStoke and to €1,755/t-€1,875/t for 8 cst, all on an FCA basis ex Antwerp-Rotterdam-Amsterdam or Northwestern Europe.

Group III base oils holding full slates of European approvals will also have prices slightly lower at €1,825/t-€1,875/t for 4 cSt and €1,840/t-€1,785/t for 6 and 8 cSt.

Baltic and Black Seas

Baltic Sea reports contain news of a number of large vessel enquiries in the shipping market to move quantities of Russian export barrels to Turkey, Nigeria and Singapore. Some of these cargoes may or may not come to fruition over the next few weeks, since the shipping enquiries may only be to establish freight levels to give indication prices to receivers in discharge ports.

The first cargo is 10,000 to 15,000 tons to load for Gebze in Turkey. What is interesting is that this parcel will load from the Baltic rather than be accumulated at Limas terminal in the Black Sea. The freight from Baltic to Gebze will be considerably higher, although the large quantity may offset this aspect. This will be the first large cargo to move out of Svetly terminal in Kaliningrad for some time, proving that the supply of base oils from northern refineries owned by Lukoil are continuing to transit through Lithuania into Kaliningrad. 

The other cargo will load ex Riga with 7,000 to 10,000 tons for receivers in Apapa. This is believed to be a trader sponsored parcel and will load during this week if fixed clean. Nigerian receivers are obviously still considering taking Russian exports, with the provision that the price will be keener than material coming out of the U.S. Gulf or mainland Europe. 

Gdansk activity is reported as quiet with no new cargoes identified this week. There are enquiries for November parcels to move to the east coast of the United Kingdom and also to Antwerp-Rotterdam-Amsterdam and Le Havre.

Indication prices for FOB Baltic ports are SN 150 at $865/t-$885/t, with SN 500 at $895/t-$925/t. SN 900 is indicated at $945/t-$965/t.

Black Sea activities include reports of a base oil parcel of 5,000 tons loaded out of Batumi port. This cargo is bound for Marmara. This could be a quantity of Uzbek base oils, although the size of the cargo may suggest Russian material coming through Georgia en route to Limas terminal.

Other activity appears to be concentrated on Baltic loadings from Svetly and Riga terminals to Gebze port in Turkey. Prices CIF Gebze are assessed at $935/t-$965/t for SN 150, with SN 500 at $995/t-$1,045/t. Lukoil appears to be gearing up for a small cargo of 2,500 tons of base oils to move into Greece on a prompt basis from Limas terminal, although how this quantity will be permitted to enter a European Union port is an unknown, since for sure this will consist of Russian export grades.

Another smaller parcel of 1,000 tons will leave Limas and discharge into Haifa. Israel has not yet come out banning the import of Russian base oils.

A cargo of base oils is en route from the U.S. Gulf Coast to Gebze, with 3,000 tons of product on board. This may be comprised of Group II grades, since Group I material would be unable to compete in price against the Russian export barrels coming either from the Baltic or from Volgagrad.

Tupras is once again back in production and is offering base oils from Izmir refinery, but prices are still so high that no takers in the Turkish market can afford to lift this availability by truck. The material remains priced at around $1,425/t-$1,480/t for the SN 100 and SN 150 grades, while SN 500 is placed at around $1,560/t-$1,595/t. Bright stock is offered at $1,720/t-$1,755/t. If the quantities are not sold into the local Turkish market, which is more than likely, there may follow an export tender which may be considered for supply into West Africa.

Imported Group II prices ex-tank Turkey are assessed at €1,685/t-€1,725/t for the three lower vis products, with 600N at €1,775/t-€1,820/t.

Group III base oils sold on an FCA basis for partly-approved grades are lower and are placed at €1,825/t-€1,880/t. Fully-approved Group III grades from Cartagena in Spain are sold FCA at around €1,900/t-€1,945/t.

There are no cargo reports from Red Sea sources in Yanbu and Jeddah. It is unusual for Luberef / Saudi Aramco not to have any base oil cargoes organized for early November.

Where the arbitrage has been open, and remains open, a number of cargoes of Group I and Group II base oils are arriving into the Middle East Gulf and United Arab Emirates from suppliers in Thailand and Singapore. The freight on these smaller vessels carrying 2,000 to 3,000 tons is acceptable, given the attractive FOB numbers that are available out of Rayong and Singapore.

The further cargo of around 10,000 tons of Russian export grades is still being assessed by buyers in the U.A.E., although prices may have edged upwards, even with lower FOB numbers, this being due to increases in freight rates. Buyers are keen to take either Russian or Iranian base oil since these are the most economic options because of their historically lower prices. There does not appear to be any offers for Iranian material, and it may be considered that with the civil unrest in that country at the moment, transportation and delivery of base oils may not take priority.

The Russian cargo will almost certainly load from Limas terminal in Turkey because moving 10,000 tons from Baltic to the U.A.E. may be too expensive from a freight standpoint. CIF prices, taking FOB Limas rates and indication freight, are estimated to come into Hamriyah in Sharjah at around $935/t-$975/t for SN 150 and $985/t-$1,025/t for SN 500. This would be based on a cargo of around 10,000 tons.

Middle East

Group III from the Middle East Gulf are in the limelight this week, with rumors of non-specific problems in getting material out of Al Ruwais terminal. Further clarification is being sought on this matter, but no official news has been issued either from Adnoc or any of their distributors.

The allocation of 145,000 tons at Sitra refinery, which was formerly under the Neste umbrella, and would now be controlled by Chevron, is not apparently coming out of the refinery as Nexbase grades but may have been sold back to Bapco as partly-approved material moving into markets such as India and China.

Netbacks for Group III base oils loading out of Al Ruwais and Sitra terminals are lower, with selling prices in Europe perhaps entering a period of change. Also, the differential between Group III and Group II base stocks is about to change. Netbacks are assessed at $1,735/t-$1,775/t, for the range of 4 centiStoke, 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 FCA U.A.E. are sourced from European, U.S, Asia-Pacific and Red Sea sources, either sold ex-rack or on a truck-delivered basis within the United Arab Emirates. Prices are lower, with levels at $1,645/t-$1,695/t for the light vis grades, with 500N and 600N at $1,795/t-$1,855/t.


South African cargoes from a well-known major continue with discharging in Durban, Mombasa and Dar-es-Salaam, although the mainstay of the operation is for all types and grades of base oils to move into the expanding South African market through Durban port. 

West African trades include a specific cargo of 5,000 tons for receivers in Conakry in Guinea and Abidjan in Cote d’Ivoire. This is in addition to the recent movement that was to deliver into both these locations, and additionally to Tema in Ghana. The former cargo of 10,500 tons loaded and is now on the high seas. The cargo servicing the Ghana contract requires a total of 5,000 tons of a mix of SN 150, SN 500 and bright stock. Assumption is that the remainder of the cargo around 5,200 tons was split between Conakry and Abidjan, where additional material will now be incoming from Fawley refinery in the United Kingdom.

Nigeria is back in the news with a couple of cargoes, not yet confirmed. One inquiry is for 7,000 to 10,000 tons to load out of Riga in the Baltic during the first week of November. Russian export barrels are apparently acceptable to receivers in Lagos, although it is known that a number of the buyers in Nigeria have refused to take material from Russia. The other option is for a large cargo to be sourced out of the U.S. Gulf during November, which would arrive into Apapa prior to the year end. This cargo could entail as much as 18,000 tons of Group I grades SN 150, SN 500 and SN 900 being loaded.

CFR levels for base oils offered into Apapa are maintained, with the indicative numbers around $1,255/t for SN 150, SN 500 at around $1,300/t, and SN 900 at $1,345/t. As an indication, only bright stock could be landed at around $1,440 pmt C&F Apapa. On receiving confirmation of new prices, it could realistically be that the numbers could be trimmed a little with FOB levels falling, but with freight rates at more of a premium than ever, the FOB saving may be offset with higher voyage costs.  

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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Historic and current base oil pricing data are available for purchase in Excel format.

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