EMEA Base Oil Price Report


Globally, demand for base oils and finished lubricants is largely down from previous years, even from late-year performance during the COVID-19 era. Perhaps as a result of that event, and also because a major conflict is raging within Europe, commercial activities have been the victim of inflation occurring in almost all major economies across the world.

Conditions do vary from region to region. Europe is going through one of the worst recessions in recent times, while the Middle East and Africa show some signs of hope for trade and finance continuing to blossom. However, the pockets of good news are insufficient to quell the concerns that major economies, such as the United States and Europe, could be headed for tough times that could overrun other markets.

The base oil industry is experiencing a downturn without an end in sight. In normal times, markets go through business cycles that can be relied on to help pull demand out of downturns. There is little expectation of that happening in the near term, as governments are focused on taming inflation.

Some market sources are holding out hope that spring will bring back growth to many sectors of the markets, but this seems a questionable proposition at the moment, and the wait for a rebound may be longer.

Refiners have done as much as possible to protect their situation when is comes to base oil production, with many reducing base oil runs in order to maximize fuels output. Base oil margins, which had greatly plumped a few months ago, are now being squeezed.

Crude oil prices eased the past few days, as did petroleum product values, perhaps due to weakening demand. Dated deliveries of Brent crude fell approximately $3 the past week to $95.24 per barrel, still for January front month settlement. West Texas Intermediate echoed this trend, falling to $88.10/bbl, still for December front month.

Low-sulfur gas oil has been discounted heavily during the past week, at times sinking below $1000 per metric ton before settling Monday at $1005/t, now for December settlement. All these prices were obtained from London ICE trading late Nov. 14.


Prices for API Group I exports from Europe dipped this week after some players suggested they might stabilize around last week’s levels. Instead, it appears that demand is still falling, leading to an increase in the amount of product around the market and potential for opportunistic cargoes for regular export destinations. Few export cargoes have actually been transacted, but an oil major is moving a 19,000 ton parcel out of Rotterdam, Netherlands, for Singapore, and a 4,000 ton cargo is loading out of Rotterdam and Fawley, United Kingdom, for two ports in the United Arab Emirates. The former of these cargoes may be an internal shipment meant to balance inventories.

The price cuts have not been dramatic but the continuous erosion to Group I levels is apparent for all to witness. At least base oil margins improved compared to diesel over past week, as diesel prices fell more steeply than Group I values.

Freight prices are still having a massive effect on base oil delivery costs and are causing some receivers to baulk on purchases. Many are accusing traders of taking large profits, but margins are actually stable since freight costs have in some instances more than tripled the past six months.

Vessels with smaller cargoes going into West Africa for example, are having to charge freight rates never seen before for these trades. Vessel owners and operators have blamed recent escalation in costs for crews, insurance and port costs, along with the run-up in fuels.

Prices for Group I exports are now assessed between $980/t and $1,025/t for solvent neutral 150 and $1,055/t-$1,098/t for SN500, which is $20-$25 lower than last week. Bright stock also fell to $1,155/t-$1,220/t, on an FOB basis, as are the values cited for the other grades.

Trade within Europe was reported stable, with few to no changes in prices since the end of October. Some sources suggest that there could be opportunities for buyers to reap the benefits of a year-end sale, but these events are more geared to export markets, where traders taking larger quantities can help refiners clear inventories.

Some larger finished lubricant blenders have reported being approached by certain suppliers offering potential December discounts to take extra quantities of Group I. Some are appraising the situation, looking to evaluate if they will require extra stocks early in the New Year.

The euro managed to breach parity with the dollar, moving back this week to $1.0325, which is marginally improved from two weeks ago. This may alleviate some of the pressure on sales made in euros, where prices had to be increased just to cover the fallen exchange rate.

The price differential between exports and sales within the region is unchanged. There could be an argument for the figures to be adjusted due to export values falling, but considering the few markdowns for intra-regional sales at the start of the month, maintaining the differential is considered correct. The differential is assessed at €95/t-€165/t, exports being lower.

After moving significantly lower at the beginning of November, there seems to still be downward pressure on Group II prices. In a number of cases, sellers have been prepared to offer incentives to buyers who increased their monthly offtake. In the past few months, some buyers had been reticent to take agreed-to quantities since their requirements were down.

Arguments continue about the duty that the European Union charges on imports of base oils and other petroleum products from countries that lack trace agreements with the bloc. Critics of the duty contend that forecasts for growth in Group II demand mean the EU will in the future have to rely on imports of this grade.

Importers from countries without trade agreements claim that they are being unfairly discriminated against – to a tune of $75/t in some cases. Import suppliers say they are committed to the EU market and have declared that they will continue servicing it irrespective of the cost.

Euro prices for Group II base oils are unchanged at $1,470/t-$1,540/t (€1,425/t-€1,495/t) for 100 neutral, 150N and 220N and at $1,635/t-$1,710/t (€1,585/t-€1,655/t) for 600N. Note that dollar prices have risen due to the euro’s improved exchange rate. 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 steady as supply and demand appear stable and fallen feedstock costs have allowed margins to return to levels from a month ago. Sellers – those based within the region as well as those exporting to it – appear content to retain existing market shares.

Large quantities of Group III are flowing from plants in Spain and Finland, which hold full slates of finished lubricant approvals. One cargo of 13,500 tons loaded out of Cartagena, Spain, for export into the West Coast of India. This supplier has the flexibility to supply India from South Korea or Europe.

Prices Group III oils with partial slates of approvals are unchanged at €1,780/t-€1,795/t for 4 and 6 centiStokes and at €1,755/t-€1875/t for 8 cSt, all on an FCA basis ex Antwerp-Rotterdam-Amsterdam or Northwestern Europe. The fact that prices are lower for 8 cSt is an anomaly in the European market.

Prices for fully-approved Group III oils 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 or Northwestern Europe.

Baltic and Black Seas

Baltic cargoes are few and far between, but when they do occur, they are on the large side. One cargo booked firm to load out of Svetly terminal, with up to 15,000 tons of Russian export barrels from Perm refinery, which will be sold into the Turkish market through discharging in Gebze. The vessel is believed to be Turkish-flagged and may have offered charterers an exceptional rate to return to more local markets around the East Mediterranean. This may be why this cargo is loading out of the Baltic rather than being supplied from Volgograd refinery in the south via the river system.

No news was heard on the other large inquiry for 10,000 tons of Russian grades for Lagos. This cargo was to load out of Riga and may be still in the pipeline with financial problems in Nigeria holding matters back. It may be delayed until December.

Russian export activity is much less, with comments received suggesting that production from other Russian refineries is being used in Russian domestic markets due to the withdrawal of a number of majors who would have been supplying finished lubricants into Russia. Communications with sources in Russia and Belarus is exceptionally difficult, as normal routes, such as land lines, mobiles, Skype and Whatsapp, cannot be used.

Gdansk has reappeared with a number of smaller cargoes announced for November going into Antwerp-Rotterdam-Amsterdam and interestingly also a part cargo moving into a Spanish port. Vessels have also loaded out of Gdansk in the past with parcels for receivers in Latvia and Lithuania where blenders are now reliant on European supplies of Group I base oils, rather than opt for Russian export material. A cargo of rerefined base oils is noted moving from Kalundborg, Denmark, with 3,000 tons of product, going into Klaipeda in Lithuania. This cargo will load during the second half of November.

As an indication only, SN 150 loading out of Svetly is estimated at $875/t-$895/t, with SN 500 at $910/t-$940/t.

FOB prices from Gdansk remain are in line with European mainstream numbers and as an indication only SN 150 is given at $975/t-$1,020/t, with SN 500 at $1,050/t-$1,095/t. bright stock is assessed at $1,145/t-$1,210/t.

Black Sea reports contain news of two cargoes potentially being loaded out of Batumi port in Georgia. Suggestions as to the origin of these base oils have been that the material if perhaps coming cross-country from Azerbaijan, or alternatively from Uzbekistan, although quantities are rather large to come out of the latter country. What appears to be clear is that these base oils are not Russian exports.

The two cargoes are on a prompt basis for 5,000 tons each and are primed at the Turkish market. The breakdown of the cargoes is not known, although sources within Turkey commented that two grades will load – SN 150 and SN 500 – with estimated prices CIF Gebze and Diliskelesi at $975/t-$995/t for SN 150, with SN 500 at $995/t-$1,025/t. The prices will be below European Mediterranean prices, which would be offered at around $45/t-$60/t higher, hence the Turkish interest to purchase from this source.

Tupras continues to offer base oils ex-rack from Izmir refinery, with high prices that cannot sell in the local Turkish market. Prices remain around $1,410/t-$1,450/t for SN 100 and SN 150 grades, with SN 500 around $1,525/t-$1,570/t. Bright stock is said to be offered at around $1,710/t-$1,745/t. No tender for an export cargo has been heard as yet.

Limas terminal is to load two cargoes, one of 5,000 tons for receivers in Hamriyah and another smaller parcel of up to 4,000 tons for receivers in Eleusis in Greece. What is unclear is how Russian export barrels can find a way into an EU destination, since this is not contracted trade. The cargo is firm, the vessel fixed and loaded, and it is in route to Greek receivers, hence the interest.

An interesting inquiry is out on the market for a vessel to load a small parcel of around 1,600 tons from Yanbu in Saudi Arabia to go into Izmit with this cargo. This is imagined to be a small quantity of Group II base oils, which will be imported into Turkey and resold on an FCA basis over time. Another shipping inquiry is placed for 2,000 tons to arrive at Gebze from a Korean port. This may either be a cargo of Group II, or more likely Group III grades from a competitor to Cartagena in Spain.

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, which are delivered from Cartagena in Spain during the second half of November, will be priced at around €1,865/t-€1,920/t, on an FCA Gebze basis.

Middle East

Red Sea cargoes returned this week, with a large parcel fixed to discharge into Jebel Ali in the United Arab Emirates. The cargo will comprise of nearly 18,000 tons of various grades loading from Yanbu and Jeddah. Other cargoes are noted, with two lots of 4,000 tons each fixed on separate vessels to move the material into Le Havre. These may be light vis Group II grades that will be resold into the French market.

Middle East Gulf regions report Group I cargoes coming in from suppliers in Thailand and Singapore. At the same time, another inquiry was noted for a 5,000-ton cargo to load out of Hamriyah for discharge into Tampa in Florida. It is difficult to see what this parcel could consist of, because it would be more than unlikely that receivers in Tampa would be purchasing Iranian material. Other sources for this quantity could be Iraq, although no exports have been noted coming out of the southern Iraqi port of Basra.

Sources in the U.A.E. were approached to get to the bottom of this mystery cargo.

The Russian parcel loading from Limas terminal in Turkey will have CIF Prices offered at around $965/t-$995/t for the SN 150, with levels at $995/t-$1,025/t for SN 500. These indications for prices delivered into Hamriyah are very competitive. With the Russian supplier trying to build new destinations for export material, it is thought that the FOB levels will be exceptionally low because freight will be at a premium.

Russian barrels have to compete against Iranian material when selling into the U.A.E., making it difficult for Lukoil to offer competitive prices when the logistics from Volgograd to Hamriyah via Limas terminal are considered.

Group III exports from Bahrain are back on the shipping list this week after the turnaround at the Bapco refinery. Presumably the refinery has restarted the production of Group III base oils, or else this 8,000-ton cargo loaded from stocks accumulated prior to the turnaround. The cargo is destined for Houston, where appointed distributors will receive the cargo and resell in the United States. Al Ruwais will load a prompt cargo of 8,100 tons for buyers in Mumbai and Chennai in a two-port operation. This cargo is in addition to another cargo noted for 8,500 tons for receivers in mainland China.

Ras Laffan in Qatar reports further large cargoes for Shell with gas-to-liquid Group III+ base stocks moving to Asia-Pacific, the U.S. and Europe. For U.S. cargoes, sizes can range from 20,000 tons up to 55,000 tons.

Netbacks for Group III base oils out of Al Ruwais and Sitra 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 FCA prices in markets such as Europe, India and U.S. and are derived and assessed from those regional selling levels, less marketing, handling and estimated freight costs.

Group II base oils on a FCA basis in the U.A.E., sourced from European, U.S, Asia-Pacific and Red Sea sources, are being resold ex-tank, or on a truck delivered basis within the U.A.E. Prices are maintained at levels of $1,685/t-$1,735/t for the light vis grades, with 500N and 600N at $1,755/t-$1,800/t.


South African agency sources indicated that a further large cargo of around 20,000 tons will load from Rotterdam and Fawley prior to sailing to Durban, with options for further discharging in Mombasa and Dar-es-Salaam. The cargo will probably be comprised of all three types of base oil – Group I, Group II and Group III.  

The sole shipping inquiry for Nigeria this week is for a smaller cargo of 5,000 tons to load out of Aghio in Greece. This parcel will be for 5,000 tons of SN 150, SN 500 and SN 900. The trader involved in this deal is not disclosed as yet, and the cargo is not to sail until first half December, meaning that the cargo lot will not form any part of any inventory at year-end. Other West African business is quiet, with talks that there are problems once again with accessing foreign currency to enable local banks to open letters of credit.

It was rumored that a large cargo of around 18,000 tons was to load from the U.S. Gulf during November, but little news was heard on this possibility. Again, there may be financial problems locally in Lagos, delaying or hindering the opening of the letters of credit, which would have a value of around twenty million dollars.

Freight rates are causing ructions and problems in offering CFR prices into the Nigerian market, with suspicions running high with accusations of profiteering and inflating delivered prices. Buyers are seeing reported FOB numbers and are assuming that freight rates were as they were a year ago. Unfortunately, this is not the case, with some rates doubling or even tripling over the past few months. 

CFR levels for base oils offered into Apapa are maintained until new evidence of prices is advised. Levels 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.

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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