EMEA Base Oil Price Report


Base oil demand-supply balances have diverged significantly between Europe, the Middle East Gulf and Africa. Europe is flush with API Group II oils, balanced for Group III and has a Group I market that could be in flux. The Middle East Gulf is being peppered with low-priced imports from multiple regions, while Africa appears to be finding its appetite for imports.

Europe’s Group I segment is being impacted by the market for diesel, which is already short within the region. With sanctions against Russia coming in December, the pressure is on refiners to maximize distillate output, so they are shifting production away from other products, such as base oil and wax.

This could cause light Group I grades to start running short as the winter progresses, exacerbating an already dysfunctional state for that segment, where an abundance of heavier grades could exert downward pressure on prices, potentially to the benefit of export markets such as West Africa.

The premium held by Group II base oils over Group I is falling due to lower demand for the latter grades. Group III markets within the European arena are balanced from the supply side, with large quantities of material emanating from Cartagena in Spain, where the joint venture between SK Lubricants and Repsol has produced almost 475,000 metric tons for the first ten months of this year. That is on pace to reach around 570,000 tons for the full year, close to the nameplate capacity for that facility.

The bumper output from Spain has been basically offset by the ban on Group III imports from Russia, a decrease in shipments from the Middle East Gulf and a real downturn in the cargoes from Asia-Pacific sources, although deliveries are still arriving from Malaysia, including one 4,000 ton parcel into northwestern France in early December.

In the face of this balance, Group III base oil prices have remained steady, only nibbled at by buyers seeing Group l and Group II values decline.

In the Middle East Gulf, low-priced base oils in all API groups have been coming in from Asia-Pacific, joining supplies of oils produced in Saudi Arabia, Iran and Iraq. Added to the mix are Russian barrels looking for alternative markets after sanctions by the European Union, the United States and allied nations.

Middle East Gulf markets are extremely price sensitive, and Russian product must be competitive to have any chance of gaining market share in this region. The challenge for Russian suppliers is complicated by high freight rates that pad prices on cargoes delivered into the United Arab Emirates, putting pressure on levels charged on an FOB basis.

African trade is buoyant, especially in South Africa, which is switching to European imports instead of Far East sources that largely sustained this market over the past year or two. West African base oil trade shows signs of reviving before the end of the year, with cargoes being sought not only in Nigeria but also Guinea, Cote d’Ivoire and Ghana.

Crude oil prices moved upwards at the beginning of this week. This squeezed base oil margins, causing upward pricing pressure to counter downward pressure from long availability – at least for Group I and II. Crude has been trending upward since the beginning of October, and this curve may continue into the winter given the decision by the OPEC+ group of oil producing nations to cut back on supply.

Dated deliveries of Brent crude climbed around $3 the past week to $98.10 per barrel, now for January front month delivery. West Texas Intermediate rose almost $5 to $92.20/bbl, still for December front month.

Oddly, low-sulfur gas oil fell around $25 to $1089 per metric ton, still for November front month although that will change at the coming weekend. All of these prices were obtained from London ICE trading late Nov. 7.


Prices for Group I exports from Europe are unchanged this week as some sources commented that values quoted last week were at the market’s cutting edge and may only have been applied after Nov. 1. European prices may have fallen to levels that are satisfactory for buyers as a number of inquiries were fielded for cargoes to load during November for West Africa, South Africa, the West Coast of India and Argentina.

Some contend that European supplies are still not competitive with availabilities from Asia-Pacific and the Middle East Gulf, but prices from the latter regions are changing, and lower numbers seen some weeks ago may no longer be valid.

There was talk last week of upward pricing pressure on base oil due to the fact that base oil margins have reached their lowest levels relative to diesel for some time. But it is also clear that availability is still flush.

Freight rates remain a huge negative as numbers being quoted are soaring. The effects on delivered prices are considerable but are largely out of the control of charterers. Ship owners are citing rising fuel costs in addition to wages, insurances and port calling costs – all of which have increased substantially over the past few months.

Sellers are primarily targeting markets within Europe, only looking to export markets when they must to maintain an optimum inventory. There is a modicum of pressure building for sellers to start releasing quantities into the export scene if they wish to avoid sales at year end. when prices may become depressed.

Export prices for solvent neutral 150 are assessed between $995/t and $1,055/t, while SN500 is at $1,085/t-$1,120/t, both on an FOB basis. Bright stock values fell at the turn of the month to $1,185/t-$1,250/t.

Prices for Group I sales within Europe dropped significantly at the start of November, thought they remain well above offers for some export trades. The downward moves were welcomed by buyers, who still maintain that local numbers have been kept too high for too long.

Some blenders have intimated that finished lubricant demand is waning and not expected to revive until spring. As a result, some lube blenders have scaled back to four-day work weeks as a way of coping with higher costs of wages, heating and lighting.

The euro has clawed back almost to parity with the U.S. dollar, but the exchange rate remains a problem for sellers. Base oil producers are most affected, since they pay raw material costs in dollars but transact sales in euros. A year ago the euro exchanged for $1.18.

The differential prices for Group I exports and sales within Europe widened as the former has been falling faster. The differential is now assessed at €95/t-€165/t, export prices being lower.

Group II base oil prices fell at the start of the month, losing some of the premium over Group I oils. Discussion has resumed about the European market’s ability to cover all Group II requirements. There are no public plans to build significant additional capacity within the region, and dependence on imports reopens questions about the import duty charged to Group II imports from the U.S.

Group II prices are unchanged at $1,425/t-$1,495/t (€1,425/t-€1,495/t) for 100 neutral, 150N and 220N and at $1,585/t-$1,655/t (€1,585/t-€1,655/t) for 600N. Note that these levels may reflect a decrease for euro sales, given the currency’s rebound against the dollar, though some suppliers do not adjust euro prices in lockstep with exchange rates.

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

Group III prices have stabilized as the overall market’s continued shift toward this grade is being somewhat offset by the global economic downturn, which is affecting the European markets perhaps more than most due to the war in Ukraine.

With feedstock prices rising, pressure may be developing against further reductions in Group III values may be pressure starting to maintain prices at current levels without any further erosion.

As mentioned earlier, the Cartagena refinery has ramped up production, exporting around 50,000 tons of Group III every month this year. The latest statistics indicate that total base oil exports from Spain dropped some 8,000 tons in October, but it is unclear whether Group I – which is produced by Repsol’s wholly owned operations – accounted for any of the decrease.

Prices for Group III oils with partial slates of finished lubricant approvals are unchanged this week at €1,780/t-€1,795/t for 4 and 6 centiStoke grades and €1,755/t-€1,875/t for 8 cSt, all on an FCA basis ex Antwerp-Rotterdam-Amsterdam or Northwestern Europe.

Prices for Group III oils with full slates of approvals are also unchanged at €1,825/t-€1,875/t for 4 cSt and €1,840/t-€1,885/t for 6 and 8 cSt, again on an FCA basis ex Antwerp-Rotterdam-Amsterdam. Note that fully-approved 8 cSt grades are priced higher in Europe than the 4 centiStoke and 6 cSt grades.

Baltic and Black Seas

Baltic Sea cargoes remain elusive, with only one large parcel still shipping, an inquiry for 10,000 tons to load out of Svetly terminal in Kaliningrad for shipment to Gebze in Turkey. The reasoning behind moving a cargo from Baltic to Turkey remains unclear, since the freight angle alone will make this enterprise substantially more expensive than taking material from Volgograd refinery. It is considered that northern Russian refineries, such as Perm, may have production that has to be moved out through the most efficient channel. This operation may reflect this requirement. 

The other 10,000 tons of Russian export barrels that was an inquiry for Lagos, which was to load out of Riga, has not been confirmed from Nigeria. There are no shipping inquiries around the market reflecting this cargo. It may be subject to delay or cancellation for many reasons yet to be confirmed.

Whatever the reasoning behind the logistics from the Baltic ports of Riga, Liepaja, and Svetly, Russian exports activity is much diminished. Some parties are commenting that production from Gazprom and Rosneft refineries is mostly used in the domestic markets, although quite how this is working is unknown, because getting reliable and up-to-date information out of Russia is well-nigh impossible.

Gdansk is also quiet, though more cargoes are on the table for November and December.

As an FOB Svetly indication only, SN 150 remains estimated at $885/t-$910/t, with SN 500 at $925/t-$960/t.

FOB prices relating to Gdansk Group I grades for this port are in line with European mainland levels and are maintained in line with those numbers. As an indication, only SN 150 is put at $995/t-$1,055/t, with SN 500 at $1,085/t-$1,120/t. Bright stock is assessed at $1,185/t-$1,250/t.

Black Sea exports from Limas terminal in Turkey have been bridged into this storage facility from Volgograd refinery, using river vessels that hug the Black Sea coastline and deliver around 3,000 tons per cargo into Limas terminal. The Baltic cargo for Gebze is also noted but going into the Turkish market rather than for re-export. Prices CIF Gebze are assessed at $965/t-$985/t for SN 150, with SN 500 at $995/t-$1,025/t.

The 5,000 tons cargo from Batumi is still on the cards for import into Turkey, but further clarification on where the product originates from remains a mystery. Local sources say that the quantity is too large to be Uzbek material, and that Russian exports would not choose a route through Batumi.

Tupras still offers base oils ex-rack from Izmir refinery, still with sky high prices that no Turkish buyers can consider. Rumors are that prices remain around $1,425-$1,480 for the SN 100 and SN 150 grades, with SN 500 at around $1,560/t-$1,595/t. Bright stock is reportedly offered at $1,720/t-$1,755/t. There has been no announcement as yet regarding an optional tender out of a Marmara port, such as Aliaga.

A Group III cargo in nominated on a vessel fixed from Cartagena to Gemlik, with a small parcel of 1,150 tons delivered during second half November. This quantity will be resold on an FCA basis.

Imported Group II prices ex-tank are assessed at €1,665/t-€1,700/t for the three lower vis products, with 600N at €1,725/t-€1,775/t.

Group III base oils sold on an FCA basis for partly approved grades, are assessed at €1,795/t-€1,825/t. Fully approved Group III grades Cartagena in Spain will be priced FCA at around €1,865/t-€1,920/t.

Middle East

Red Sea reports one large cargo confirmed and has loaded 17,800 tons out of Yanbu and Jeddah, with options to take the cargo either to Mumbai anchorage or to Hamriyah and Jebel Ali in the United Arab Emirates. Other cargoes are expected to load for the west coast of India later this month, with one 17,500-tons parcel, and Singapore and Durban also lined up for possible cargoes for December.

In the Middle East Gulf, a number of Group I base oil cargoes are arriving into the U.A.E. from suppliers in Thailand and Singapore. However, the cargo of 10,000 tons of Russian barrels was re-sized and will now be 5,000 tons. This parcel will load from Limas terminal in Turkey, not from Svetly. CIF Prices are estimated to be offered at around $965/t-$995/t for the SN 150, with levels at $995/t-$1,025/t for SN 500.

Prices are re-assessed on the basis that freight will be higher for 5,000 tons. Russian barrels have to compete against Iranian origin material when selling into the U.A.E., making it tough for Lukoil to offer competitive prices when the logistics from Volgograd to Hamriyah via Limas terminal are considered. This is without taking into account the freight element from Marmara to Sharjah.

Group III exports from Bahrain are missing off the radar. It is not thought that the refinery has completed a turnaround, although it has now been some six weeks since the start. Al Ruwais continues to load cargoes, one noted of 8,500 tons to receivers in Nantong in mainland China.

Ras Laffan in Qatar continues to provide large cargoes for Shell affiliates globally with cargoes of GTL Group III+ base stocks moving to the Far East, the U.S. and Europe. Cargoes can be any size from 20,000 tons up to 55,000 tons.

Netbacks for Group III base oils out of Al Ruwais are assessed at $1,710/t-$1,755/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 on a FCA basis in U.A.E. sourced from European, United States, Asia-Pacific and Red Sea sources, being resold ex-tank, or on a truck delivered basis within the U.A.E. Prices are re-assessed, with levels lower and now at $1,685/t-$1,735/t for the light vis grades, with 500N and 600N at $1,755/t-$1,800/t.


South African shipping sources have confirmed that a large cargo of 20,000 tons loaded out of Rotterdam and Fawley and will be arriving in Durban during the first part of December. Part of the cargo will then sail to Mombasa for further discharge.

West African reports are scarce this week, with no further news on the 10,000 tons of product moving out of the Baltic. The reasons behind the cancellation or delay to this potential cargo are not apparent, but some sources have suggested that Nigerian receivers are thinking twice about taking Russian export barrels. With options and alternative sources available to traders, U.S. Gulf or even European cargoes may be under consideration, and with a parcel arriving from European major, prices will not have been eroded as to make delivered numbers impossible to negotiate.

Freight rates are still a major headache for traders trying to fix vessels into Apapa, since over the last few months rates have increased by sometimes as much as 50% on rates applying earlier this year. Vessels delivering cargoes into Apapa port have to ballast back to a next load port, which is logistically and financially negative, with vessel running costs at an all time high.

CFR levels for base oils arriving or offered into Apapa are maintained until new evidence of prices comes to hand. Numbers remain as per last, with indications 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 is assessed at around $1,395/t CFR 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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Historic and current base oil pricing data are available for purchase in Excel format.

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