EMEA Base Oil Price Report


Base oil markets throughout Europe, the Middle East and Africa seem to have hit a flat spot where little new business or trades are taking place. Business carries on as before, but a lack of new ventures is stymieing opportunities for traders and blenders to innovate or find additional activities to break out of the mold.

The majority of players are accepting this scenario, satisfied to have survived the COVID-19 pandemic and now feeling in a precarious position in light of galloping inflation rates and resulting high borrowing costs.

Demand remains lacking on the finished lubricant front, and consequently in base oil markets. This may be just as well given constraints on supply of some grades, such as API Group I in the midst of maintenance turnarounds by multiple European refiners.

Regional markets across Europe, the Middle East and Africa area are being covered one way or another, but uncertainty reigns thanks to the ongoing war in Ukraine, and uncertainty undermines the confidence needed for capital investments. It is difficult to see, therefore, how base oil markets could climb out of this malaise this year.

The Group II scene is relatively healthy as demand is steady, but producers and sellers would prefer to see an expanding market moving to the future. Instead, forecasts for a pick-up during the second quarter have not materialized.

In the Group III segment, supply and demand seemed balaned until about two months ago, when demand started to falter. An increase of cargoes arriving from the Middle East Gulf and Asia-Pacific has therefore created a surplus that is bringing down prices. Some call it an overdue correction to Group III values, adding that it is returning spreads between Group II and III prices to reasonable levels.

Perhaps the base oil scene is mirroring crude oil, where prices have steadied and are relatively stable given all the external events and circumstances currently happening. Crude levels are around the same prices as last week, which were similar to those of a week previously.

Discounted barrels of Russian Urals crude are still predominant in markets such as India and China, curbing demand for higher priced alternatives from other major producers.

Dated deliveries of Brent crude are at $76.25 per barrel, for July front month settlement, while West Texas Intermediate is at $72.20/bbl, also July front month. Both benchmarks have changed merely cents since last week, so the crack between them remains around $4.

Low-sulfur gas oil dipped $1 dollar since last week to $683 per metric ton, for June front month. All of these prices were obtained from London ICE trading late May 29.


The market for Group I exports from Europe is still non-existent as zero true export cargoes identified. Several Group I refineries in the region are either in scheduled turnarounds or are having production problems limiting supplies for export.

Most suppliers are content to sell their output within the region, where prices and margins are better than what would be required to attract export business. Some oil majors are shipping cargoes to destinations such as East Africa and South Africa, but the receivers are affiliate companies. Traders who would normally receive true export shipments are turning to alternative sources.

In the spirit of maintaining the format of this report, prices for European Group I exports are maintained at between $1,020/t and $1,055/t for solvent neutral 150, $1,085/t-$1,140/t for SN500 and SN600 and $1,295/t-$1,345/t for bright stock.

Group I sales within the region have remained stable the second half of May, and sellers are trying to roll over May prices into June. The market has little appetite for markups, and producers appear content to maintain current levels.

Barrels of Group I continue to come into Europe from areas such as the United States, and the Red Sea, indicating that suppliers have identified a supply gap after the European Union banned Russian imports.

Prices for this intra-regional trade are unchanged at €1,050/t-€1,080/t for SN150, €1,155/t-€1,185/t for SN500 and around €1,390/t for bright stock. The euro’s exchange rate against the U.S. dollar dipped the past week to $1.07095, but the price differential between Group I exports and sales within Europe is unchanged at €125/t-€185/t, exports being lower.

The European Group II market is almost balanced – with any new availabilities likely to send supply long and any drop in demand to exert downward pressure on prices. Lower-viscosity Group II grades such as 100 neutral and 150N have been readily accepted by the European market as able to compete with SN100 and SN150. Prices between the groups are close enough and the performance characteristics of Group II good enough that Group II oils have become quite popular.

Group II 600N carries a bigger premium over SN500 and SN600, and some blenders that use heavier stocks have been reticent to fork out up to €200/t more for Group II. Additive treat costs for Group I formulations are rising, though, so it remains to be seen how far this market shifts to Group II.

In contrast, the Group III premium over Group II is still large and is causing some resistance to shifting toward the former group. This is causing some downward pressure on Group III values.

Group II prices are unchanges at €1,090/t-€1,175/t ($1,196/t-$1,289/t) for 100N, 150N and 220N and at €1,295/t-€1,360/t ($1,421/t-$1,492/t) for 600N. These prices apply to a wide range of Group II oils from Europe, the U.S., Asia-Pacific and Red Sea sources, imported in bulk, and in flexi-tanks.

Group III prices are coming under pressure from a number of sides. One is the large differential between Group II and Group III values, whilst another is the ingress into Europe of lower-priced material from Asia-Pacific sources – material that is diluting a market that had been balanced. Availability problems that existed some months back have now disappeared, and suppliers are encouraging buyers not only to take allocated quantities but even additional barrels.

The new ability for third parties to directly purchase Group III+ gas-to-liquids base oil could further alter the market. Prices for these grades are competitive when assessed against fully approved Group III grades.

Prices for Group III base oils with partial slates of finished lubricant approvals or without approvals are adjusted lower in light of discounts being offered by sellers. Prices for 4 and 6 centiStoke grades are in a wide range at €1,665/t-€1,775/t, while 8 cSt is at €1,695/t-€1,720/t, all on an FCA basis ex Antwerp-Rotterdam-Amsterdam or Northwestern Europe.

Group III oils with full slates of approvals, currently available from the refinery in Cartagena, Spain, also slipped the past week to €2,010/t-€2,045/t for 4 and 6 cSt, on an FCA basis from hubs in Antwerp-Rotterdam-Amsterdam, Northwestern Europe and Spain. Sales in Europe of fully approved 8 cSt are not sufficient for reliable price reporting, but small amounts are being sold to destinations such as Turkey and India for around €1,910/t, on an FOB basis.

Baltic and Black Seas

The Baltic base oil market has seen enormous changes since the Russian invasion into Ukraine was first announced, and then subsequently with the European Union and allied ban on all Russian hydrocarbon imports taking full effect from Feb. 5h earlier this year. The base oil export market from the Baltic Sea has been decimated, with only cargoes from Lukoil ex Svetly terminal in Kaliningrad showing as possible trades.

Occasionally, this same supplier will use storage in Riga or St Petersburg to try to move Russian Group I base oils from Perm refinery, but these movements are limited due to logistical and financial difficulties imposed by a ban by EU and allied banks, ship operators and insurance companies.

Finding suitable vessels to move cargoes has been very difficult and has limited the ability of the company to export base oils from this source. Many parcels were identified as available to load out of Svetly, but few have come to fruition, those completed being into Nigeria and Turkey.

Potential receivers are based in UAE and Singapore, along with some buyers based in Nigeria, but in the case of UAE, buyers are reticent to tie up funds for such a long voyage time, in addition to finding acceptable vessels to transport the cargo.

Imports are moving into the Baltic from European sources, with a further re-refined parcel will arrive into a Lithuanian port in early June. 

Sellers from Gdansk have indicated that they may have some avails during July, and with a number of buyers looking to take material from this source it has been disappointing that the refinery has not been producing base oils as normal.

Nominal FOB prices from Svetly are assessed by taking CIF prices Gebze, less estimated freight costs. Purely as an indication only, SN 150 levels are thought to be around $835/t-$875/t, with SN 500 somewhere at $855/t-$900/t. These numbers could be extrapolated in various different ways and may not be entirely accurate. These levels are for comparison purposes only.

FOB prices for Group I base stocks from Gdansk refinery in July will follow European mainstream pricing. Without material available until July, prices are “guesstimates” only, with SN 150 at $1,025/t-$1,070/t and SN 500 at $1,095/t-$1,140/t, ultimately depending on destination.  Bright stock, if available, may be at $1,300/t-$1,355/t.

Turkish base oil trade came a standstill during the elections and only now, after the present incumbent president has been re-elected with 52% of the country’s vote, will the Turkish markets start to get back to some form of normality.  How the current soaring inflation rate will be addressed is anyone’s guess, along with the ever-weakening Turkish lira.

Russian base oil imports continue to come into Turkey, with the import rate now increased as Turks get back to work and start producing finished lubricants again. The latest Baltic cargo may be arriving into Gebze on a prompt basis.

Offers from Greek sellers in Aghio have been missing from the news, and with any availabilities being distributed into the local Greek market, currently there is no product available to offer into Derince. Any future offers will be at higher levels, estimated to come in at around $1,095/t for SN 150, with SN 600 at around $1,155/t.

Group I base oils from Tupras from Izmir refinery remain priced as per the last report, with numbers in Turkish lira. Spindle oil is priced at Tl 20,725/t ($1,057/t), SN 150 Tl 17,269/t ($881/t), SN 500 Tl 19,999/t ($1,020/t), with bright stock at Tl 24,767/t ($1,263/t). Prices are for ex-rack truck sales.

Lukoil will supply another two cargoes from Limas terminal in Turkey, and these parcels will be consigned to receivers in the U.A.E. Two cargoes loaded for Singapore and acted as replacement quantities for a planned movement out of the Baltic. One parcel of 4,000 tons already sailed, with another cargo of 6,500 tons of Russian export barrels currently loading at Limas terminal. Space will now be available for further supplies to accommodate buyers in the U.A.E. Base oils will be sourced out of Volgograd refinery.

Group II ex-tank prices remain unchanged this week, with levels at €1,210/t-€1,245/t for the three lower vis products – 100N, 150N and 220N – and 600N at €1,390/t-€1,485/t. Supplies of Group II grades sourced from the Red Sea, USA, South Korea and Rotterdam or hub storage in Valencia.

Partly-approved Group III base oils sold by distributors on an FCA basis, or on a truck-delivered basis, are maintained and assessed at €1,825/t-€1,855/t FCA. Fully-approved Group III grades delivered into Gemlik from Cartagena refinery remain priced at €2,250/t-€2,300/t FCA, although the next small cargo to move into Turkey may be priced a little lower.

Middle East

In the Red Sea region there are still production problems at Yanbu refinery. The problem appears to one of feedstock quality, which is impacting the output of both Group I and Group II base oils. The problem was investigated and from information gathered from sources in the United Arab Emirates, production should be back up and running this week. Whether this will have a knock-on effect on availabilities for large cargoes going into the U.A.E. and the west coast of India is not known, but because considerable back-up stocks are held at Yanbu, inventory may cover requirements since the outage was only for a couple of weeks.

Cargoes from Yanbu and Jeddah were delayed in coming into U.A.E. ports Hamriyah, Ras al Khaimah and Jebel Ali. Other supplies loaded for Fujairah and Jebel Ali, suggesting that stocks of base oils in Yanbu managed to cover at least one large cargo of 17,000 tons in a combination of Group I and Group II base oils.

The ExxonMobil cargo from Augusta and Valencia to the U.A.E. should be arriving into Jebel Ali within the next week. The vessel called at Yanbu in route to the U.A.E., perhaps delivering a quantity of Group III base oils, although the normal supply route for Group III going into Saudi Arabia is from South Korea from the Saudi Aramco affiliated company S-Corp. Cargoes of 5,000 tons are the norm for this supply.

Middle East Gulf regional demand is mounting higher for premium grades of base oils, with Group II oils increasingly going into U.A.E. blending operations. Due to the influx of higher spec automobiles from the United States and Europe coming into the U.A.E., it was necessary for lubricant manufacturers in that region to move away from Group I blends to premium base oil blending.

Group II cargoes are arriving into the U.A.E., from the Red Sea, where a large proportion of the total imports are sourced. South Korea, the U.S. and Europe – all the major producers of Group II base oils are represented in the U.A.E., including, but not limited to Chevron, ExxonMobil, Luberef and SK. 

However, Group I base oils are still popular in many local blending operations in the Middle East Gulf, with material supplied from Rayong in Thailand and Singapore. European supplies of Group I are also included in the ExxonMobil cargo discharging in Jebel Ali. Further supplies of Group I base oils are coming out of Indian refineries in Haldia and Chennai, where imported cheap Russian crude allows extra quantities of Group I base oils to be produced. These quantities are surplus to local market requirements, so they are sold to receivers in the U.A.E.

The offer for a cargo of Group I base oils to be imported into the U.A.E. from Lukoil ex Baltic will not go ahead due to logistical and shipping problems. But supplies from Limas terminal were accepted on prices terms, and the details of the deal have yet to be made known. It is unclear whether there will be one parcel of around 10,000 tons or two cargoes making up the total quantity, since this will depend on available vessels which are acceptable and suitable to receivers and charterers alike.

Group III cargoes leaving from the Middle East Gulf have material loading out of Sitra in Bahrain and Al Ruwais in the U.A.E.

An Adnoc cargo will load from Al Ruwais for distributors in Nantong, China. The vessel will load around 7,600 tons of three Group III grades. The European replenishment cargo is believed to have loaded for Europe.  The parcel is made up of around 8,000 tons of three Group III grades. The 4 centiStoke and 6 cSt grades account for around 7,000 tons of the total cargo, with the remainder being the 8 cSt grade.

Netbacks for partly-approved loading out of Al Ruwais and non-approved Group III base oils loading from Sitra refinery are maintained. Netback returns are assessed at $1,700/t-$1,750/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, U.S., and China. Netback levels are then derived from regional selling prices, less marketing, margins, handling and estimated freight costs.

Group II base oils resold by distributors and traders on an FCA basis in the U.A.E. are routinely sourced from European, U.S., Asia-Pacific and Red Sea producers. Grades are sold ex-tank U.A.E., or sometimes on a truck-delivered basis within the U.A.E. and Oman.

Prices are maintained with levels at $1,520/t-$1,465/t for the light vis grades, with 600N at $,1570/t-$1,565/t. The high ends of the ranges refer to road tank wagon deliveries in the U.A.E. and Oman.


South African news is that the vessel taking the large base oil cargo of around 24,000 tons was fixed and will load out of Rotterdam and Fawley during the first half of June. The cargo will initially discharge in Durban. Thereafter, the vessel will sail to Mombasa, and the last port of call will be Dar-es-Salaam. On board will be quantities of Group I, Group II and Group III base stocks and also some easy chemicals.  The cargo split is not known.

Traders working the Nigerian market are concentrating on sourcing base oils from the U.S. Gulf Coast and U.S. Atlantic Coast producers that have availabilities of Group I base stocks.

With European suppliers not in any position to offer for large slugs of Group I base oils, the options to find availabilities are limited. Should Livorno refinery come fully back on-stream, there is a possibility that come July, there could be a quantity of 10,000 to 12,000 tons for supply to Apapa but doubt still remains at this juncture if that will be feasible.

Jeddah and Yanbu had been included as sources, but with problems at Yanbu only being sorted out presently, this would seem unlikely for prompt supply of a large cargo. Investigations into freight costs to make the voyage to Nigeria have shown that this supply source could be feasible if the FOB numbers were in the right bracket. Another unknown is whether Yanbu refinery would sell to traders on an FOB basis because it is unlikely that Luberef would attempt to sell directly to Nigerian receivers, not having experience in that particular market with its peculiarities and foibles.

Russian material from Kaliningrad is still offered out of Svetly terminal, but there would appear to be problems. The problems may have to do with payment terms and letters of credit, in addition to obtaining an import license for the cargo, which is only granted following the issuance of a local bank’s letter of credit.

A large U.S. Gulf Coast and U.S. Atlantic Coast cargo with possibly up to 17,000 to 20,000 tons of three Group I grades – SN 150, SN 500 and SN 900 – may be concluded this week for June loading.

Confirmed numbers for a recently arrived cargo have CFR levels at $1,020/t for SN 150, SN 500 at $1,070/t, and SN 900 at $1,150/t. Bright stock was possibly blended with SN 500 at loading or at source, to produce the SN 900 grade.

New offers for future cargoes arriving in June or July will have higher prices due to higher FOB levels. CFR prices are anticipated to be SN 150 at around $1,065/t-$1,095/t, SN 500 at $1,145/t-$1,185/t and SN 900 at $1,220/t-$1,245/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.

Archived base oil price reports can be found through this link: https://www.lubesngreases.com/category/base-stocks/other/base-oil-pricing-report/

Historic and current base oil pricing data are available for purchase in Excel format.

Related Topics

Base Oil Pricing Report    Base Stocks    Market Topics    Other