EMEA Base Oil Price Report


As base oil trading starts to slow ahead of the Christmas and New Year celebrations, buyers are less active even in areas not observing the Christian festival. Sellers are looking forward to the New Year, hoping for positive signs and a return to increased activity and “healthier” markets.

Most predictions, however, call for lower demand to continue at least through the first quarter of 2023, after which markets may start to pick up if inflation continues to retreat and improved financial forecasts come to fruition. It may take some months, if not years, to reach target inflation figures, but there are positive indicators of progress in the right direction.

The plum would be a peaceful settlement to the war in Ukraine, with Russian withdrawing from annexed territories. Resolution to the conflict would mean that Ukraine’s economy could restart to rebuild and the European continent reduce its financial support for the country.

Base oil prices throughout Europe, the Middle East and Africa are muted since less activity means fewer opportunities for them to change. The overall sentiment across all product groups is that values are weakening going forwards into the New Year. With demand remaining elusive, pressure is on for producers to maintain base oil margins.

The differential between prices for base oil and diesel has fallen, reversing the incentive for refiners to max out on diesel and other distillate production. But refiners are not tilting the other direction either, since base oil markets remain dull and since values there continue to erode.

There are few signs of year-end selling in any sectors of the market, although a couple European Group I sellers are touting specific light grades. Their problem is that these grades are not suited to export destinations, and buyers within the region are not in the frame to boost inventory totals as the year wanes.

Many blenders across the regions are reducing operations or have already closed for maintenance and repair until January. This in itself further curtails market activity.

Crude oil prices, which had been retreating since a surge at the beginning of December, stayed relatively level the past week. Crude appears inherently weak at the moment, although the Saudis and Russia have mulled further production cutbacks that would be aimed at inspiring prices to rise. Analysts see this as less of an option for Russia since oil is now one of its few good economic assets.

Dated deliveries of Brent crude are still below $80 per barrel at $79.75 for February front month settlement. The lack of significant movement over the past week perhaps suggests stability that stems in part from large consumers such as China still wrestling with economic problems that do not appear likely to end soon. West Texas Intermediate was also little changed at $74.80 per barrel, still for January front month.

Low-sulfur gas oil rallied and then dropped again this week, not following a logical path since prices had been declining despite high demand. This product currently posts at $897 per metric ton, now for January front month. All of these prices were obtained

from London ICE trading late Dec. 19.


Without many deals to reflect on, prices for European Group I exports are being established here based on sellers’ offers, most of which have not been taken up by buyers. Oil majors continue moving large parcels to base oil hubs for distribution to local markets.

Whilst European export prices would now be competitive against sources from other regions, but many European producers have few quantities to offer into the export market. Refinery runs were cut during October and November, leaving little surplus for export destinations such as the United Arab Emirates, India or West Africa.

Nominal prices – offered only on an indication basis – are unchanged at between $925 per ton and $965/t for solvent neutral 150, $985/t-$1,025/t for SN500 and $1,035/t-$1,100/t for bright stock.

Trade of Group I within Europe is quiet and getting quieter. With many operations closing during this week until January 9th, there is little potential for buying between now and the start of the New Year. Some players will maintain office staffing between Christmas and New Year, but with many taking the opportunity to socialize over the period, deals will not be firmed up until into January.

Some blenders said they have made commitments to purchase material early in January, citing very low levels in storage tanks. Some companies have already stopped day-to-day production of finished lubes and are presently engaging in maintenance work. Even this activity will cease toward the end of this week.

Sellers had offered lower prices on some lighter grades, but few deals have been struck over the past week. For sales within Europe, prices are at €1,120/t-€1,130/t for SN150, €1,255/t-€1,325/t for SN500 and around €1,625/t for bright stock, where it is available.

The euro has continued to claw its way upwards against the dollar, this week reaching an exchange rate of $1.06324. Analysts predict the euro will continue to strengthen against the dollar.

The differential between domestic and export prices has widened to €175/t-€425/t, exports being lower. These levels are extremely high thanks to high values for trade within the region, perhaps suggesting downward pressure on those prices.

Group II prices appear to have stabilized, at least up until the end of December. Negotiations are in progress this week to establish levels for January. Suppliers are arguing against further markdowns, stating that they have already gone through a major discounting spree, while buyers contend that more cuts are in order because of falling raw material costs the large differential between Group I and II numbers.

Following price reductions by one major reported here last week, other suppliers followed suit – in some cases announcing even bigger cuts. Some industry sources are forecasting that Group II demand will bounce back toward the middle of 2023. Some contend that demand will surge sooner if peace comes to Ukraine.

Group II prices are unchanged this week, recognizing that the previously mentioned negotiations are underway now. Prices remain at $1,265/t-$1,407/t (€1,200/t-€1,335/t) for 100 neutral, 150N and 220N and at $1,410/t-$1,460/t (€1,335/t-€1,385/t) for 600N. These levels apply to a range of Group II from Europe, the United States, Asia-Pacific and the Middle East Gulf.

Group III prices are unchanged and appear to face little downward pressure. It has been heard that distributors and resellers are trying to roll over the prices from December into January, quoting that the market is relatively tight, even with replenishment cargoes arriving in force from the Middle East Gulf, and with large quantities being transported to Northwestern European hubs from Spain and the United States West Coast.

Prices for Group III oils with partial slates of finished lubricant approvals are unchanged since markdowns early this month. Four and 6 centiStoke oils are at €1,720/t-€1,765/t and 8 cSt at €1,695/t-€1,745/t, all on an FCA basis ex Antwerp-Rotterdam-Amsterdam or Northwestern Europe.

Group III oils with full slates of approvals are also unchanged at €1,775/t-€1,825/t for 4 cSt and at €1,790/t-€1,840/t for 6 and 8 cSt. These prices refer to FCA sales from hubs in Antwerp-Rotterdam-Amsterdam or Northwestern Europe and to sales on a CIF basis from Cartagena, Spain, to receivers in France and Italy, , with 6 cSt and 8 cSt oils between €1790/t-€1840/t. These prices refer to FCA sales from hubs in Antwerp-Rotterdam-Amsterdam or northwestern Europe. Sales of cargoes delivered from Cartagena, Spain, to receivers in France and Italy are expected to reflect a wholesale element rather than FCA values, suggesting CIF prices of around €1,685/t-€1,755/t.

Baltic and Black Seas

Following the reports of a number of shipping enquiries to move material from Baltic ports to various end destinations including Gebze in Turkey, only one firm fixture was reported. That was 3,000 tons of Russian export barrels from Riga going into Gebze. Other cargoes from Svetly, in Kaliningrad, do not yet appear to have vessels fixed. The cargoes to the United Arab Emirates and Mumbai anchorage have not yet been fixed, perhaps because the sales for these cargoes have not been confirmed by receivers. This is certainly the case in the U.A.E., where buyers were disappointed in the CFR prices offered. Apparently, this could have been down to the high freight element, which hiked the price to an unacceptable level.

The freight costs from Baltic to Hamriyah for 6,000 tons of two grades of base oils are estimated to come in at around $120/t, which could render offers too high on a delivered basis. Russian base oils would have to compete against availabilities from Sepahan refinery in Iran, which could be delivered in small cargoes into Hamriyah, and also Group I supplies from Yanbu and Jeddah, all at lower numbers.

The inquiries are no longer appearing in shipping reports, suggesting that it may be uneconomic to supply into the west coast of India and the United Arab Emirates from Baltic sources.

Also, the supplier, Lukoil in this case, may have had problems in finding suitable vessels to perform these voyages.

Latvian transit appears to be permitted under EU sanctions, so as long as Russian barrels are not bound for any sanctioned destinations. Base oils are made available CPT Latvian/Russian border, where railcar bogeys are changed. Trains carrying typically around 3,000 tons of base oils then travel onwards to discharge into shore storage in Riga, and occasionally Ventspils.

Supplies of base oil also transit through Lithuania before entering Kaliningrad and discharging into Svetly terminal for Lukoil.

FOB prices from Riga for SN 150, and as an indication only, remain assessed at $835/t-$865/t, with SN 500 at $875/t-$910/t.

SN 150 loading out of Svetly is estimated at $825/t-$855/t, with SN 500 at $845/t-$890/t.

Gdansk has limited availabilities for inquiries, although there are few buyers looking to take material at this time of year. Apparently, there are some suggestions that material will be required in January for receivers in the east coast of the United Kingdom, where Gdansk may be the preferred supply point. 

FOB prices from Gdansk remain in line with European mainstream numbers. As an indication, SN 150 is placed at $930/t-$970/t, with SN 500 at $990/t-$1,030/t. Bright stock is assessed at $1,035/t-$1,100/t.

Black Sea reports are that the Volga river system is still navigable, and material is still flowing down river and entering the Turkish market. How much longer this can continue, due to ice starting to impede vessels using this route, is unknown and comes down to the weather conditions. The river normally has a couple of months when ice becomes a factoring. These supplies of Group I base oils are from Volgograd refinery.  

Base oils from Limas terminal have estimated FOB prices around $855/t-$865/t for SN 150, with SN 500 at $870/t-$895/t. Prices refer to products out of Volgograd refinery, discharged into storage at Limas terminal, then re-loaded on sea-going vessels for buyers in the U.A.E., the west coast of India or Singapore.

Tupras, the Turkish refiner with the refinery at Izmir, has eventually aligned prices that could be deemed as feasible for the Turkish market. Levels are at $889/t for SN 150, $1,035/t for SN 500 and bright stock at $1,250/t. These prices are by truck ex refinery and can be purchased in Turkish lira. 

Turkish buyers are still pondering potential cargoes from Livorno and Aghio for January, but prices still remain high versus Russian barrels. Offers for Mediterranean barrels are heard around $1,020/t-$1,035/t for quantities of SN 150, with SN 500 and 600 at around $1,055/t-$1,075/t, and indications for bright stock from Livorno may be around $1,125/t-$1,155/t basis CIF Gebze or Derince.

Imported Group II prices on an ex-tank basis are taken a little lower this week, following new prices levels on the European mainland, and are now assessed at €1,485/t-€1,565/t for the three lower vis products, with 600N at €1,590/t-€1,640/t.

Group III base oils also sold on an FCA basis for partly-approved grades remain assessed at €1,765/t-€1,800/t. Fully-approved Group III grades delivered into Gebze from Cartagena in Spain, or alternatively from South Korea, will be priced at around €1,795/t-€1,855/t on an FCA Gebze basis.

Middle East

Red Sea reports contain the news that one large cargo of some 13,000 tons of Group I and Group II base oils will load from Yanbu to supply receivers in Karachi in Pakistan, then sail to Hazira and Mumbai anchorage in the west coast of India with the balance of the cargo. Also, there is a suggestion that a contract supply will take place with 4,000 tons of base oils moving from Yanbu to Durban. This voyage will take place four time a year, starting in January, followed by, April, the July and finally the same quantity in October. Additionally, a further cargo of 3,000 tons of bright stock will load out of Yanbu later this week for usual receivers, Egyptian General Petroleum Corp., in Alexandria.

In Middle East Gulf regions cargoes are noted coming into Hamriyah from Rayong in Thailand. The vessel inquiry also has the options to discharge into Mumbai anchorage. should the U.A.E. offer be turned down. The cargo will be comprised of 3,000 tons of Group I base oils, possibly three grades.

The European sourced cargo of 10,700 tons coming out of Rotterdam and Fawley was resurrected and is primed to load in those ports around mid January. The vessel that will be chartered to cover this voyage will first call at Yanbu, then onwards to Fujairah and finally Jebel Ali in the U.A.E.

Large quantities of Group III base oils are identified loading out of Sitra, with two vessels fixed firm to load two cargoes. The first will take 17,000 tons of Group III grades to Rotterdam on behalf of Stasco, while the second will load an exceptionally large quantity of 20,000 tons for Hamriyah. The latter is for distribution throughout the U.A.E. This vessel may return to Sitra to load a further cargo of another 20,000 tons for distributors in the U.S. The vessel will load and sail for a U.S. Gulf Coast port around the end of December, following discharge in Hamriyah.

A further 15,000-ton parcel will also load out of Bahrain for receivers in the west coast of India, presumably in Mumbai anchorage. This loading will take place during the first week in January.

Following the turnaround at Sitra, all appears to be back to normal production. The latest quantities loaded out of this location come to around 100,000 tons in total being loaded out of Bahrain during December and early January.

A large parcel of 29,000 tons of Group III+ base oils from Ras Laffan in Qatar, and possibly Sitra, will move this material to the Mediterranean and also Antwerp-Rotterdam-Amsterdam. This cargo will be distributed into the Shell system for in house blending and also for formulating Group III packages, combining with additives prior to reselling.

Netbacks for Group III base oils out of Al Ruwais and Sitra remain unchanged and are assessed at $1,690/t-$1,725/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, U.S., and China and are derived and assessed from regional selling prices, less marketing, handling and estimated freight costs.

Group II base oils that sell on a FCA basis in U.A.E. can be sourced from European, U.S, Asia-Pacific and Red Sea sources, and are resold ex-tank, or sometimes on a truck delivered basis within the U.A.E. Prices are taken down, following the changes initiated in Europe and other markets, with levels revised at $1,540/t-$1,575/t for light vis grades, with 500N and 600N at $1,600/t-$1,670/t. The high ends of the ranges refer to road tank wagon-delivered base oils.


South African news only confirms the large cargo of 16,380 tons of various base oils and chemicals will load out of Rotterdam and Fawley this week. Additionally, the cargoes that will arrive from Yanbu are expected to be Group II base oils and will form part of contracted supplies into South Africa commencing early next year. Cargoes from this seller have already breached the market in South Africa, this being an extension of the primary supplies into that region.

Nigeria continues to incur financial problems, with no news of any further supplies being arranged for receivers in Lagos. The market has to be extremely short of base oils for blending purposes, and one would have thought that the Nigerian government, or Nigerian National Petroleum Corp. would have acted to allow access to foreign currency to allow local banks to open letters of credit to permit the purchase and importation of cargoes of Group I base oils into this market.

West African activity has been rekindled, with a prominent major organizing a smallish cargo for receivers in two ports. A cargo totaling around 5,000 tons will discharge into Conakry in Guinea and Abidjan in Cote D’Ivoire during February, having loaded out of the two usual ports of Rotterdam and Fawley during early January.

Nigerian banks are still unable to get hands on U.S. dollars to enable the opening of letters of credit. After the local banks issue the letter of credit, it must be processed through a prime European bank, where confirmation is added to the letter of credit, allowing the document to be able to issue payment.

Traders are awaiting news from Nigeria on the latest status of the banking system before acting to look at purchasing cargoes for sale in Apapa. Their hands are tied, because a letter of credit is necessary and required under Nigerian regulations for the importation license to take in cargoes of base oils. This is apart from the security of having a confirmed letter of credit, guaranteeing payment for the cargo.    

The Lukoil cargo of 12,000 tons of Russian material from the Baltic will be the sole cargo arriving into Nigeria during December.

CFR levels for base oils to going into Apapa remain unchanged, given source information from agency staff in Apapa. However, these numbers are given as indications only, since prices can change following negotiations. Also, it should be mentioned that Russian price levels are exceptionally keen and competing against these numbers with regular Group I supplies from Europe or the U.S. may prove to be very difficult. Russian quality and specifications are lower than mainstream material, but in Nigeria price remains paramount.

Levels are advised as indications only, with freight costs being a large part of the final prices. Prices are placed at around $1,085/t for SN 150, SN 500 at around $1,120/t, and SN 900 at $1,165/t. Also, as an indication only, bright stock is assessed at around $1,245/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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