EMEA Base Oil Price Report


At long last, a degree of normality returned to base oil markets as workers returned to their desks following winter holidays. Lubricant blending operations have restarted, but base oil demand remains constrained, with many players stating that they will only replenish inventories when necessary.

Availabilities of all groups of base oils are currently good, even though incentive remains for refiners to shift production from base oils to fuels. The diesel premium to base oils has steadied during the recent resurgence in crude values. Crude prices did drop last week, due – many sources concluded – to lack of demand interest immediately following the New Year. Prices are rebounding now, and diesel prices are following, maintaining the motivation for refiners to focus on distillated output.

Some sources are predicting an increase in lubricant and base oil demand during the first quarter, but the outlook is still murky for a number of factors that could affect the situation. China may open up again by relaxing restrictions guarding against the spread of COVID-19, and if the war in Ukraine ends it could boost economies around the world.

Regarding the war, the European Union and allied nations will implement a total ban on Russian hydrocarbon imports on Feb. 5. The ban applies to fuels, vacuum gas oil and base oils and will further narrow the market for Russian base oil exports to regions such as Turkey, the Middle East Gulf and India.

Base oil prices remain soft, particularly for API Group I and Group II, and although Group III avails have been snug up until now, a large influx of material from Middle East Gulf sources has bolstered availabilities of the latter category. This relief may only be short term, though, if further supplies are not forthcoming in similar quantities.

As noted, crude prices dipped during last week, ending a bull run when prices escalated to recent highs. Dated deliveries of Brent crude fell to around $77 per barrel, but have since climbed back above $80 to post at $80.45, still for March front month settlement. West Texas Intermediate crude rallied to $75.80/bbl, still for February front month, maintaining the crack at around $5.

Low-sulfur gas oil prices are steady and still around pre-Christmas levels. This petroleum product marker posts at $890 per metric ton, still for January front month. Although every effort has been made to eliminate EU dependence on Russian diesel imports, it will be interesting to see if the February ban affects availability – and hence prices.

All of these prices were obtained from London ICE trading late Jan. 9.


Last week saw few deals being reached for European exports of Group I base oils. Most parties were still missing from offices last week, and it is expected that this week may bring some action back to export markets in locations such as West Africa and India, although European Group I supplies may face stiff competition from Russian exports.

Following a couple large export cargoes that were negotiated and loaded before the end of December, there may be further scope for offers into regions such as Nigeria, where the banking system appears to making some progress towards a functioning operation.

Year-end cargoes were though to be priced exceptionally keenly as sellers sought to complete sales before 2022 closed. These prices may still be around, since it would be difficult for sellers to hike numbers back to former levels.

With no new business done last week, prices are maintained here, with the proviso that this week may bring updates about offers pitched for the second half January and February loadings. Any changes to the current ranges will be reported next week.

Therefore solvent neutral 150 is priced between $855/t and $950/t, SN500 at $889/t-$1,000/t and bright stock at $1,030/t-$1,085/t, all on an FOB basis. The difference between numbers for SN500 and bright stock is very narrow, and in one case, a quantity of bright stock, was sold below the high end of the SN500 range. This is not reflected in the current bright stock spread, since it would appear to be a one-off price.

Group I trade within Europe only really restarted this week, and it will take a few days to evaluate where prices have gravitated over the holiday period. It is suspected that they fell substantially from December numbers. but exactly where the market stands will only become apparent during the next few days.

For now, prices for SN150 remain at €1,055/t-€1,100/t, SN500 at €1,175/t-€1,225/t and bright stock, where available, at around €1,385/t.

The euro has gained a little on a weaker dollar in early trading this week, and posts at around $1.07472. The differential between domestic and export prices is taken lower to €135/t-€275/t, export prices being lower.

Group II prices in Europe appear stable following adjustments made during December as the altered levels rolled over for early January sales. As with the Group I segment, this week will bring news of any changes.

Prices for Group II oils are maintained at at $1,265/t-$1,407/t (€1,200/t-€1,335/t) for 100 neutral, 150N and 220N, while 600N is at $1,410/t-$1,460/t (€1,335/t-€1,385/t). These values apply to an extensive range of Group II oils from Europe, the United States, Asia-Pacific and the Middle East Gulf.

European Group III markets remain relatively snug, but large replenishment cargoes from the Middle East Gulf are on the way and may provide some respite. Many sources contacted this week suggested that demand for this category is still strong and may remain so for the next couple months. Finished lubricant demand was in a downturn through the last quarter of 2022, but demand for automotive lubes is described as rising now, and with it demand for Group III.

Prices for Group III oils with partial slates of finished product approvals are unchanged at €1,700/t-€1,735/t for 4 and 6 centiStoke and at €1,675/t-€1,725/t for 8 cSt, all on an FCA basis ex Antwerp-Rotterdam-Amsterdam and Northwestern Europe.

Values for Group III oils with full slates of approvals or with none are also unchanged at €1,755/t-€1,800/t for 4 cSt and at €1,770/t-€1,820/t for 6 and 8 cSt, also on an FCA basis ex hubs in Antwerp-Rotterdam-Amsterdam and Northwestern Europe.

Baltic and Black Seas

Baltic reports contain little news regarding any bulk movements out of the ports of Riga, Liepaja and Svetly in Kaliningrad. However, Russian exports are making their way across the border into Lithuania where a company with a blending plant in Klaipeda is producing finished lubricants and exporting these products to the United Kingdom. The grades of lubes presumably carry a Lithuanian or EU cert of origin, which would allow these grades to be imported and resold in EU or U.K. markets.

The ruling on how Russian export grades of base oil – unless under existing contract, which will finish on Feb. 5 anyway – can be used in an EU country to produce finished lubes, which can then be exported and sold into EU and UK markets legitimately, is controversial, to say the least. A U.K. blender has taken up this case with the United Kingdom Lubricants Association, but government responses appear to be extremely slow in either commenting or clarifying the import situation.

It is not yet clear if the cargoes from Aabenraa in Denmark are connected to Russian exports, and also information is being sought to ascertain if vessels have been fixed to take the two cargoes to Turkey and to the United Arab Emirates or the west coast of India. The use of storage in Aabenraa is a new move, with no base oils ever having been reported moving through this port. Again, the rules for bridging Russian exports through EU ports require clarification, albeit that the material is not destined for any EU or other allied port that will form part of the import ban coming into effect on Feb. 5.

Russian exports to all EU countries will formally halt in early February, although reports suggest that few, if any, cargoes of Russian base oils have been landed in EU or U.K. ports in the last month. There was a small cargo of around 3,000 tons that moved from the Baltic to the east coast of the U.K. in November, but this appears to be the last reported movement.

New export destinations for Russian material such as the U.A.E., India and South and Central America have only been partly successful, with refineries within the Russian Federation possibly facing cut backs to runs producing base oils. Turkey was one key outlet for Russian base stocks, loading out of both the Baltic and the Black Sea. The logistics and costs of transporting base oils from the Baltic to India and the Middle East Gulf are only one of the main problems attached to the development of this business.

Suitable shipping to load out of Russian ports is also a major problem, with European owners and operators unable and unwilling to offer vessels to Russian charterers. Insurances and vessel cover are not granted under EU statute for any Russian cargoes.

FOB prices from Svetly for SN 150, purely as indications only are assessed at $800/t-$835/t, with SN 500 at $810/t-$845/t.

Lotos in Gdansk may have availabilities later in January after a pause, having sold out on avails prior to year end.

FOB prices from Gdansk are aligned with European mainstream levels. As an indication only, SN 150 is placed at $865/t-$925/t, with SN 500 in a wide range at $885/t-$1,000/t depending on destination. Bright stock remains assessed at $1,035/t-$1,100/t. Buyers were encouraged to take a combination of all three grades, rather than cherry picking SN 500 for example.

The Turkish market has seen some massive changes through 2022 with this market becoming almost reliant on Russian imports coming out of the Baltic and from Volgograd in the south. Turkey imported around 280,000 tons of base oils last year, but with the downtime at Izmir refinery, Tupras was around 40% down in availabilities for the local domestic Turkish market. The majority of the imported material was Russian origin. With Italian and Greek sellers much more expensive than Russian export barrels, these supply sources lost out. Livorno of course was down for around six months without any availabilities. The Greeks turned their attention to export markets in Nigeria, or sold material into Antwerp-Rotterdam-Amsterdam, replacing Baltic supplies from Russian refineries.

Greeks offered a cargo of 5,300 tons of base oils to receivers in Derince, which is thought to have been accepted. That’s because some of the blending operations require higher specification Group I base oils for particular finished lubricants. The average difference in pricing between Mediterranean-sourced material and Russian barrels was noted at up to $600/t. Russian prices almost appear to be secondary to getting the business done and moving material out of refineries.  

Prices for the Greek offer were keen, with CIF offers for Greek barrels heard to be around $925/t-$945/t for quantities of SN 150, with SN 500 and 600 at around $955/t-$980/t. These prices were “special” numbers for clearing inventory prior to Dec 31.

The local Turkish refinery at Izmir offers limited quantities of Group I base oils from Tupras with prices last reported at $889/t for SN 150, $1,035/t for SN 500, with bright stock at $1,250/t. Prices are for truck loads ex refinery purchased in Turkish lira. These prices may have changed during the last week because sources were unavailable to comment.

Group II prices ex-tank for material from a variety of sources imported into Turkey remain unchanged this week. They are assessed at €1,485/t-€1,565/t for the three lower vis products, with 600N at €1,590/t-€1,640/t. Supplies of Group II grades can arrive from Red Sea, the United States (via Antwerp) and South Korea.

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

Middle East

Red Sea news has a number of large cargoes loading out of Yanbu and Jeddah, with Group I and Group II parcels on both stand-alone and in combination on a number of vessels. These January cargoes are destined for the west coast of India, Pakistan, the United Arab Emirates and Singapore. Another 3,000 tons of bright stock will load out of Yanbu for Egyptian General Petroleum Corp. in Alexandria, with this trade apparently starting up again on a regular basis. There still appears to be no EGPC tender, however. The assumption is that this business is either a spot supply or some form of contracted arrangement between Luberef and EGPC.

Middle East Gulf receivers are looking at various options to take cargoes of Group I base stocks. Europe and the United States are options on the list, in addition to Baltic and Black Sea sources for Russian barrels. Problems seem to be the high freight rates associated with moving cargoes from those distant sources. Buyers in the U.A.E. are looking to take material from India, an interesting reversal of usual trade routes. Iranian material, which is bridged into Hamriyah in small lots and then accumulated into cargo sized parcels in storage, normally moves from Hamriyah into either Hazira, Mumbai port, or Mumbai anchorage

The ExxonMobil cargo of 10,700 tons loading out of Rotterdam and Fawley will load either later this week or early next. The vessel chartered will call at Yanbu, then Fujairah, and finally Jebel Ali.

Large quantities of Group III base oils continue to load out of Sitra and Al Ruwais in the Middle East Gulf. Cargoes are primed to move to Mumbai anchorage, China and the U.S. Cargoes are in addition to the parcels already loaded and on the high seas for northwest Europe, the U.A.E. and China during January and early February.

Another large parcel of around 30,000 tons of Group III+ base oils will load from Ras Laffan in Qatar. The destination of this quantity is not yet known, but it is considered that the quantity will possibly go to the Far East.

Netbacks for partly-approved and non-approved Group III base oils loaded out of Al Ruwais and Sitra are not changed, with selling prices in local markets still reported at constant levels. Netback returns 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 in areas – for example, Europe, India, the U.S. and China – thereafter, netback levels are derived from regional selling prices, less marketing, handling and estimated freight costs.

Group II base oils selling on a FCA basis in the U.A.E. are sourced out of European, U.S, Asia-Pacific and Red Sea producers and are resold ex-tank, or on a truck-delivered basis within the U.A.E. Prices remain unchanged this week, with levels established at $1,540/t-$1,575/t for the 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 sources merely confirm the large cargoes of base oils from Rotterdam and Fawley. The latest cargo will load at the end of January. The chartered vessel will also call at Tema port in Ghana with 5,000 tons of SN 150, SN 500 and bright stock. The vessel will then sail to Durban with the remaining 20,000-ton cargo.

West African news is that a cargo was confirmed loading out of Aghio in Greece with around 10,000 tons of Group I grades. The prices were heard to be exceptionally attractive to traders involved in this business, leaving options open for competing against low numbers which were attached to the 12,000-ton Baltic cargo. The Livorno cargo sailed, and the 11,000-ton parcel of three Group I base oils will deliver into Apapa around the end of January or perhaps early February, depending on weather and safe passage.

It would appear that with three large cargoes now moving towards Lagos, the banking problems may have been sorted out. Sources suggested that this may only be a temporary respite, with foreign currency remaining a problem in Nigeria.  Because the amounts involved for base oil cargoes are relatively smaller than those for motor gasoline, AGO and jet kerosene, it is simpler to find amounts of approximately $20 million per cargo.

The Baltic cargo has arrived at Apapa and may have completed discharging. The news that the vessel may have encountered some problems still remains a mystery and local sources may be able to cast some light on proceedings later this week.

CFR levels for base oils discharging in Apapa are amended a little to reflect the latest FOB numbers. Numbers are given as indications only.

Levels are as follows, with freight costs contributing to a substantial part of CFR delivered prices. Prices are estimated at around $1,025/t for SN 150, SN 500 at around $1,075/t, and SN 900 at $1,140/t. Also, as an indication, bright stock from Livorno is assessed at around $1,235/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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