EMEA Base Oil Price Report


Lubricant blenders throughout Europe, the Middle East and Africa are making smaller base oil purchases than is normal for this time of year, continuing to run down stocks rather than replenishing inventories on a large scale.

Traditionally, buyers flock to the markets during February and March to ensure a supply of raw materials for upcoming demand. This is not yet taking place this year as buyers appear comfortable with the amount of freely available supplies of all types of base oils. This attitude applies even to the Group III segment, where some allocation programs have been introduced, limiting supplies of these products to the markets.

Should demand for base oils start to rise, then this may test the availability situation, with some forecasting that pressure will build to find cover for all requirements. Positive signs from a number of major economies in the region, such as Germany, Italy and Spain, could ignite a purchasing spree that could tighten supply, especially for API Group l oils since producers are diverting feedstock to production of diesel, which is enjoying unusually high margins.

Currently, Group I prices are firming, with Group II numbers coming off following downward moves from a major supplier. Group III prices remain high, amidst a market where supply is tight, with few options to increase quantities of these grades in any of the European, Middle Eastern and African regions.

A number of maintenance turnarounds could further exacerbate problems on the supply side, with Group I units being most affected by maintenance programs.

Crude prices steadied over the past week as forecasts mooted that crude supply may shorten later this year. This greatly depends on whether the Chinese markets reacts with positive sentiment following the relaxation of COVID-19 restrictions. Some players are stating that it may take some months to re-establish economic activity to pre-pandemic levels.

Dated deliveries of Brent crude rose around $1.50 over the past week to $84.50 per barrel, now for May front month settlement. West Texas Intermediate crude is at $78.45/bbl, still for April front month, leaving the crack at around $6.

Low-sulfur gas oil prices appear to be relatively stable at $846 per metric ton still for March front month. These prices were gathered from London ICE trading late March 6.


Prices for Group I exports from Europe are firmer, with sellers reticent to engage in discussions of counteroffers. Trade remains thin in this sector of the Group I market; few destinations are showing interest to take large swathes of European base oils.

The Nigerian market remains closed due to financial problems, although one major has embarked on a large supply of some 14,000 tons of Group I grades to receivers in that country. This is being transacted on almost an affiliate basis, which may allow flexibility on payment and import license.

Prices are higher by some $10/t-$25/t from last week, and are showing signs that prices may climb further with feedstock levels remaining higher than last month.

Offers are limited for traders, with few inquiries for genuine export deals. There are a number of cargoes reportedly being worked for Turkish blenders looking for higher quality base oils to manufacture finished lubricants that will be exported to neighboring countries.

Russian imports continue into Turkey, although comments received last week would suggest that a peak has been reached and that there are limited opportunities for increased quantities of Russian base oil barrels finding their way into the Turkish market.

Prices rose some $10 to $25 since last week and are now assessed between $935 per ton and $955/t for solvent neutral and at $960/t-$1000/t for SN500. Bright stock prices have not moved in tandem with the solvent neutrals, remaining at $1,095/t-$1,140/t.

Restocking also lags for Group I trade within Europe. Some blenders suggested that there is ample availability for all Group I grades in spite of the ban on Russian imports. Maintenance turnarounds will start in a number of refineries within the next couple months, affecting overall availabilities for Group I grades, but even this news does not appear to instill any urgency on the part of buyers.

Prices are at €1,090/t-€1,130/t for SN150, €1,145/t-€1,185/t for SN500 and around €1,400/t for bright stock.

The euro has stabilized, and its exchange rate against the United States dollar rose a bit the past week to $1.06301. The differential between exports from Europe and sales within the region is unchanged at €120/t-€210/t, export prices being lower.

Nearly all Group II suppliers in Europe have fallen into line with the recent round of price cuts. Some concern is developing that with Group III prices remaining strong, the differential between Group II and Group III is now the highest ever, with an average of around €1,000/t separating these two groups. Some are postulating that Group III prices will have to fall, but the tight level of supply suggests pressure that could buoy values in that category.

Group II prices are unchanged at $1,045/t-$1,050/t (€990/t-€1,000/t) for 100 neutral, 150N and 220N and at $1,270/t-$1,290/t (€1,200/t-€1,220/t) for 600N. These prices apply to a broad range of Group II base oils from Europe, the U.S., Asia-Pacific and Red Sea sources, supplied either in bulk or in flexi-tanks.

Group III base oil markets around Europe remain tight with limited supply options available to increase quantities of these grades entering the European arena. Allocation programs for grades with full slates of finished lubricant approvals – and those that formerly had full slates – are now in place, and buyers are being limited to 50%-80% of last year’s offtake.

A couple of cargoes are coming out of the Middle East Gulf with a combined 20,000 tons of partly-approved Group III grades for import into Northwestern Europe. Another large parcel of 17,000 tons is being transhipped into the Rotterdam hub from Cartagena, Spain. New sellers from Asia-Pacific are trying to make inroads into the lucrative European markets with 4 centiStoke oil being pitched at around €1,850/t.

As mentioned previously, the current tightness in this segment makes the prospect of markdown seem unlikely in one sense, but the price differential between Group II and Group III is significant and could alter blenders’ programs dividing usage between these two types.

Prices for Group III oils with partial slates of approvals are unchanged at €1,780/t-€1,850/t for 4 and 6 cSt at €1,765/t-€1785/t for 8 cSt, all on an FCA basis ex Antwerp-Rotterdam-Amsterdam or Northwestern Europe.

Group IIIs with full slates of approvals are assessed at €2,000/t-€2,025/t for 4 and 6 cSt, while 8 cSt is available at around €1,935/t-€1,985/t, though demand for this grade is low within Europe. These prices refer to FCA sales from hubs in Antwerp-Rotterdam-Amsterdam, Northwestern Europe and ex refinery sales from Spain.

Baltic and Black Seas

Baltic trading shows a further three parcels offered from Svetly terminal in Kaliningrad. These large parcels of Russian export grades are offered to receivers in the west coast of India, the United Arab Emirates and Gebze in Turkey. Freight costs will be high for these cargoes hence the larger quantities the better to offset freight rates. Logistics are negatives for material moving from the Baltic to locations such as India and U.A.E., also voyage times are against these trades with the lengthy time taken to deliver tying up capital for many weeks. Other suppliers have the edge when it comes to chartering a vessel.

An interesting development is that the Latin American base oil markets are finding difficulties in covering requirements for Group I base stocks from the United States, where supply is decreasing as Group I production is run down. This could be an excellent opportunity for sellers such as Lukoil, who are keenly looking for new outlets for Russian export barrels, following the European Union and Allied ban on imports of all Russian hydrocarbon products. Whether Russian specs can meet required level may be an issue, but with low prices and good availability this could be an avenue for barrels from Kaliningrad and Black Sea.

FOB prices from Svetly for SN 150 continue to be indicated at existing levels at $685/t-$735/t, with SN 500 considered to be at $755/t-$785/t. Prices are no longer related to other European Group I levels and may not be generally published, since each deal may be evaluated on the basis of moving product rather than making profit from the trade.

FOB prices for Group I material from PK Orlen from Gdansk refinery are included as part of European mainstream pricing. SN 150 is assessed at $940/t-$965/t, with SN 500 at $965/t-$1,010/t, depending on destination. Bright stock is assessed at $1,100/t-$1,155/t.

Turkish buyers are looking to the Mediterranean for supplies of higher quality Group I than the material imported from Russia. There are requirements for higher spec base oils to be used in blends for a number of finished products. However, Russian Group I base oils will continue to be a mainstay of Turkish imports, but it is felt that Turkey cannot absorb more Russian barrels than at present due to limitations on quality and specification. Russian solvent neutrals have typically lower viscosity index and are darker in color.

A cargo of up to 10,000 tons from Svetly is being contemplated for early March, going into two Turkish ports – Gebze and Derince. The two-port discharge will add cost to the already high rates from the Baltic to Marmara.

Turkey is regularly importing around 40,000 tons of Russian base oils every month.

A number of Group I cargoes are fixed coming out of Livorno and Aghio. A parcel of 5,000 tons is loaded out of Aghio, while another 3,000-ton cargo from the same source will discharge into another Marmara port.

Imports from Livorno and Aghio have prices heard at around $975/t-$1,000/t for quantities of SN 150, with SN 500 and 600 at $1,000/t-$1,045/t, on a CIF basis. Bright stock may be included from Livorno, with a price of around $1,175/t CIF Gebze. 

The Tupras announcement has yet to hit the market regarding the future of base oils from the refinery at Izmir. Currently, production of base oils has ceased and there may be a case for not restarting production. Prices for material that is still in tank is priced in Turkish lira, and dollar equivalent numbers are $915/t for spindle oil, $1,060/t for SN 500, and bright stock is at $1,270/t. All prices are based on truck FCA sales.

Group II prices ex-tank are maintained and are assessed at €1,285/t-€1,365/t for the three lower vis products – 100N, 150N and 220N – with 600N at €1,490/t-€1,535/t. Supplies of Group II grades arrive from the Red Sea, the U.S., and South Korea.

Group III partly-approved base oils, sold on an FCA basis, are assessed at €1,865/t-€1,900/t. Fully-approved Group III grades delivered into ports such as Gemlik from Cartagena in Spain are priced at around €2,250/t-$2,300/t FCA.

Middle East

Red Sea destinations for cargoes loaded, and loading during March are many, with 19,000 tons of material coming out of Yanbu and Jeddah for the U.A.E., 10,000 tons for South Africa and 18,5000 tons for the west coast of India. Additionally, smaller parcels will travel to Egypt, Singapore and Sudan later in March. The cargoes will be a combination of parcels of Group I and Group II base oils.

The Middle East Gulf has Group I and Group II cargoes forming the basis of base oil imports into the region, while Group III parcels from Sitra and Al Ruwais are the exports coming out of the Gulf. Other exports are Iranian SN500 – although this is currently in limited quantities – and Iranian rubber process oil, which is shipping out of the port of Ras Al Khaimah to receivers in South Korea and the west coast of India.

Cargoes of Group I base oils coming into the U.A.E. will discharge during March from Rayong in Thailand and will discharge into storage in Hamriyah and Ras al Khaimah. Ras Al Khaimah continues to play an increasingly mainstream role as a port in the U.A.E.

On investigation, it transpires that Indian refiners who are purchasing large quantities of Urals crude oil from Russia at extremely low prices – suggested to be around $40 per barrel – are being incentivized to produce more base oils than normal. These base stocks are forming a base for exports from India, which is why a number of imports into the U.A.E. have been recorded, sourcing from Haldia and Chennai refineries. This has caused a reversal of the usual trading flows, but the material is substantially higher spec than Russian material offered from the Black Sea and Baltic and is keenly priced, ruling out alternative Group I supplies from either the U.S. or Europe. These trades all continue and may grow as long as Indian refiners are taking discounted crude from Russia.

Prices heard are CIF U.A.E. numbers are around $885/t for SN 150, SN 500 at $905/t and bright stock at $1,080/t. By selling discounted Urals crude to India, Russia is also spiking the sales of Russian base oils from suppliers such as Lukoil into India and the U.A.E.

Alternative Group I base oil cargoes are still being offered from mainland Europe and the U.S. Gulf Coast, with options for discharge into the U.A.E. or the west coast of India.

Russian offers from Kaliningrad are combined with other offers from Limas terminal in Turkey. Russian suppliers, Lukoil / Litasco are offering exceptionally low prices to maintain the U.A.E. market.

The second ExxonMobil cargo of 12,000 tons sailed to top-off in Sicily with a combination of Group II and Group I base oils. The vessel will call at Yanbu, then discharge in Jebel Ali.

Larger than normal cargoes are loading out of Al Ruwais and Sitra for destinations in export markets such as China, the U.S., Europe and India.

Traders will load 11,000 tons out of Al Ruwais for distribution in Europe, with another 9,000 tons loading out of Sitra for Antwerp-Rotterdam-Amsterdam. Other parcels from both ports will load for Nantong and the U.S. Gulf Coast. 

Netbacks for partly-approved and non-approved Group III base oils loading out of Al Ruwais and Sitra are maintained this week. Netback returns are assessed at $1,745/t-$1,795/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, the U.S., and China. Netback levels are derived from regional selling prices, less marketing, margins, handling and estimated freight costs.

Group II base oils selling FCA basis in the U.A.E. are sourced out of European, U.S, Asia-Pacific and Red Sea producers. These grades are available FCA U.A.E., or on a truck-delivered basis within the U.A.E. and Oman. Prices are modified this week, with levels at $1,420/t-$1,465/t for the light vis grades, with 500N and 600N at $1,495/t-$1,535/t. The high ends of the ranges refer to road tank wagon-delivered base oils.


South African shipping sources have confirmed yet another large cargo for 15,000 tons of Group I, Group II and Group III grades that began loading from the usual ports of Rotterdam and Fawley last week before sailing for Durban.

Nigerian elections have caused delays and confusion to trading in that country and have been a major stumbling block to transacting business in Nigeria.

The Lukoil cargo of 10,000 tons from Svetly appears to have been abandoned, while a major has again put together a European cargo for receivers in Nigeria. This parcel is being sold into representatives of ExxonMobil, but it is not clear how any avoidance of the issuance of a letter of credit and the granting of an export license has come about.

Another large cargo of up to 20,000 tons was offered into Nigeria and perhaps Luanda. The cargo will discharge either in Apapa or Onne port in Nigeria and may two-port discharge with a quantity into Luanda in Angola.

Prices contained in offers for both Russian Baltic supplies and also material sourced from the Mediterranean may be around $1,075/t for SN 150, SN 500 is estimated at around $1,125/t and SN 900 is priced at around $1,165/t.

CFR levels for base oils discharging in Apapa are given as indications only, and are given purely on the basis of interest, since no trades are being finalized at this time. Prices refer to previous cargoes that arrived into Apapa. Prices from the European major are understood to be substantially higher than Russian numbers but are more in line with material offered from the U.S. Gulf Coast.

Levels are assessed at $1,000/t-$1,065/t for SN 150, SN 500 at around $1,050/t-$1,100/t, and SN 900 at $1,125/t-$1,145/t. Bright stock is assessed at around $1,255/t CFR Apapa. Bright stock may form part of the cargo from Rotterdam and Fawley.

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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