EMEA Base Oil Price Report


The oversupply of base oils that rapidly developed during the third quarter now appears to be gradually defusing, thanks largely to many refiners shift feedstock away from base oils to increase production of fuels.

The surplus had been building most rapidly for API Group I base stocks in Europe.

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Group II and Group III base oils are also being affected, although not to the same extent as the Group I camp. For example, European Group III imports from the Middle East Gulf have declined as producers from the latter region are sending more material into the United States, a market where margins are more acceptable and demand is at an all-time high.

European demand for Group II and III has been dropping as economies of the region’s major nations were badly hit by inflationary trends, some stemming from the war in Ukraine and Europe’s historical reliance on Russian imports of natural gas and diesel. With announced EU sanctions on Russian imports almost fully implemented, users of gas and diesel have had to turn to alternative sources.

The economic downturn has pushed interest rates higher, feeding the continuum in an inflationary spiral that has affected demand for many products, including finished lubricants. The hope that 2023 will bring a revival in demand seems optimistic at this time, with most news portraying a negative outlook for many regions across the globe, though some more than others.

In spite of OPEC+ efforts to push crude oil values higher, prices dipped this week amid reports of poor demand and ample supplies of all crudes around international markets. The two biggest consumers – China and the U.S. – have experienced drops in demand for crude and petroleum products, and economies such as India also starting to feel the economic pinch.

At the beginning of this week crude prices plunged – 5.3% in the case of dated deliveries of Brent – and there could yet be downward pressure. Saudi Arabia is poised to increase crude production by some 500,000 barrels per day whilst some other OPEC nations are also contemplating increasing output ahead of the EU embargo on Russian oil. With China enforcing more COVID-19 restrictions in a drive to net zero, the demand picture for crude is not positive.

Dated deliveries of Brent are at $82.90/bbl, still for January front month settlement, down from the high $90s a couple weeks ago. West Texas Intermediate has fallen by a similar amount to $75.85/bbl, also for January front month and around $14 lower than last reported here.

Low-sulfur gas oil passed the $1,000 per metric ton floor on its way to $920 per ton, still for December front month and $85 lower than last week. All these prices were obtained from London ICE trading late Nov. 21.


Prices for Group I exports from Europe appear to have steadied this week, though few trades have actually been completed. Some oil majors are having difficulty achieving inventory adjustments that they targeted and are moving material from Europe to Asia-Pacific markets where demand may be holding up. Demand for European exports is constrained because West African destinations are suffering from a lack of foreign currency and alternative markets such as the Middle East Gulf and India are being serviced by sources in the Far East and the U.S.

Freight remains a negative for shipments of smaller parcels – say, up to 5,000 tons – encouraging traders and receivers to take larger cargoes. Savings on one 10,000 ton cargo compared to two of 5,000 tons is significant – as much as $25/t on a conventional cargo to West Africa, even after accounting for costs of inventory and longer term storage.

Export prices are unchanged this week, with solvent neutral 150 assessed between $980/t and $1,025/t, SN500 at $1,055/t-$1,095/t and bright stock at $1,155/t-$1,220/t.

Trade within Europe is stable, and prices are steady with little or no apparent pressure in either direction. Some sellers are still expressing willingness to do “deals” for larger quantities to be taken during December, but buyers are reticent to commit to taking material that may not get used until the end of January or even into February. There are many unknowns around the markets at this time, including the near-term outlook for finished lubricant demand.

Many market sources predict that normal base oil demand cycles will not resume for some time, largely because of the war in Ukraine and its effects on economies in the region. Russia’s gross domestic products has fallen 4% year to date.

The euro, while still weak, has stayed above parity with the dollar over the past week, moving to $1.0242. The price differential between Group I exports from Europe and sales of the same grade within the region is unchanged at €95/t-€165/t, exports being cheaper.

Group II prices fell again after also decreasing at the end of October or beginning of November. Major players said Group II’s market share appeared to be intact but that sales volumes across Europe have dropped. The price differential between Group II and Group I may be preventing many blending operations from switching to the former grade, and there are even reports of some finished lube blenders switching from Group II to Group I.

Group II values decreased to €1,386/t-€1,455/t ($1,420/t-$1,490/t) for 100 neutral, 150N and 220N and to €1,558/t-€1,630/t ($1,595/t-$1,670/t) for 600N. These prices apply to a range of oils from Europe, the U.S., Asia-Pacific and the Middle East Gulf.

Group III prices are stable on balanced supply and demand. However, less material appears to be coming into Europe from the Middle East Gulf, and sources claim suppliers in that region are diverting volumes to U.S. markets, which appear to be more attractive from a margin point of view. With crude prices in free-fall, feedstock costs are set to dip, alleviating upward pressure on Group III prices.

Distributors are maintaining market share but are possibly supplying less material into the market than compared to last year. Some predict that the market will be revitalized after hostilities in Ukraine cease, whenever that may be. Rising demand for automotive engine oils meeting the latest performance specifications could also boost Group III.

The base oil joint venture in Cartagena, Spain is churning out large quantities of Group III, but the Group III plant in Porvoo, Finland, does not appear to have restarted following a major maintenance turnaround.

Prices for Group III oils with partial slates of finished lubricant approvals are unchanged at €1,780/t-€1,795/t for 4 and 6 centiStoke grades and at €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 will 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. These prices apply to FCA sales from hubs in Antwerp-Rotterdam-Amsterdam or Northwestern Europe, as well as delivered prices from Cartagena to receivers in France and Italy.

Baltic and Black Seas

The Baltic Sea region saw a number of large cargoes of both Russian export barrels, and also material coming out of Gdansk refinery. Two large cargoes loaded in the past 10 days – the first out of Svetly in Kaliningrad, where 10,000 tons of Lukoil base oils, possibly from Perm refinery, loaded on a Turkish-flagged vessel for receivers in Gebze. The second cargo loaded out of a terminal in Riga with 12,000 tons of SN 150, SN 500 and SN 900, for receivers in Apapa, Lagos. It was assessed that this parcel was under the auspices of traders.

Another interesting cargo movement is a vessel loading 3,500 tons of Russian product out of Vyborg port in the Gulf of Finland. This bridging cargo will go into Riga and Liepaja. The reason for this “new” route could be that trains carrying base oils coming through Latvia may be a political problem, although Kaliningrad as a Russian enclave is still being supplied by trainloads moving through Lithuania.

The large inquiry for 12,000 tons of Russian grades for Lagos was eventually covered. This took a little longer than anticipated, perhaps due to financial problems in Nigeria for obtaining foreign currency to enable the opening of the letter of credit.

FOB prices for SN 150 for this loading are assessed at $875/t-$895/t, with SN 500 at $910/t-$940/t and SN 900 at $945/t-$970/t.

Another shipping inquiry for a delivery into the Baltic is for 7,000 to 12,000 tons of base oils to load out of either Port Arthur or Pascagoula in the U.S. Gulf. This potential cargo will discharge into Riga, and while this may be a cargo of Group II base oils, this is unconfirmed as yet. There is an inquiry to load 3,000 tons out of Riga port for receivers in Hull, on the east coast of the United Kingdom. This is difficult to fathom, although there is a U.K.-domiciled Russian importer who may be taking this material into the U.K. and reselling on a break/bulk basis. Many U.K. blenders will not take Russian export barrels.

The large quantities of base oil that previously came out of Rosneft and Gazprom refineries such as Angarsk and Omsk are no longer visible to observers of Baltic activity, suggesting that production from those refineries is being used in the Russian domestic markets. That is due in no small part to the withdrawal from Russia of a number of majors such as BP and ExxonMobil, who would have previously supplied finished lubricants into that market.

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.

Gdansk is quoted in an inquiry to load out of four north European ports – including Rotterdam, Antwerp and Dordrecht – before the vessel sails to Tarragona in Spain at the end of this month. The loading procedure appears to be very precise. Also, buyers in the east coast of the U.K. are looking at a December cargo from Gdansk, which is possibly a substitute for Russian exports from the past.

FOB prices from Gdansk remain in line with European mainstream numbers, and as an indication, SN 150 is placed 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 and Turkey news has cargoes coming into Gebze from Svetly, and also material bridged through Limas terminal, with 7,000 tons loading for receivers in Hamriyah, in the United Arab Emirates. The outgoing cargo from Limas is being sold by Lukoil, using base oils coming out of Volgograd refinery. This material is transported down the Volga River and then across the Black Sea to the Limas terminal in Marmara. What is interesting is that the same supplier is moving material from the Baltic to Turkey, while at the same time taking material from Limas and exporting to the U.A.E.

The barrels from the Baltic are estimated to arrive in Gebze, with prices at $975/t-$995/t for SN 150, with SN 500 at $995/t-$1,025/t.

Turkish refiner from Izmir refinery, Tupras, maintains offers for base oils ex-rack, still with high prices that will not sell in the local Turkish market. Prices are believed to be 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.

A shipping inquiry is placed for 2,000 tons to arrive in Gebze from South Korea. This may either be a cargo of Group II, or more likely Group III grades from a competitor to Cartagena in Spain. This inquiry, if for a part-cargo would be feasible, but if on a stand-alone basis, the freight rates will be too high to make this movement possible.

Imported Group II prices ex-tank are estimated to be priced lower this week and will now lie at €1,610/t-€1,655/t for the three lower vis products, with 600N at €1,675/t-€1,730/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 being delivered from Cartagena in Spain will be priced at around €1,865/t-€1,920/t on an FCA Gebze basis.

Middle East

Red Sea cargo reports have one large parcel of 18,000 tons of Group I and Group II base oils loading from Yanbu and Jeddah before sailing to Mumbai anchorage. Other cargoes are planned for 6,000 tons of Group I base oils discharging into Hamriyah port and a smaller cargo loading only from Yanbu, with 1,800 tons of Group II grades for receivers in Singapore.

Middle East Gulf regions report Group I cargoes coming in from suppliers from Taiwan, Thailand and Singapore, with most of these parcels relatively small, with 2,000-3,000 tons the norm. At the same time a cargo of 5,000 tons of Group II base oils will load from Korea, and all of these cargoes will discharge into Hamriyah.

The 7,000 tons of Russian barrels from Lukoil in Limas terminal will also discharge into receivers tanks in Hamriyah. Lukoil appear to be setting up a regular supply route to the U.A.E., with a number of cargoes loading out of the Turkish terminal. They are competing against the supplies of “local” availabilities from Sepahan refinery in Iran. CIF prices are offered at around $965/t-$995/t for the SN 150, with levels at $995/t-$1,025/t for SN 500. 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.

No further information has come to light regarding the cargo to load out of Hamriyah for receivers in Tampa, Florida. The shipping inquiry disappeared, suggesting that the operation was flaky.

A further cargo of around 4,000 tons will load out of Rotterdam and Fawley for a oil major, and the parcel will two-port discharge in Fujairah and Jebel Ali, U.A.E.

Middle East Gulf outgoing Group III exports from Al Ruwais and Sitra are noted, with two Adnoc parcels loading during the first part of December. The first will consist of up to 10,000 tons for Mumbai anchorage, while the second cargo will load 7,500 tons for distributors in Nantong, mainland China. Bapco will load a smaller feeder cargo out of Sitra, which will re-supply stocks in Jebel Ali that are used for local distribution in the U.A.E.

Ras Laffan in Qatar reports further large cargoes for Shell, with GTL Group III+ base stocks moving to Asia-Pacific, the United States and Europe. For U.S. cargoes, sizes can range from 20,000 tons up to 55,000 tons. Cargoes to load prior to the year end will be destined for the U.S., China and Hamburg in Germany. Parcels are expected to be around 25,000 tons each.

Netbacks for Group III base oils out of Al Ruwais and Sitra are maintained 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., which are sourced from European, U.S, Asia-Pacific and Red Sea sources, are resold ex-tank, or on a truck delivered basis within the U.A.E. Prices are taken lower after general discounting across markets, with levels at $1,635/t-$1,685/t for the light vis grades, with 500N and 600N at $1,695/t-$1,760/t. The high end of the range refers to road tank wagon-delivered product.


South Africa is quiet this week, with more news of further large cargoes from a major out of Rotterdam and Fawley to follow in a couple of weeks.

In West Africa, and specifically Nigeria, there are terrible problems with finances. Getting hands on dollars – any foreign currency – to enable local Nigerian banks to open letters of credit is a real problem. Traders suggested that there is little point in getting into negotiations at this time, because banks do not have the capability to provide the necessary financial instruments to function. There are no offers on the table currently from usual suppliers. Only one cargo has been loaded for receivers in Apapa, and the outlook looks bleak. Stocks of base oils are low, and without replenishing these stocks, the lubricants industry in Nigeria may grind to a halt.

The Russian cargo of 12,000 tons that loaded out of Riga may be the only supply going into Nigeria before the year end. One assumes that the letter of credit was issued from a Nigerian bank and confirmed by a prime European bank prior to the vessel loading and sailing for Lagos.

The loading of either Greek or U.S. cargoes will have to wait until currency is available for the banks to go into action.

Freight rates are still a major headache in offering CFR prices into the Nigerian market, with buyers seeing reported FOB numbers and assuming that freight rates are still low. This is not the case, with some rates doubling or even tripling over the past few months. 

CFR levels for base oils to go into Apapa notional since traders will not commit to suppliers until the financial mess is sorted out. Levels are given as indications only, at around $1,255/t for SN 150, SN 500 at around $1,300/t, and SN 900 at $1,345/t. Also, as an indication only, bright stock remains 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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