EMEA Base Oil Price Report


Lubricant supply chains in Europe, the Middle East and Africa underwent big changes during the first half of this year, and one of the biggest was the European Union’s ban on imports of base oils and other petroleum products from Russia – a ban that finally took effect Feb. 5.

Government data indicates that the reduction of that flow was 55,000 metric tons for the first six months of 2023, compared to the same period of 2022.

It might have been expected that such a large disruption would lead to Group I shortages during the first two quarters, but it didn’t materialize due to a combination of weak demand and imports from alternative sources such as the United States and the Red Sea.

Taking the other perspective, a number of Russian refineries completed maintenance turnarounds during the second quarter and are now seeking outlets where they can dump large quantities of base stocks. This could alleviate some of the possible pressure caused by a lack of Mediterranean supplies. Turkey is now heavily dependent on cheap Russian base oils, which are also finding ways to through Turkish conduits to markets such as Syria and Iraq.

Shortages could develop if demand revives – especially in the Mediterranean, where an Italian said recently that its temporarily halted operations may not restart until nearer the end of this year. There is speculation that the aged facility may never resume operations because of the cost of upgrades needed.

If Group I supply problems do develop in Europe, they could drive a further shift to Group II oils, a move which would be welcomed by suppliers of these grades. That would be welcomed by Group II producers, especially in light of recent economic data suggesting that manufacturing in the region is struggling.

A shrunken diesel premium to crude incentivizes refiners to make more of higher margin products such as base oils, which could lead to surpluses later this year.

The Group III segment in Europe has already turned long after being balanced earlier this year. Several cargoes that arrived in March and April oversaturated the market, and the trend looks likely to continue into May and June. The outlook is that Group III demand could be slightly dented by the downturn in manufacturing and the prospect of further hikes in interest rates.

The OPEC+ group of oil-producing nations said recently that members including Saudi Arabia and Russia may further cut oil output in an effort to bolster crude prices. So far the impact on crude prices has been minimal. Dated deliveries of Brent crude are at $76.70 per barrel, now for August front month settlement, while West Texas Intermediate is at $72.20/bbl, still for July front month. The crack between the two crudes remains around $4/bbl.

Low-sulfur gas oil values climbed around $15 per metric ton the past week to $698/t, still for June front month. All of these prices were obtained from London ICE trading late June 5.


The market for Group I exports from Europe remains purely notional with no demand and even less interest in traders obtaining cargoes for sales into traditional export destinations such as West Africa, the Middle East Gulf and India. All these locations are being covered by alternative supply sources, leaving the European scene bereft of activity and an export market.

There are no availabilities of large parcels around Europe, and as demand within the region falters, producers are just pleased to avoid build-ups in inventory. A few cargoes are moving to destinations such as South Africa and East Africa, but these are actually transfers between company affiliates.

In the spirit of maintaining this report, prices for Group I exports are assessed unchanged between $1,020/t and $1,055/t for solvent neutral 150, $1,085/t-$1,140/t for SN500 or SN600 and $1,295/t-$1,345/t for bright stock, all on an FOB basis.

Prices for Group I sales within the region dipped at the start of this month in the face of slowing demand and excellent availability of all grades. Sellers tried to roll over May prices into June, a number of buyers resisted and countered with lower numbers for the month.

Group I cargoes continue flowing to Europe from a number of areas, including the U.S. and the Red Sea, indicating that suppliers a void left by the ban on Russian imports. But Russian base oils are being used in markets such as the United Arab Emirates, and finished lubes containing them are being exported to the United Kingdom and perhaps EU countries bearing certificates stating their origin as the U.A.E.

There are a number of cases of this practice, which seems to have found a loophole in the ban adopted by the EU and allied nations. Domestic markets are being ruined by imports priced below even the manufacturing costs of domestic products.

Prices for Group I sales within Europe are at €1,020/t-€1,050/t for SN150, €1,125/t-€1,155/t for SN500 and around €1,355/t for bright stock.

The euro has given back recent gains in its exchange value against the U.S. dollar, falling to $1.07184 on June 5. A price differential between Group I exports and sales within the region is purely notional at this point but is pegged at €95/t-€145/t, exports being lower.

The Group II market in Europe appears to be slightly weaker as June gets underway – perhaps because of demand wavering just when sellers expected it to pick up.

Lower-viscosity grades such as 100 neutral and 150N are being accepted by the European market as able to substitute for Group I SN150. Prices for these Group II grades not too far away from Group I, around €960/t. In contrast, Group II 600N has a larger premium over Group I SN500 and is therefore not being taken up so fast. The result is an imbalance in the Group II supply portfolio.

The price premium between Group III and Group II is substantial, although it has eroded a bit recently.

Group II prices are tweaked lower this week to €960/t-€1,125/t ($1,030/t-$1,205/t) for 100N, 150N and 220N and remained at €1,295/t-€1,360/t ($1,421/t-$1,492/t) for 600N. Prices for 100N and 150N are typically a bit higher than for 220N. 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 continue to face pressure from lower priced imports touted by a couple South Korean suppliers. The large differential between Group II and III levels is also hurting Group III sales, with many lubricant producers saying they prefer to adjust Group II formulations with chemical additives rather than pay high prices for Group III.

Group III availability problems appear to be past, and suppliers are actively encouraging buyers to take all of contracted amounts – and more if they can.

There is evidence around the markets of third parties being able to directly purchase gas-to-liquids Group III+ base oil made at a large joint venture refinery in Qatar. For years this was not possible, as the marketing partner kept all output for its own use. The company denied that the situation has changed, but actual trades have been completed and evidenced. Prices are extremely competitive, and availability of these grades could change the Group III market.

Group III prices dipped for June as distributors offered discounts to customers taking more than monthly allotments. Availability is good for all grades. Prices for Group III oils with partial slates of finished lubricant approvals, or without approvals, is at €1,665/t-€1,765/t for 4 and 6 centiStoke and at €1,685/t-€1,725/t for 8 cSt, all on an FCA basis ex Antwerp-Rotterdam-Amsterdam or Northwestern Europe.

Prices for oils with full slates of approvals, now available only from the refinery in Cartagena, Spain, were unchanged at €2,010/t-€2,045/t for 4 and 6 cSt, on an FCA basis ex hubs in Antwerp-Rotterdam-Amsterdam, Northwestern Europe or Spain. European sales of fully approved 8 cSt are not sufficient to allow reliable price reporting, but small amounts being sold into areas such as Turkey and India at around €1,910/t on an FOB basis.

The maintenance shutdown at the Cartagena refinery has been extended by 10 days.

Baltic and Black Seas

Baltic base oil markets were decimated by the ban on EU and allied imports, with only Lukoil trying to move material out of Svetly terminal in Kaliningrad to deep-sea destinations such as Turkey, the United Arab Emirates and India. The problems for Russian trading companies may just be starting, since a number of base oil producing refineries recently completed maintenance schedules and will start producing greater quantities of base oils. There will be a concerted drive to find outlets for this material because existing outlets are at saturation point, with no further capacity to accept extra barrels.

New markets are being examined, such as South and Central America, but with limitations on grade type and specifications, Russian exports will have to be to attract buyers who otherwise can obtain higher spec base oils from U.S. and Indian refineries.

Nigeria remains on the list, but current problems in that country are making things many times more difficult to trade into that region.

Receivers in the U.A.E. and Singapore, and in the case of the U.A.E., Russian imports, are being taken into blenders’ operations and are being used to manufacture finished lubes, which then carry a certificate of origin from the U.A.E. The products are imported into EU and UK markets, and substandard, low priced lubricants are making life exceptionally difficult for traditional, established blenders in those markets. Even after importing base oil into the U.A.E. from Limas terminal or the Baltic, carrying out blending operations, and transporting the finished lubricants to the U.K. or EU, selling prices are lower than net manufacturing costs in the U.K.

Movements are taking place into the Baltic from European sources, with Group I, Group II and Group III base oils going into Lithuania and Latvia, and rerefined base stocks from Kalundborg also forming part of the new supply chain.

Sellers from Gdansk have again indicated that they may have avails during July but are currently sending base oils to Italy by truck, supplying Italian blenders who are unable to access any material from Livorno refinery because of the current outage.

FOB prices from Svetly are assessed using CIF prices Gebze, less freight costs. As an indication only, SN 150 levels are considered to be around $835/t-$875/t, with SN 500 at $855/t-$900/t. These numbers may not be entirely accurate but are given as a best “guesstimate.”

FOB prices for Group l base stocks from Gdansk refinery in July will be allied to European mainstream pricing, but currently SN 150 will lie at $1,020/t-$1,055/t and SN 500 at $1,085/t-$1,140/t, ultimately depending on destination.  Bright stock, if available, may be at $1,295/t-$1,345/t.

Turkish base oil business seems to be making a come-back, following the re-election of President Recep Tayyip Erdogan. However, there appears to be little change in attitude regarding inflation and interest rates, and the ever-declining valuation of the Turkish lira versus the dollar.

Russian imports continue and may even increase as Russian refineries open up again, following a period of maintenance, and traders look for outlets where they can dump large quantities of base oils.  Following the recent Baltic cargo that discharged in Gebze, there is another planned cargo for 10,000 tons to leave Svetly around June 15 for the same port. There were no signs of a vessel fixture for this parcel as yet, with Lukoil possibly waiting for a suitable Turkish-flagged ship to make this voyage.

Cargo quantities are flexible into Turkish receivers, since the quantity has to fit the vessel, not the other way around, which is the norm, given open choice in chartering a ship. Russian companies are barred from chartering EU or other allied tonnage to perform cargo deliveries.

Greek sellers from Aghio have not had availabilities to be able to offer to buyers in Turkey, which has been fortuitous because Turkish buyers have been out of the market for a few weeks now due to the elections. Any availabilities were placed in the local Greek market, with no product available to offer into Derince. Any future offers may be at lower levels, perhaps coming in at around $1,075/t for SN 150, with SN 600 at around $1,125/t.

With no further information, Group I base oils from Tupras from Izmir refinery remain priced as per last, and with numbers given 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.

Elsewhere in this report, the subject of Russian imports going into the U.A.E. for blending and re-export to various markets was aired. Lukoil will possibly supply two cargoes from Limas terminal in Turkey, for toll blending operators in Sharjah. The cargoes loaded for Singapore have been substitute quantities for a Baltic cargo that never happened. A cargo of 6,500 tons of Russian export barrels loaded last week from Limas terminal, freeing up space for supplies tor the United Arab Emirates. Base oils will be sourced out of Volgograd refinery.

Group II ex-tank prices are taken lower this week, with levels now at €1,175/t-€1,220/t for the three lower vis products – 100N, 150N and 220N – and 600N at €,1345/t-€1,425/t. Supplies of Group II grades are sourced from the Red Sea, the United States, 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 lowered and are now assessed at €1,795/t-€1,825/t FCA. Fully-approved Group III grades delivered into Gemlik from Cartagena refinery remain priced at €2,200-€2,250/t FCA.

Middle East

Red Sea reports carry news that the production problems at Yanbu refinery appear to have been solved and that activity at the refinery has returned to normal. There is a backlog of cargoes to load for the west coast of India and the United Arab Emirates, but according to shipping reports, these parcels will be underway as soon as possible. Large cargoes of 17,000 tons each will be loaded for Mumbai anchorage and another for Fujairah, Hamriyah and Jebel Ali in the U.A.E. Another smaller parcel is programmed to move into Egypt, with the same vessel delivering into Sudan en route.

The large cargo from Yanbu and Jeddah has been delayed but should load this week or next for U.A.E. ports. Supplies were already loaded for Fujairah, Hamriyah and Jebel Ali, suggesting that stocks of base oils in Yanbu have covered one large cargo of 17,000 tons of Group I and Group II base oils.

The ExxonMobil cargo from Augusta and Valencia to the U.A.E. arrived into Jebel Ali in the past few days.

Group II cargoes are arriving into the U.A.E. from sources in various countries, with material coming in from South Korea, the United States and Europe, in addition to the delayed and loaded cargoes coming from the Red Sea ports. Global producers of Group II base oils are represented in the U.A.E., including Chevron, ExxonMobil, Luberef SK and S-Corp. Lately, GSC started making inroads to U.A.E. markets.

Group I base oils remain the workhorse base oil type at the moment, although there is a heavy leaning towards premium base oils, a move which will only go in one direction. Cargoes of Group I material are supplied from Rayong in Thailand and Singapore. European Group I base stocks will be part of the cargo discharging in Jebel Ali. Other supplies of Group I base oils are coming out of Indian refineries in Haldia and Chennai, where imported cheap Russian crude means that Indian Oil and Hindustan Petroleum can produce extra quantities of Group I base oils for export. These quantities are sold to receivers in the U.A.E. and Pakistan.

One or more cargoes will load from Limas terminal for U.A.E. receivers in Hamriyah. It is unclear whether there will be one parcel of around 10,000 tons or two cargoes making up the total quantity. This will depend on available vessels and also the trans-shipment logistics from Volgograd refinery, from where the base oils will come. Vessels can be difficult to find for Russian charterers because of the many restrictions placed on them post the Ukraine invasion. Sanctions and bans that have been in place are not likely to be lifted any time soon. In fact, one EU source commented that the EU ban on Russian imports of hydrocarbons will be made permanent.

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.

Adnoc is loading a further two cargoes from Al Ruwais for Nantong and also for Dordrecht. The first parcel will be for around 7,600 tons of three Group III grades, with the second European parcel around 8,000 tons. This cargo will not load until July, following up on the replenishment cargo, which has already loaded and sailed for Europe.

Netbacks for partly-approved loading out of Al Ruwais and non-approved Group III base oils loading from Sitra refinery are pulled lower due to small adjustments to selling prices in the various markets. Netback returns are assessed at $1,685/t-$1,730/t, for the range of 4 centiStoke, 6 cSt and 8 cSt partly-approved and non-approved Group III base oils.

Netback levels are 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 being sourced from European, U.S., Asia-Pacific and Red Sea producers. Grades are sold ex-tank U.A.E. or on a truck-delivered basis within the U.A.E. and Oman.

Prices remain unchanged, with levels at $1,520/t-$1,465/t for the light vis grades, with 600N at $1,570/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 shipping agents confirm that the vessel carrying a large base oil cargo of 23,600 tons will load this week or next in Rotterdam before proceeding to Fawley to complete. The cargo will initially discharge in Durban, thereafter Mombasa, and the last port will be Dar-es-Salaam. On board will be quantities of Group I, Group II and Group III base stocks, in addition to easy chemicals. 

In West Africa the rainy season started, and the markets in places like Nigeria are slowing down, with demand waning and activities much reduced during this seasonal spell. Problems continue to beset the base oil market, with competition for market share fought out between a few traders. The elections have proved troublesome, with the inauguration of the new president looming large over proceedings. At the same time there is a legal challenge to his appointment from the opposition party. This has thrown all the banks and administration into chaos.

Dollar availability remains a real problem for the local banks, with traders having to accept part-payment for cargoes in unconfirmed letters of credits, local naira, and dollars in cash for some pre-payments using the parallel market rates – which can be very different to the National Bank rate.

The difficulties of having multiple receivers taking part cargo, with various payment types and different views on the inevitable demurrage, has become even more of a nightmare than in previous years gone by.

The Nigerian market has seen some innovative cargoes coming in over the past couple of months. These parcels were loaded out of South Korea, and against all odds, the freight costs. These cargoes were Group II base oils, which must be among the first for the Nigerian market. Companies represented in Nigeria, such as Total and Castrol, would be interested in laying hands on Group II base stocks to blend premium finished lubricants.

With European suppliers not in any position to offer for large slugs of Group I base oils, the options to find availabilities are limited. With Livorno refinery reporting that October would be the earliest date for availability of product, there is no possibility for a July loading from that source.

Russian material from Kaliningrad remains on offer out of Svetly terminal, but with current trading difficulties and demand down because of the rains, the timing may not be ideal. Problems will have to do with payment and letters of credit, and the obtaining of an import license for the cargo, which is only granted following the issuance of a local bank’s letter of credit.

Prices are under pressure from competitive offers coming from one or two traders, with the result that prices may start to weaken over the next month or two, although most traders will try to keep levels around today’s prices, if possible.

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.

New offers for future into July or August loading may have slightly lower prices because of competition. CFR prices are anticipated to be SN 150 at around $1,075/t-$1,095/t, SN 500 at $1,145/t-$1,175/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.

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