EMEA Base Oil Price Report


Parts of the European, Middle Eastern and African region are showing vibrant activity, whilst others for one reason or another are dull and flat.

Europe is in the latter category, with demand slow and with few positive signs on the horizon for the base oil market. Middle East Gulf markets are buzzing with API Group I and II cargoes arriving almost daily into United Arab Emirates ports, where many blending operations are fully employed, manufacturing finished lubricants for in other Gulf states and East Africa.

West African markets are quiet, mainly due to the start of the rainy season at the beginning of June, literally dampening down activity in main markets such as Nigeria and Ghana, and smaller markets such as Cote d’Ivoire and Guinea. South Africa and East Africa on the other hand are showing increasing demand for finished lubes, contributing to a healthy and expanding base oil demand scene.

Group I demand in Europe is poor, with virtually no export sales taking place, possibly because few refiners have enough surplus barrels for areas where the arbitrage could be open, such as the West Coast of India or the Middle East Gulf.

Group II markets around Europe are in slightly better shape, with hints of demand arising from time to time, but sellers are still hoping  to see more buyers ramp purchases back up to past levels.

The Group III scene has changed over the past couple months from shortages to a market verging on oversupply despite a number of temporary plant shutdowns. New players from Asia-Pacific are moving in to try to take share from existing European suppliers, exerting downward pressure on prices.

Russian Group I exports continue to dominate Turkey and to impact markets the U.A.E., where several large cargoes have been delivered over the past few months. Shipping and chartering suitable vessels has not been easy for Russian and Belarussian sellers, but export outlets are vital to their business.

Crude oil values continue to weaken despite announcements of production cuts by leading members of the OPEC+ group of oil producing nations. Demand is simply lower than was forecasted, and there are few indications that this scenario will change soon.

Many crude producers have kept up output, fearing loss of national revenue from lower sales, but are making sales at lower prices. This is the fine line which crude producers are walking.

Dated deliveries of Brent crude have sunk to $72.15 per barrel, for August front month settlement, around $4.50 lower than last week. West Texas Intermediate fell a similar amount to $67.35/bbl, still for July front month.

Low-sulfur gas oil dropped around $10 per metric ton $688 per metric ton, on the last day of June front month. All of these prices were obtained from London ICE trading late June 12.

There are still no offers nor bids for quantities of Group I exports from Europe. The market is not short, but producers are concentrating on local markets, where delivery is simpler and margins are higher. In addition, there is no demand for export cargoes coming out of European ports, since buyers would have to pay close to European prices. The net result is that possibly the first time ever, there is no real export market.

There are still a number of intra-company or affiliate cargoes being moved by some of the large players, going into markets such as South Africa and East Africa, and also there is hub replenishment with moves from the Mediterranean to Northwestern Europe and vice versa.

Your columnist must emphasize, then prices reported here for Group I exports from Europe are notional, not related to any specific deals, but based on informed assumptions of prices that would occur if offers were made. Those prices are unchanged this week at between $1,020 per metric ton 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.

Demand for Group I sales within Europe is still slow for this time of year, which normally enjoys a boost in activity. July is normally a busy month prior to the holiday season kicking in during August.

Group I base oils are being imported into European storage from a variety of sources, including the United States and the Red Sea. The European Union’s ban on Russian imports eliminated a source that supplied around 200,000 tons of base oil per year, so there is room for oils from alternative sources.

Price indications are still around €1,020/t-€1,050/t for SN150, €1,125/t-€1,155/t for SN500 and around €1,355/t for bright stock – all prices that are set to continue through June.

The euro’s value against the U.S. dollar is unchanged at $1.07551 on June 12, so the price differential between Group I exports from Europe and sales within the region is unchanged at €95/t-€145/t, exports being lower.

Group II markets around Europe have stabilized, with buyers looking to use as much Group II as necessary in base oil blends to avoid use of higher priced Group III. Some lubricant blenders have put their heads together with additive manufacturers to combine Group II and polyalphaolefin as a Group III alternative. PAO prices have dropped dramatically from their highs of last year.

Group II prices are unchanged at €960/t-€1,125/t ($1,030/t-$1,205/t) for 100 neutral, 150N and 220N and at €1,295/t-€1,360/t ($1,421/t-$1,492/t) for 600N. These prices apply to a large 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 remain under pressure from lower priced Asia-Pacific imports. The large differential between Group II and Group III values is still an impediment to demand for Group III and will remain so. As long as PAO prices remain attractive, this will also exclude Group III base stocks in some blends.

Group III availabilities are good, with some suppliers actively encouraging buyers to take full allocated quantities of grades that have full slates of finished lubricants approvals.

The unusual situation where two parties were essentially competing with base oils from the same Malaysian source may have undergone a twist, with some doubts emerging about the specifications of the material being sold by the trader. Some sources have suggested that the material marketed by the trader is of lower quality and may actually be a blend.

Third parties are able to directly purchase GTL Group III+ from the Pearl joint venture plant in Ras Laffan, Qatar, although the license holder of these oils denies it. Prices for these grades are competitive – around €1,765/t-€1,800/t on a CIF basis ex Mediterranean ports in flexies.

Prices for Group III oils with partial slates of finished lubricant approvals are assessed in a wide range of €1,650/t-€1,765/t for 4 and 6 centiStoke oils and €1,685/t-€1,725/t for 8 cSt, all on an FCA basis ex Antwerp-Rotterdam-Amsterdam or Northwestern Europe.

Output from the joint venture plant at Cartagena, Spain, are now the only Group III oils with a full slate of finished lube approvals, including the VW 504/507 passenger car engine oil specification. Prices for the 4 and 6 cSt versions of these oils are at €1,995/t-€2,020/t, on and FCA basis from hubs in Antwerp-Rotterdam-Amsterdam, Northwestern Europe and Spain.

Baltic and Black Seas

Baltic supplies of Russian export grades have seen the loss of EU trade, and now the region has a marked downturn in activity, with Lukoil and one other trader moving cargoes from Svetly terminal in Kaliningrad, and Riga port. There is a lack of information regarding this market now, with few lines of communication still remaining.

With Russian refineries moving out of maintenance and coming fully back on stream, there are only so many outlets in the Russian domestic markets to utilize the internal production. With European trade accounting for some 200,000 tons of Russian export barrels prior to the Ukraine invasion, this has been a terrific blow to traders and sellers trying to move material from this region into new markets.

Sellers are heavily dependent on the Turkish market and also the United Arab Emirates, where a number of cargoes ended up during the last few months. Nigeria remains as a target, but current problems – including the rainy season – are making things very difficult to trade into that country.

Other markets are problematic for logistical reasons, with high freight costs from the remote terminals in the Baltic to deep-sea locations. Pricing for Russian base oils appears to be totally random and is developed to suit the destination market, by attracting buyers by being lower in delivered price than any regional or other alternative imports.  

Movements into the Baltic from European and U.S. sources are happening, with Group I, Group II and Group III base oils going into Lithuania and Latvia, along with rerefined base stocks from Denmark also featuring in a new supply chain. 

Lotos/PK Orlen in Gdansk indicate that they could have availability of some grades in July, but this is not finally confirmed. Currently, this supply point is trucking base oils to Italian blenders by truck, who are unable to receive any material from Livorno refinery due to the current outage. The latest news from Eni is that start-up might be in October, but there are rumors of possibilities that base oil production at this refinery may never be restarted.

FOB prices from Svetly are assessed using CIF prices landed into Gebze, less freight costs. As an indication only, SN 150 levels are taken lower and are considered to be around $785/t-$825/t, with SN 500 somewhere at $795/t-$840/t. Prices vary from destination to destination, and these numbers may not be truly representative of FOB levels. These are given on a “best indication” basis only.

FOB prices for Group I base stocks from Gdansk refinery in July will be in line European mainstream pricing. With no export market at this time and prices more than a month away, best estimates are that SN 150 will be at $1,020/t-$1,055/t, with SN 500 at $1,085/t-$1,140/t, ultimately depending on destination. Bright stock, if available at all, may be at $1,295/t-$1,345/t.

Turkey is emerging from its election hiatus, when few trades were completed. The country’s economy continues to be battered by a combination of high interest rates, declining value of its currency and inflation that tops annual rates of 70%.

Russian imports continue to flood the base oil markets. Following the recent Baltic cargo of around 10,000 tons that discharged in Gebze, there is further cargo of a similar quantity planned to load out of Svetly this week. So far, no vessel fixture has been confirmed, so there may be a delay to this loading.

The final quantity for the cargo will depend on a vessel, since the final quantity must fit the vessel, not vice versa, Russian companies being barred from chartering EU or other allied tonnage.  

Greek sellers from Aghio have no availabilities to offer to Turkish receivers. With Livorno out of the picture at least until October, blenders in Turkey looking for higher quality European Group I supplies may have to look at taking product from ExxonMobil out of Sicily or Valencia. Prices for offers from this source are heard at SN 150 at $1,050/t, with SN 500 at $1,120/t basis CIF Gebze.

Alternatively, there is currently a sale tender from Sonatrach in Algeria, offering 3,000 tons of SN 500, 2,500 tons of SN 150 and 500 tons of bright stock 150. Prices required are heard at SN 150 at $875/t, SN 500 at $995/t COF Gebze, but with no reported price for bright stock. These are very attractive price levels and may be snatched up by Turkish buyers, although there appeared to be little response at the end of last week.

Group I base oils from Tupras from Izmir refinery have prices maintained with numbers given in Turkish lira. Spindle at Tl 20,725/t (U.S. $1,057/t), SN 150 at Tl 17,269/t ($881/t), SN 500 at Tl 19,999/t ($1,020/t) and bright stock at Tl 24,767/t ($1,263/t). Prices are for ex-rack truck sales.

Group II ex-tank prices are maintained, with levels at €1,175/t-€1,220/t for the three lower vis products –  100N, 150N and 220N – with 600N at €1,345/t-€1,425/t. Supplies of Group II grades are sourced from 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, remain unchanged this week, 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/t-€2,250/t FCA.

Middle East

Red Sea activity is centered around a number of large cargoes loading out of Yanbu and Jeddah for the west coast of India and the United Arab Emirates. Following production problems at Yanbu refinery, which appear to have been solved, there seems to be a flurry of action to make up for delayed vessels. Cargoes of 17,000 tons each will load for Mumbai anchorage, and a further parcel will load for Fujairah, Ras al Khaimah, Hamriyah and Jebel Ali in the U.A.E. There were no further cargoes of Group I neutrals loading out of Jeddah moving to northwest Europe, but perhaps this is merely a matter of time, or finding the right vessel to take another parcel of 5,000 tons of two grades.

In the Middle East Gulf regions, an ExxonMobil cargo from Valencia and Augusta in Sicily is discharging in Jebel Ali in the U.A.E.

Group II cargoes coming into the U.A.E. are sourced from various countries, such as South Korea, the United States and Europe, in addition to cargoes coming from Yanbu. Majors and smaller Group II base oil producers are represented in the U.A.E. These suppliers include Chevron, ExxonMobil, Luberef, SK and S-Corp. GS Caltex from South Korea have started supplying their lower specification Group III grades, in addition to Group II grades.

Group I base stocks, originally from Iranian refiners, remain the largest in terms of overall quantities of imported material coming into the U.A.E., although things are changing and there are moves to progress towards premium base oils.

Regular cargoes of Group I material come into the Middle East Gulf from sources in Thailand, Singapore and Indonesia. Other supplies of Group I base oils are being sold by Indian refiners, coming out of Haldia and Chennai. Those are where low-cost Russian crude imports with prices heard as low as $40 per barrel give Indian Oil Corp. and Hindustan Petroleum Corp. the opportunity to produce large quantities of Group I base oils for export that are surplus to local requirements. Quantities of various sized cargoes are sold to buyers in the U.A.E. and Pakistan.

Lukoil is preparing to send more cargoes loading finally from Limas terminal in Turkey for U.A.E. receivers in Hamriyah. The parcel sizes are not defined and will depend on available tonnage to be chartered to make the voyage or voyages. Around 10,000 tons in total will be the target to continue to maintain the U.A.E. as an outlet for export barrels from Perm and Volgograd refineries in Russia.

Group III exports from the Middle East Gulf have cargoes loading for Bapco out of Sitra in Bahrain and Al Ruwais in the U.A.E. Stasco, having the contract for Group III supplies from Bapco for Europe – including Turkey – will look to load at least a further two parcels during the next couple of months. These cargoes will sail to Rotterdam to discharge.

Adnoc will load two cargoes from Al Ruwais for Nantong and also for Dordrecht during June. The first Chinese parcel will be around 7,600 tons of three Group III grades, with the parcel of around 8,000 tons destined for Europe. The European cargo will load in July.

Netbacks for partly-approved base oils loading out of Al Ruwais and non-approved Group III base oils loading from Sitra refinery are maintained this week , although some selling prices heard from India and Europe have been trimmed and may lead to adjusted netbacks over the next couple of weeks. Netback returns are currently assessed at $1,685/t-$1,730/t for 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 sourced from European, U.S., Asia-Pacific and Red Sea producers. Grades are sold ex-tank the U.A.E., or on a truck-delivered basis within the U.A.E. and Oman.

Prices remain unaltered, with levels confirmed locally in the U.A.E. 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 sources confirmed that the vessel taking a large base oil cargo of now 22,700 tons is loading in Rotterdam and may now be en route to Fawley for completion cargo. The cargo will firstly discharge in Durban, then Mombasa in Kenya, with final port being Dar-es-Salaam in Tanzania.

With the rainy season affecting many of the operations and logistics in West Africa, the markets have slowed down, with transportation inland by truck becoming problematic because roads are flooding and being washed away. Demand for buying base oils has almost stopped, and normal activities become much reduced during the wet season.

The base oil market still has terrible problems with access to foreign currency for local banks to be able to open letters of credit. The election has been a disaster for banks and government agencies. The Nigerian administration is in tatters, with legal proceedings still going against the new President.

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

With European suppliers not in any position to offer for large slugs of Group I base oils, the options to find availability for Group I base oils in Europe are nil. And now with Livorno refinery out until at least October, and perhaps not re-starting at all, this puts a different light on accessing Group I material for export markets such as Nigeria from European sources. 

Russian material from Kaliningrad is theoretically still on offer from Svetly terminal, but with demand down because of the rainy season and the current political and economic problems besetting this market, perhaps now is not the time to look at selling into Nigeria.

Prices confirmed for a recent cargo had 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 be slightly lower prices due to some of the trader competition. CFR prices may be in the ranges of 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.

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