EMEA Base Oil Price Report


Following the Easter and Passover holidays, and with Ramadan coming toward an end, base oil markets are returning to normal and – it appears – finally seeing an increase in demand.

The uptick seems seasonal – tying back to a cyclical rise in demand for automotive engine oils – but it arrives late this year. With Russia’s invasion of Ukraine still hanging like a cloud over major European economies, it may be some years before markets return to a pre-COVID scenario.

The reasons behind these events are complex and are interrelated, but the bottom line is that economic growth in the region remains stunted, although firmer than forecasted. There could be an economic turning point in the not-too-distant future, given that interest rates have possibly peaked and that inflation is showing signs of starting to come down. These factors alone could stimulate economic activity across the regions.

Nevertheless, interest rates are still high, and finished lubricant blenders are reticent to spend large outlays replacing inventories, which have been run down to very low levels. Availability of all types of base oils is being expressed as “more than sufficient,” tempting buyers to continue purchasing on an as-needed basis, rather than rebuilding stocks.

This process continues even against a backdrop of firmer crude and feedstock prices, which eventually could start to exert upward pressure on base oil values.

The habit of buying small and often will, however, have the effect of smoothing out demand over the next few months, rather than having a surge followed by a lull, during which producers could be faced with rising stock levels and containment problems. The changing pattern of purchasing base oils has called on refiners to adapt production schedules to accommodate lower demand cycles.

European refinery maintenance season is upon us. A couple of temporary shutdowns have already been completed, but a number of major works are due to start this month or next. The fact that there are not currently surpluses of supply, combined with a ban of Russian export to the European Union and allied markets, could lead to more snug supply. Group II markets in Europe may see lower quantities coming in from the United States due partly to complete removal of a duty waiver, which would impose a 3.7% tax on all  Group II base oil imports from the U.S.. A reduction in imports could balance Group II supply around Europe, alleviating any chance of a surplus.

API Group III supplies could be affected by a maintenance program that, will kick in at the major supply source in Cartagena, Spain, although SK Enmove, co-owner of the joint venture facility, is reportedly stocking up to prevent a shortfall. Sources in the Middle East Gulf, Malaysia and Asia-Pacific are not reporting any significant routine interruptions to availabilities, hence trade as normal should continue to flow from those regions.

Crude oil prices treaded water the past week, and markets are now returning to a post-holiday norm. The only interesting development was that the spread between Brent and West Texas Intermediate crudes narrowed to around $3 per barrel – the smallest differential seen for some time.

Dated deliveries of Brent hit $85.30/bbl, for June front month settlement, WTI rose to $82/bbl, still for May front month. Low-sulfur gas oil prices slid around $10 per metric ton to $765/t, now for May front month. These prices were obtained from London ICE trading late April 17.


Trading of Group I exports from Europe remains steady, and there seems to be upward pressure from higher crude values. Russian operations out of the Baltic Sea continue to be dogged by logistical problems, and with fewer and fewer destinations becoming available to sellers, this market is in danger of implosion. Refineries presumably are still producing material for export, but finding markets for large quantities of Russian export barrels is becoming harder and harder.

Turkey is taking additional material from European sources, mainly in the Mediterranean, which is further limiting the ability of Russian suppliers to dump material into this market. Prices for Mediterranean base stocks have become more competitive, whilst Lukoil was forced to impose price hikes on material from the Baltic and Black seas. There have been suggestions that Russian sellers will have to revert to lower prices to hold open markets such as Turkey. 

Other large base oil movements are mostly internal transfers by large oil companies, moving material from Northwestern Europe to Mediterranean hubs and also to South Africa for one major.

Prices for Group I exports from Europe are tweaked upwards by around $30/t for the light neutrals and bright stock and by $20/t for heavier neutrals. Solvent neutral 150 is now assessed between $950/t and $985/t, while SN500/600 is at $1,045/t-$1,095/t, both on an FOB basis. There was one bright stock offer last week containing prices of $1,270/t-$1,300/t.

There are signs that Group I trade within Europe is starting to pick up, with some blenders saying they want to build protection inventories now that the stockpile of Russian base oils built up before the EU’s Feb. 5 ban have been depleted. Some blenders are also preparing in case maintenance turnarounds do end up interrupting supply.

Prices for Group I sales within the region are unchanged at €1,000/t-€1,050/t for SN150, €1,145/t-€1,175/t for SN500 and around €1,295/t for bright stock. The euro’s exchange rate against the U.S. dollar rose slightly the past week to $1.09248. The price differential between Group I exports and trade within the region narrowed to €90/t-€185/t, exports being lower.

European demand for Group II oils appears to be good, and local suppliers could get a boost if imports from the U.S. decrease. There are rumors and suppositions that this will happen, but one major U.S. supplier appears committed to the European market and to protecting its market share. 

Group II values are unchanged at €1,050/t-€1,150/t for 100 neutral, 150N and 220N and €1,250/t-€1,320/t for 600N. These prices apply to a broad range of Group II oils from Europe, the U.S., Asia-Pacific and Red Sea sources, imported either in bulk or in flexi-tanks.

The European Group III market is expecting a number of cargoes arriving from the Middle East Gulf and Malaysia, in addition to the local production in Cartagena that appears to be running flat out at the moment prior to a scheduled shutdown beginning later this month.

Large trans-shipments from Cartagena are still moving into Rotterdam. providing customers with cover for requirements during the turnaround at the Spanish plant. With supply options from South Korea and Indonesia, SK will have worked out a plan to cover Europe and other markets – such as India and the U.S. – during the shutdown.

Some minor adjustments are made here to prices for Group III oils with partial slates of finished lubricant approvals – partly for incentives offered for buyers willing to stock up, partly to account for a couple South Korean companies offering lower prices than established suppliers. Product from one of those companies meets lower specifications, and the discounts may reflect this.

Prices are now assessed at €1,700/t-€1,850/t for 4 and 6 centiStoke grades at at €1,765/t-€1,785/t for 8 cSt, which is in low demand in Europe. All of those prices are on an FCA basis ex Antwerp-Rotterdam-Amsterdam or Northwestern Europe.

Group III oils with full slates of approvals from Cartagena are priced at €2,020/t-€2,050/t for 4 and 6 cSt and at €1,895/t-€1,945/t for 8 cSt, again on an FCA basis ex Antwerp-Rotterdam-Amsterdam, Northwestern Europe and Spain.

Baltic and Black Seas

Other than outgoing cargoes from Gdansk and a number of smaller cargoes from European sources going into the Baltic ports for blending operations in Estonia, Latvia and Lithuania, trades are almost non-existent, with only a few shipping inquiries for ongoing potential cargoes to come out of Sverly terminal in Kaliningrad for Lukoil.

The options for Russian exports from the Baltic are running low, with almost every possible market either turning down offers – for whatever reasons – or becoming unavailable for Russian products. Turkey remains an option for these supplies, but prices have to be exceptionally low on both FOB and CIF basis, since the freight rates will be high for cargo movements from Baltic to Turkey.

An offer remains for material to move from Svetly to Hamriyah in the U.A.E., but buyers are concerned regarding the voyage time and also the suitability for acceptance of any vessel that is nominated to perform the voyage. Russian charterers are limited in vessel choice with many of the cargoes coming out of Kaliningrad loaded on Turkish flagged vessels, which may be beneficial in two aspects. These vessels are probably keen to re-position to a Turkish port, which means a lower freight rate, and also, they are not part of the European Union ban on vessels, finance and insurance.

An alternative offer for 5,000 tons of Russian export barrels to load out of Limas terminal in Turkey has a chance of succeeding, going into Hamriyah for the same seller. From sources in the U.A.E., it is believed that final negotiations may be underway to secure this parcel. Indian buyers are reticent to take delivery of Russian cargoes of base oil due to lower specification and therefore higher additive treat costs. With plenty of local production established from the import of cheap Russian crude oil, refiners in India are able to produce higher quality base oils at competitive prices.

FOB prices from Svetly are nominal at best and are estimated on the basis of imported material which has gone into Turkey in the past. Numbers are exceptionally difficult to define but at a guess SN 150 levels may be indicated at $775/t-$810/t, with SN 500 at $795/t-$845/t. Each offer for CIF prices can be heavily discounted, which means the nominal FOB levels will depend on destination and receivers. In addition, terms of payment can vary from pre-payment to letters of credit with 120 days credit.

FOB prices for Group I material from Gdansk refinery are aligned with European mainstream pricing and are thereby raised this week. SN 150 is assessed at $960/t-$995/t. SN 500 is at $1,060/t-$1,095/t, depending on destination. Limited quantities of bright stock are estimated to be priced at $1,280/t-$1,320/t.

Black Sea and East Mediterranean regions news is that fewer imports of Russian material are entering the Turkish market, with Turkish blenders opting to take cargoes from European sources such as Livorno, Aghio and Augusta in Sicily.

Imports from Livorno and Aghio have revised CIF delivered prices offered at $995/t for quantities of SN 150, with SN 500 and 600 at $1,085/t. Bright stock may be included from Livorno at a price level around $1,325/t CIF Gebze or Derince. These prices are revised downwards to maintain a competitive edge against Russian material which is being offered at lower levels. The quality angle means that overall, when finished lubricants are produced, the Mediterranean imports are more economical, or at least on a par with the Russian blends.

It is not known if Tupras has availabilities from Izmir refinery. The latest prices with dollar equivalents remain at $915/t for spindle, $1,060/t for SN 500, with bright stock at $1,270/t. Prices are based on ex-rack truck sales.

Group II ex-tank prices remain unchanged, although while awaiting news this week, the market may see some upward moves. Levels are assessed at €1,135/t-€1,200/t for the three lower vis products – 100N, 150N and 220N – with 600N at €1,325/t-€1,420/t. Supplies of Group II grades can be sourced from the Red Sea, the U.S., South Korea and Rotterdam or hub storage in Valencia.

Partly-approved Group III base oils sold by appointed distributors on an FCA basis or on a road tank wagon-delivered basis, are also maintained and are assessed at €1,865/t-€1,900/t. Fully-approved Group III grades delivered into Gemlik from SK in Cartagena are priced at around €2,250/t-€2,300/t FCA.

Middle East

Red Sea shipping reports show a number of large cargoes assembled to move base oils from Yanbu and Jeddah to the west coast of India, Pakistan, the United Arab Emirates and Singapore. Completed cargoes have taken material from the two Red Sea ports to Durban and also three ports in the U.A.E. The expansion at Yanbu refinery will lift production of both Group I and Group II base stocks. A decision on whether to close the base oil unit at Jeddah refinery is still awaited, with production at Jeddah refinery limited to Group I base oils, SN 150 and SN 500.

Import cargoes coming into the Middle East Gulf are formed of further Group I base oil parcels sourced out of Rayong in Thailand. These will discharge relatively small quantities, from 2,000 to 4,000 tons, into Ras al Khaimah and Hamriyah in the U.A.E. Another Iranian sourced rubber process oil cargo will load out of Ras Al Khaimah and will be exported to regular receivers in South Korea. The limitations on quantity appear to be the ability to obtain sufficient quantities of rubber process oil from Iran to make up each 3,000-ton cargo.

The other offers for Group I base oils to be imported into the U.A.E. are proposals from Lukoil for one cargo of 7,500 tons to load out of Svetly in the Baltic for receivers in Hamriyah. This cargo is reported as not acceptable to receivers from the standpoint of both voyage timing and also vessel suitability. However, another offer to deliver a smaller parcel from Limas terminal in Turkey may gain acceptance, depending on final pricing. The cargo will be made up of SN 150 and SN 500 base oils.

With options for Russian cargo destinations shrinking all the time, it is imperative that in addition to the Turkish market, locations such as the U.A.E. and also Singapore are kept open for Russian exports. The U.A.E. is twinned with offers into Indian ports using the same vessel, but Indian receivers have declined a number of offers for Russian material. The irony is that India is awash with higher standard base stocks, produced using discounted supplies of Russian crude that are imported into India on a large-scale basis at prices around $40 per barrel. An example of this trade is a cargo of 5,000 tons of Group I base oils shipped from Chennai to Hamriyah.

Group III base oil export cargoes from the Middle East Gulf are noted, with the two previously identified cargoes from Sitra in Bahrain moving to the United States and Antwerp-Rotterdam-Amsterdam. A 7,650-ton cargo will load for receivers in Houston, while the other cargo will be 8,100 tons of mainly 4 centiStoke and 6 cSt Group III base oils under Stasco, which will discharge in Rotterdam. This parcel will be loading at the end of April.

Adnoc have loaded a cargo of around 9,800 tons for receivers in Mumbai anchorage. Further cargoes will load during April and May for receivers in Nantong in mainland China, while a follow-up cargo for ARA is planned for distributors Chemlube in Dordrecht.

Netbacks for partly-approved and non-approved Group III base oils loaded out of Al Ruwais and Sitra are taken slightly lower, with selling prices in the regions reported to have been discounted by small adjustments. Netback returns are assessed at $1,725/t-$1,775/t, for the range of 4 cSt, 6 cSt and 8 cSt partly-approved and non-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 sold on an FCA basis in the U.A.E. may be sourced from European, U.S, Asia-Pacific and Red Sea producers. These grades are made available ex-tank U.A.E., and on a truck-delivered basis within the U.A.E. and Oman. Prices are unchanged this week, with levels at $1,420/t-$1,465/t for the light vis grades, with 600N at $1,495/t-$1,535/t. The high ends of the ranges refer to road tank wagon-delivered base oils.


Another large cargo of Group I, Group II and Group III base oils will load in May for receivers in Durban. South African sources reported this further cargo loading out of Rotterdam and Fawley, discharging in Durban. Part of the cargo may yet be destined for Dar-es-Salaam, although this could not be confirmed early this week. The cargo size is estimated to be around 19,000 tons of mixed grades.

In West Africa Nigeria takes central stage, although other cargoes are worked for receivers in Guinea and Cote d’Ivoire. Additionally, another cargo will be sent to Tema under the Ghana tender arrangement, and it may be possible that these three locations could be incorporated on one vessel which would deliver to Conakry, Abidjan and Tema in rotation. The total cargo could be up to around 11,000 tons of Group I grades.

The cargo identified last week loaded out of Livorno earlier in April and should arrive in Apapa with an ETA given as May 5, AGW. The 12,000-ton parcel of three Group I grades is reputed to be comprised of SN 150, SN 500 and SN 900 – the latter grade blended with bright stock and SN 500, either prior to loading, or more likely combining the two grades when loading took place. In-tank blending of similar base oils is not uncommon, and while not ideal, can save expense by not utilizing shore storage tanks to house relatively small quantities of a blended grade.

The U.S. Gulf Coast cargo may have loaded with a large quantity of Group I base oils on board. The cargo may have to discharge in Onne port, due to draft restrictions in Apapa port.

CFR prices for European material sourced from the Mediterranean were dismissed as impractical and impossible to achieve. These fantasy price levels were heard at $910/t for SN 150, SN 500 at around $990/t, with SN 900 priced at around $1,050/t. FOB levels from European suppliers cannot substantiate nor produce delivered numbers such as these.

Confirmed levels for current cargoes loading imminently have CFR levels at $1,010/t-$1,020/t for SN 150, SN 500 at $1,050/t-$1,060/t, and SN 900 at $1,130/t-$1,145/t. Bright stock, if loaded separately, is estimated at around $1,320/t CFR Apapa. This grade could potentially be on cargoes from Rotterdam and Fawley, and Livorno, unless the blend with SN 500 was completed at loading, to produce a quantity of SN 900.

Future offers for cargoes further down the line, arriving perhaps during June, will have higher prices due to FOB levels being tweaked higher. This will particularly be the case for SN 900, which will require quantities of higher priced bright stock for blending. CFR prices are assessed to be SN 150 at around $1,025/t-$1,040/t, with SN 500 at $1,075/t-$1,095/t and SN 900 at $1,155/t-$1,175/t.

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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