EMEA Base Oil Price Report


Base oil markets around Europe, the Middle East and Africa are somewhat lethargic, with many areas affected by holiday celebrations going on now or coming over the next several weeks.

In addition, demand in big markets such as the United Kingdom, Germany and the Netherlands is being hurt by high inflation and higher interest rates that are curbing business activity.

Meanwhile, civil unrest France is impacting lube businesses there as many blending plants have suspended operations as a safety precaution.

The Eid al-Adha holidays are dulling activity in Middle East Gulf regions, including Turkey where everything appears to have ground to a halt. The overall impact is a slowdown in trade even before the European summer holiday season, which starts in earnest in around two weeks.

Prices for API Group I base oils are coming under downward pressure as producers try to clear surplus inventories before the summer holiday season, reducing the base oil premium over diesel and incentive to produce greater quantities of base oils. With no export cargoes moving to the usual destinations such as West Africa and the Middle East Gulf, Group I sellers are dependent on local and regional markets to take up base oil availabilities.

The Group II situation appears more favorable for producers as some commented that refinery output and imports are all being taken up, perhaps because some lubricant blenders are looking to top up inventories prior to August and the holiday period.

Group III markets around the regions have shifted from a balanced scenario to oversupply, and with demand waning in many areas, prices are falling, and markdowns are gaining pace each week. Some market sources say it has been too long coming – that Group III values were too high in relation to Group II and that the gap was bound to narrow. Now that is happening.

Crude oil prices had been forecast to rise but remained almost static the past week. Some analysts still predict demand will return after summer, but there are few signs so far that it will happen. A number of large economies are still depressed, and China and India are both absorbing large swathes of cheap Russian crude. 

Dated deliveries of Brent crude rose around $1 the past week to $75 per barrel, now for September front month settlement. West Texas Intermediate crude was also little changed at $70.25/bbl, still for August front month.

Low-sulfur gas oil is tracking similarly and is now at $701 per metric ton, still for July front month. All these prices were obtained from London ICE trading late July 3.


The European Group I export market still is not functioning due to lack of demand in export destinations, or it may be down to alternative supplies that are lower in price and more available. In any case, European producers have little availability to offer for export, and there is little sign that the situation will change any time soon. 

In-house and contracted cargoes are still around from the majors, either moving base oils around to balance inventories in delivery hubs or supplying contracted barrels to affiliates and also to longer-term receivers. Group I cargoes have been reported moving from Northwestern Europe to South Africa, West Africa and the Far East and from the Mediterranean to Singapore.

There are some reports that the Eni refinery in Livorno, Italy, could resume production in July or August, but it is not clear whether some output would be available for export or how much. A restart of that plant could open the door for mainstream API Group I supplies to flow into the Turkish market or may open opportunities for trade into West Africa. At the moment, Italy’s base oil demand is being partly met by imports from Poland.

Prices for Group I exports from Europe, purely notional currently and only for comparative purposes, fell this week to between $830 per ton and $940/t for solvent neutral 150, $950/t-$1,055/t for SN500 and SN600 and $1,200/t-$1,270/t for bright stock, all on an FOB basis. The lower ends of the ranges are based on a small sale tender out of a southern Baltic port.

Prices for Group I sales within Europe were lowered from the start of the month. Sellers are keen to move as much material as possible prior to the vacation month of August. Sellers were previously offering discounts to buyers agreeing to accept their full allotments for July, but the incentives now appear available for any quantities.

Demand is weak, but sellers are hoping that July could show an uptick in sales. Availabilities remain good, if not long, and buyers are able to shop for the best deals.

Values for Group I sales within the region are now at €885/t-€965/t for SN150, at €990/t-€1,075/t for SN500 and around €1,220/t for bright stock.

The euro’s exchange rate against the dollar was $1.09159 on July 3. The price differential between Group I sales within Europe and exports was basically unchanged this week at €75/t-€125/t, export prices being lower.

European Group II prices have weakened in the past couple months, since major suppliers raised prices on the assumption that demand was rising. The anticipated uptick stuttered, and the outlook is now less optimistic due to sagging European economies.

Demand is said not to be strong but is sufficient to soak up locally produced material along with imports from the United States and Asia, although import quantities have slowed.

The Group II premium to diesel remains high but stable, but there is an expanding gap between Group I and Group II prices, and this could exert pressure on the latter values.

Prices are unchanged this week 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. The two lightest grades are typically priced higher than 220N. All of these prices apply to a large range of oils from Europe, the U.S., Asia-Pacific and Red Sea sources, imported in bulk or flexi-tanks.

Group III oils have been on a sporadic slide featuring several large reductions accomplished through discounts – most offered by newcomers the European market, which is still considered lucrative.

Buyers in the Mediterranean and Northwestern Europe are looking to take Fischer-Tropsch Group III+ base oils, with sellers confirming availabilities of relatively small volumes – around 300-400 tons delivered in flexies, priced at €1,745/t-€1,785/t on a CIF basis ex Mediterranean ports.

Further discounts for mineral oil Group III reduced prices the past week by €60/t-€85/t. Grades with partial slates of finished lubricant approvals or without approvals are now at €1,550/t-€1,695/t for 4 and 6 centiStoke. Eight centistoke material is not available, but if it were should be priced at €1,545/t-€1,675/t based on the values for lighter grades. All of these prices are on an FCA basis ex Antwerp-Rotterdam-Amsterdam or Northwestern Europe.

Group III base oils produced in Cartagena, Spain, now the only ones to hold a full slate of finished lube approvals, including Volkswagen’s VW 504/507, are at €1,955/t-€1,985/t for 4 and 6 cSt. Small quantities of 8 cSt are available in Europe at €1,920/t-€1,935/t. All of these prices are on an FCA basis ex hubs in Antwerp-Rotterdam-Amsterdam, Northwestern Europe and Spain.

Baltic and Black Seas

Export Baltic trading has almost disappeared as the absence of Russian export barrels coming into the European markets has meant that only deep-sea cargoes are anticipated loading out of Svetly in Kaliningrad and Riga. There have been other moves to load Russian barrels through St Petersburg, presumably supplies are being barged down the river from northern refineries or trained in by railcars.

The majority of cargo movements are now being imported into Baltic States from mainland Europe, the U.S. and Asia-Pacific sources. Group I, Group II and Group III base oils are now part of the new trading pattern with Lithuanian and Latvian blenders.

A great deal of work has gone on behind the scenes between blenders and additive manufacturers to accommodate the new base oils being used. In some cases, Russian-produced additives were used, this procedure having had to change after the European Union ban. Since many of the original formulations were based on Russian Group I and Group III base stocks, the change over to imported material from sources around the globe has been momentous.

Rerefined oils are in the portfolio of new base oils being used in the Baltic. Base oils are being supplied in handy sized cargoes, normally at 3,000-4,000 tons per parcel.

Lukoil still maintains the terminal plant at Svetly, although cargo movements from this source are sporadic to say the least, with shippers having to search for available vessels that can take odd cargoes to Turkey, the United Arab Emirates and Singapore. This operation is extremely difficult, using mainly Turkish flagged vessels, which become available following discharging chemicals or clean petroleum cargoes in the Baltic or other northern European ports.

Lotos and PK Orlen in Gdansk have intimated availabilities for a sale tender for July. Some 4,000 tons in total made up of three Group I grades will load from Gdansk later this month. The cargo will be comprised of 1,500 tons of SN 150, 2,000 tons of SN 500 and 500 tons of bright stock. The prices bid were exceptionally keen and are believed to be respectively, $830/t, $950/t and $1,200/t. The solvent neutrals bid levels are considered to be below the market, but perhaps these are the new price levels for Group I base oils.

FOB prices from Svetly are only “guesstimated” by taking CIF prices landed into Gebze, less estimated freight costs and a margin. As an indication only, SN 150 is taken lower to around $725/t-$765/t, with SN 500 indicated at $770/t-$800/t. Delivered prices vary from one destination to another and also from one receiver to another, and as a rider, these prices may not be accurate FOB levels. Prices are on a “best indication” basis only.

FOB prices for Group l base stocks from Gdansk refinery in July will now be realigned to take account of the latest tender bids. Levels on an FOB basis are SN 150 at $830/t, with SN 500 at $950/t and bright stock at $1,200/t.

Turkey has gone into Eid al-Adha holiday mode, meaning that very little business was transacted up until the end of the holiday, officially July 1. With the weekend being part of the three-day period, family celebrations are expected to have continued until early this week. Turkey continues to import large quantities of Russian SN 150 and SN 500 with some 3,000 tons of material arriving from Svetly in the north, with main supplies coming out of Volgograd refinery, delivered into Turkish ports via the Volga River and the Black Sea.

Livorno may once again be considered for mainstream supplies of Group I grades if the restart of operations and availabilities goes according to new information received last week. The word is that operations producing base oil will recommence during July, or at worst in August. With the refinery at Aghio about to go into turnaround and being short of Group I base stocks, there is not much likelihood that supplies of Mediterranean barrels will be coming from that source.

Mediterranean-sourced Group I cargoes are scarce, with one option being ExxonMobil from Sicily or from the Valencia hub. An offer was made from Augusta, but prices were too rich for Turkish buyers. Prices were reckoned to be around $300/t higher than Russian barrels on a delivered basis.

ExxonMobil’s offer out of either Augusta in Sicily or Valencia was priced with SN 150 at $1,050/t, with SN 500 at $1,120/t basis CIF Gebze.

A cargo of 6,000 tons, made up of three Group I grades, discharged in Gebze. This was a cargo from Sonatrach in Algeria, with quantities of 3,000 tons of SN 500, 2,500 tons of SN 150 and 500 tons of bright stock 150. CIF-delivered prices were very competitive and were confirmed at $875/t for SN 150 and SN 500 at $995/t, while bright stock price was not heard.

Further Baltic cargoes of various quantities are being considered for Turkey, but these movements are very much dependent on finding vessels to carry cargoes. There are varying sizes from 3,000 tons up to 12,000 tons, with the final quantities being ultimately determined by the available vessel.

Group II ex-tank prices are unaltered this week, with levels remaining at €1,175/t-€1,220/t for the three lower vis products – 100N, 150N and 220N – and 600N at €1,345/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 appointed distributors on an FCA basis, or on a truck-delivered basis, are maintained and are assessed at €1,725/t-€1,775/t FCA. Fully-approved Group III grades delivered into Gemlik from Cartagena refinery are now priced at €2,100/t-€2,150/t FCA.

Middle East

Red Sea shipping reports show a number of both small and large cargoes to be loaded out of both Yanbu and Jeddah for the west coast of India, Egypt and Sudan. One cargo of 17,000 tons loaded for receivers at Mumbai anchorage, and although Luberef is still supplying cargoes of base oil into India, the frequency has altered. Less material is coming out of Saudi Arabia – this may be down to the large quantities of cheap Russian crude that is flowing into the Indian market, allowing Indian refiners to produce extra quantities of Group I base oils, which may detract from the Luberef supplies. A smaller cargo of 3,000 tons loaded out of Yanbu for Egypt. The shipping inquiries for Aqaba in Jordan remain as an inquiry with no fixture to date.

Middle East Gulf shipping news indicates that large Group II cargoes will arrive into the United Arab Emirates ports of Fujairah, Hamriyah and Jebel Ali. These cargoes are sourced from a number of suppliers in South Korea, the U.S. and Europe. A cargo will arrive from Yanbu, with Luberef supplying a large share of Group II base oils coming into the U.A.E. Adnoc at Al Ruwais refinery also produces around 120,000 tons of Group II grades, in addition to Group III. The Adnoc production is generally retained and used internally for in-house blending.

Demand for Group II base oils is rising in the U.A.E. and may become the mainstay base oil to be used in the U.A.E. in the future. Group I base oil cargoes still move into the U.A.E. from Saudi Arabia, Europe and Thailand, although recent offers from a U.S. trader were rejected in favor of taking more Russian barrels delivered in various cargo sizes from Limas terminal in Turkey. As an alternative, there are plans to load out of Kaliningrad with a larger parcel of up to 12,000 tons. Cargoes are confirmed, but no shipping has been seen booked to load these cargoes.

Smaller cargoes of 2,000-4,000 tons of Group I base oils will be arriving into U.A.E. ports of Ras Al Khaimah and Hamriyah from sources in Thailand, Singapore and Indonesia. It is not known if these smaller parcels are sold on an FOB basis or if traders supply quantities on a CIF basis, after having bought FOB and then chartered vessels to take material into the U.A.E. Alternative supplies of Group I base oils are being sourced from Indian refineries in Haldia and Chennai, where Indian producers Indian Oil Corp. and Hindustan Petroleum Corp. buy low cost Russian crude imports and are producing larger quantities of Group l base oils to be exported.

Middle East Gulf Group III exports have fixed a number of vessels to carry cargoes from Bapco ex Sitra refinery in Bahrain, and other vessels to load for Adnoc out of Al Ruwais in Abu Dhabi. The larger cargo of almost 24,000 tons loaded out of Qatar for Shell. This cargo is destined for Singapore and a mainland Chinese port. Some quantities from this cargo may be sold to distributors, who may then resell to European traders in flexies.

Adnoc is to load a cargo from Al Ruwais for Europe during the first half of July. This replenishment cargo for the European market will load with around 7,200 tons for ultimate discharge in Dordrecht. Chemlube S.A., acting as distributors for Adnoc Group III in Europe, will resell three grades of Group III base oils into the European markets.

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, but with evidence of further price erosion in a number of Group III markets, levels may have to be re-assessed during this week. Netback returns are assessed at $1,625/t-$1,685/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 sold 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 U.A.E., or on a truck-delivered basis within the U.A.E. and Oman.

Prices are maintained at 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.


There are no further reports from South African sources, following confirmation that the vessel loaded with a large base oil cargo of around 23,000 tons sailed for Durban after loading in Rotterdam and Fawley. The cargo will initially discharge in Durban, Mombasa in Kenya, and the final port Dar-es-Salaam in Tanzania. The further cargo of around 19,000 tons has not yet had a vessel nominated and this fixture will be followed once the vessel has been fixed.

The rainy season has another few weeks to go in West Africa, normally lasting from June through to September and continues to affecting base oil business in Nigeria, Receivers are not keen to take supplies of base oil during this season because of two reasons. First, it becomes difficult to move stocks from storage tanks in Apapa to benders located in the hinterland of Nigeria, and often in other neighboring countries, such as Cameroon and Toga.

Demand for buying base oils has fallen away, although a number of enquiries have been made to traders for supplies to arrive at the end of July or early August. The usual problems have started – with more than one receiving party involved in a large base oil cargo, with varying quantities, various payment proposals, and the nightmare scenario of having to accept naira payments, part unconfirmed letters of credit, and cash with dollars procured from somewhere on the back market.

Add these problems to almost certain demurrage on vessels arriving with base oil cargoes – demurrage that eventually will either remain unpaid or will be heavily discounted for settlement – and trading base oil in Nigeria is a special business and is not for the fainthearted.

A major is arranging for a cargo to deliver Group I base oils into Guinea, Cote d’Ivoire and Ghana. It is believed that this cargo may load only out of Fawley, avoiding a two-port load, taking around 9,000 tons of three Group I grades, 5,000 tons of which will be supplied under the Ghana contract arrangements into Tema port.  

Prices for a delivered cargo had CFR confirmed by traders at levels of $1,020/t for SN 150, SN 500 at $1,070/t and SN 900 at $1,150/t.

New offers for future cargoes for later this month of for August loading may be slightly lower prices due to trader competition and also lower FOB numbers. CFR prices may in the following ranges: SN 150 at around $1,065/t-$1,085/t, SN 500 at $1,155/t-$1,175, with SN 900 at $1,200/t-$1,235/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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