EMEA Base Oil Price Report


If it is at all possible, base oil markets in Europe, the Middle East and Africa are slowing further, with many players – following coronavirus pandemic and Russia’s invasion of Ukraine – taking time for vacations away from the dull dealings of a flat market.

Demand continues to lag in most regions, except for pockets of activity in the Middle East and in Eastern and Southern Africa. Europe is lacking demand for finished lubricants and has been for some months, and this of course is impinging on base oil sales.

Major economies still appear poised on the brink of recessions. A rare bright spot is that many economists are forecasting that inflation will start to fall back in Europe as it has in the United States. If so, it should improve the environment for commercial borrowing and investment, which has been a pretty barren field lately.

The European API Group I market remains subdued, with exports lacking and demand within the region falling away due to holidays. Prices are coming under renewed pressure as producers try to spur some demand before August. As supply lengthens, small hopes are being pinned on Iberian markets, where local demand is undergoing a mini-surge, but how long it will last is anyone’s guess.

The Group II market was balanced a couple months ago but is also turning long as demand decreases. Alternative markets are saturated, so suppliers in outside regions are looking to grab a share of the European market. That market has been relatively lucrative, but as players emerge from Asia-Pacific and the United States, it raises the possibility of that region likewise developing an over-supply that pushes down prices.

The region’s Group III market is already in such a state, and additional shipments continue to arrive from the usual sources in the Middle East Gulf and Asia-Pacific, contributing to a price war as suppliers try to move product out of storage tanks to make room for new cargoes.

The only source of upward pricing pressure has been the relative strength of crude and feedstocks values, which have held up in the face of weak demand. The explanation reason is unclear as there is no evidence of demand rising in major economies such as China and India, where low-priced Russian crude continues to flow, and outlooks for Western markets remain cloudy thanks to inflation and high interest rates. Neither are there supply issues for OPEC+ members.

Crude prices climbed between $3 and $4 per barrel over the past week, reaching $82.25/bbl for September front month settlement for dated deliveries of Brent and $78.40/bbl for West Texas Intermediate, also for September front month. The latter number may have risen more in light of improving inflationary data from the U.S. Federal Reserve, which suggests the American economy may be one of the first to emerge from the cycle.

Low-sulfur gas oil prices jumped more than $80 per metric ton the past week to $828 per metric ton, now for August front month. All of these prices were obtained from London ICE trading late June 24.


Once again there has been almost no Group I exports from Europe except for the Orlen refinery in Gdansk, Poland, offering a small parcel with 2,000 tons each of solvent neutral 150 and SN500. This cargo could end up in Northwestern Europe, Antwerp-Rotterdam-Amsterdam or the United Kingdom, or even in one of the Baltic states and therefore not count as an export cargo.

Since Group I prices are generally under pressure, there may arise instances where some other producers could have sufficient surplus quantities to offer for export sales. The question, though, is where would such availabilities go. Traditional markets such as West Africa are not currently in mode to take Group I supplies.

However, should August bring a temporary halt to domestic buying, quantities of Group I base oils may start to appear for export sales. Large major producers are balancing inventories by moving material to and from satellite hubs.

The Group I base oil premium to diesel is narrowing as base oil prices fall and diesel prices rise. An increase in raw material costs often lead to base oil price hikes, but the trend for supply-demand balance is creating downward pressure.

Information about the future of the base oil plant at Eni’s refinery in Livorno, Italy, remains vague. The company has floated plans to switch the facility from a conventional fuels refinery to a producer of biofuels, raising the possibility that base oil production would case. The latest word is that base oil output will continue, but it is not clear how that would be achieved. Since biofuels refineries do not make base oils, conventional mineral oil feedstock might have to be transported to the facility.

Group I export prices remain hypothetical but are slightly reduced this week to between $800 per ton and $855/t for SN150, $920/t-$985/t for SN500 and SN600 and to $1,100/t-$1,175/t for bright stock.

The market for Group I sales within does exist and for the moment seems more stable. A Hungarian refiner has begun a scheduled maintenance turnaround, notifying buyers that availability will be affected until the plant restarts in around four weeks. The company announced big price hikes immediately before the shutdown began.

Base oil demand remains weak due to poor sales of finished lubricants, but vacuum gasoil prices rose during the past week, creating some upward pressure.

Prices for Group I exports from Europe are unchanged this week at €885/t-€965/t for SN150, €990/t-€1,075/t for SN500 and €1,195/t,-€1,235/t for bright stock.

The euro’s exchange rate against the U.S. dollar dipped again the past week to $1.10829 on July 24. The price differential between Group I exports and sales within the region is hardly changed at €95/t-€145/t, exports being lower.

API Group II prices around Europe are stable, but discussions about what will happen next month are interesting. Producers and importers are spreading news about increases in crude and feedstock costs, while buyers are focused on the trend toward looser availability.

One importer from the U.S. has offered lower numbers for prompt deliveries or collections: $950/t for 100 neutral, $920/t for 220N and $1,000/t for 600N, all on an FCA basis ex Rotterdam. The interesting point in this set of prices is how aggressive these numbers are given the current market, and also that they are offered in U.S. dollars, not euros as is the case with the majority of other sellers in European markets.

These prices apply to transactions in August, when sales will be expected to slow. It will be interesting to see if there is any response from other suppliers.

Aside from this supplier, Group II prices slightly lower this week at €945/t-€1,100/t ($1,040/t-$1,210/t) for 100N, 150N and 220N, and €1,275/t-€1,325/t ($1,400/t-$1,460/t) for 600N. 100N and 150N are typically priced higher than 220N due to their popularity in Europe. All of these prices apply to a large range of Group II base oils from Europe, the U.S., Asia-Pacific and Red Sea sources, imported in bulk and in flexi-tanks.

Downward pricing pressure continues to build for all Group III base oils. The joint venture plant in Cartagena, Spain – now the only Group III source with a full slate of finished lubricant approvals – has so far mostly resisted, although it has conceded discounts of around €100/t to some buyers.

Buyers in the Mediterranean and now Northwestern Europe are receiving offers for small quantities of gas-to-liquids Group III+ base oils in flexies. The latest prices for these grades are around €1,720/t-€1,755/t on a CIF basis ex Mediterranean ports or €1,745/t-€1,775/t on a CIF basis ex Northwestern European ports.

The principal company controlling the sales and distribution of these oils, which are produced in Qatar, has a large cargo of around 24,000 tons on the high seas in route to Europe. It will be interesting to see if these base oils are openly offered into the European market as Group III+ base stocks or sold as “blend packages” with lubricant additives blended in.

Prices for Group III oils with partial slates of finished lubricant approvals or without approvals are assessed lower this week at €1,525/t-€1,610/t for 4 and 6 centiStoke grades and €1,525/t-€1,575 for 8 cSt, all on an FCA basis ex Antwerp-Rotterdam-Amsterdam and Northwestern Europe. One supplier offered 4 and 6 cSt oils below €1,500/t, but the specifications for these grades are lower and may not meet the viscosity index for Group III.

Prices for fully-approved Group III base oils from Cartagena decreased the past week to €1,925/t-€1,965/t for 4 and 6 cSt while 8 cSt oils – sold in Europe in small quantities – are at €1,915/t-€1,930/t, all on an FCA basis ex hubs in Antwerp-Rotterdam-Amsterdam,  Northwestern Europe and Spain.

Baltic and Black Seas

Baltic reporting has been changed, with the end to Russian export barrels coming into the European Union and other locations, such as the U.K. and Scandinavia. It is being considered that reporting of prices for export sales from the Baltic should perhaps cease because the assumptions and guesswork involved do not make for satisfactory confirmed prices. Communications are very difficult, and information is not forthcoming. Pricing models appear to be random, and amidst all the problematic reporting, there is not a great deal of trade taking place out of the Baltic ports.

The report will now be confined to shipping reports of base oil movements from Svetly and Riga and the destinations of these cargoes. A few parcels will load out of Kaliningrad for Lukoil sales into Turkey, and occasionally into Nigeria. These parcels are very dependent on shipping availability, with the cargo sizes adapted to fit the vessel – not the normal way to charter for a fixed cargo size. There are no reported cargoes moving or having moved out of Svetly, following the latest small cargo of 3,000 tons into Gebze in Turkey.

Additionally, the report will reflect cargoes of base oils imported into Baltic ports from suppliers around the globe. This will cover all types of base stocks – Group I, Group II and Group III, and quantities of rerefined base oils. Baltic reporting will be incorporated into European mainstream activity as covered by Group I, Group II and Group III. 

Lotos and PK Orlen floated a further tender for 4,000 tons of Group I base oils out of Gdansk. The offer is for 2,000 tons of SN 150 and 2,000 tons of SN500, but no quantity of bright stock on this occasion. This follows the last tender for 4,000 tons, comprised of 1,500 tons of SN 150, 2,000 tons of SN 500 and 500 tons of bright stock. Prices were heard at $830/t, $950/t and $1,200/t, respectively. The new bid prices are not yet available.

Turkish markets are exceptionally quiet, with Russian SN 150 and SN 500 continuing to be imported into Turkey, while the Algerian cargo purchased by Turkish traders did not have REACH – registration, evaluation, authorization and restriction of chemicals – accreditation, and there is some confusion as to what has happened to this 6,000-tons parcel. Rumors are that it was discharged in Gebze and may be under bond until REACH certification can be obtained. Quite how this will work is unknown.

The 6,000-ton cargo, comprised of three Group I grades, is thought to have discharged in Gebze. The quantities were noted as 3,000 tons of SN 500, 2,500 tons of SN 150 and 500 tons of bright stock 150. CIF-delivered prices were confirmed as SN 150 at $875/t and SN 500 at $995/t, with no information heard on bright stock pricing.

Tupras is selling all base oils to the export market, perhaps in a quest to obtain U.S. dollars, since banks in Turkey were banned from issuing foreign currencies to customers by government edict. The refiner based in Izmir trucks Group I base oils to ports in Marmara Sea, such as Aliaga and Gebze, and resells quantities on an FOB basis. No local buyers in Turkey can afford FCA prices, which were aligned with the highs of a well known base oil report.

Reported prices for the sale tender were SN 150 at $850/t, SN 500 at $945/t and bright stock at $1,200/t, basis FOB Gebze or Aliaga.

Russian base oils imported into the Turkish market now have delivered prices indicated at around $865/t for quantities of SN 500, with SN 150 levels at around $850/t. All basis CFR Turkish ports.

Mediterranean sources for Group I base oils were limited to ExxonMobil out of Sicily or Valencia, with Livorno not in production at this time and with Motor Oil Hellas from Greece net short of Group I base oils, and only covering the local Greek market. ExxonMobil continues to offer supplies of Group I base oils, but prices are too high for Turkish buyers. Latest delivered prices were heard around $1,025/t for SN 150, with SN 500 pitched at $1,090/t basis CIF Gebze. It is not known if this offer had any interest from Turkish buyers, but interest was probably unlikely, since Russian barrels are being priced around $220/t lower.

Group II ex-tank prices are maintained, with levels at €1,050/t-€1,075/t for the three lower vis products – 100N, 150N and 220N – with 600N at €1,240/t-€1,265/t. Supplies of Group II grades can be sourced from the Red Sea, the United States, South Korea and Rotterdam or from 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, assessed at €1,725/t-€1,775/t FCA. These prices may come under pressure, following a European distributor dumping quantities of partly-approved Group III base oils from Antwerp-Rotterdam-Amsterdam storage into the Turkish market. Presumably, this will afford time to clear for an impending supply arriving on another vessel loading for supply into Antwerp-Rotterdam-Amsterdam. Comments heard around this exercise suggest that prices in Turkey may be higher than for Antwerp-Rotterdam-Amsterdam, but the cargo quantity may take some time to sell.

Fully-approved Group III grades delivered into Gemlik from Cartagena refinery are priced a little lower this week and are now at €2,065/t-€2,100/t FCA. Small cargoes of 1,200-1,800 metric tons are servicing this requirement.

Middle East

Red Sea reports contain news of fewer cargoes moving into the west coast of India. This may be due to the time of year, with the monsoon season just coming to a close, or it may be a function of the increased quantities of Group l base oils produced in India due to the proliferation of large quantities of cheap Russian crude oil coming into that market. Large cargoes are still loading out of Yanbu and Jeddah for the United Arab Emirates, but even this frequency has lessened, perhaps due to the time of year, when many U.A.E. residents move out of the region due to high ambient temperatures. Other cargoes are seen for Egypt and Aqaba in Jordan.

One large parcel will load out of Yanbu and Jeddah, discharging in Fujairah, Ras Al Khaimah and Hamriyah in the U.A.E. Another 12,000-ton cargo will load from Yanbu only, discharging during August in Jebel Ali. This cargo is expected to be comprised of Group II base oils, contributing to the supply of Group II base oils into the U.A.E. Red Sea shipping reports show two large cargoes loading out of Yanbu and Jeddah for the west coast of India and the U.A.E. India has surplus quantities of Group I base oils due to cheap Russian crude imports. The quantities of base oils moving from Yanbu are possibly Group II grades, but with Jeddah also as a load port, Group I base oils must be part of the cargo. A 6,000-ton parcel of Group II base oils is being lined up for South Africa.

From Yanbu and Jeddah a large Group I and Group II cargo will discharge in Fujairah, Ras Al Khaimah and Hamriyah in the U.A.E. Another cargo of some 12,000 tons will load from Yanbu only and will discharge during August in Jebel Ali. This cargo will be Group II supplies and will contribute to the U.A.E. supply of Group II base oils. Local production of Group II base oils are available from Adnoc at Al Ruwais refinery in Abu Dhabi. This facility has a nameplate capacity of 120,000 tons for Group II grades, in addition to the main production of 450,000 tons of Group III base oils. Adnoc retain most of the production of Group II base oils to accommodate in-house blending of Adnoc finished lubricants in addition to other toll blending operations handled through the blending plant.

The move away from Group I base oils in the U.A.E. is gathering pace, with premium quality base stocks now predominant in this market. The move to Group II and Group III base oils has been dictated by new vehicles and industrial development throughout the U.A.E. and in other parts of the Middle East Gulf, such as Bahrain and Kuwait. This new generation of finished lubricants is required throughout the Gulf. Dubai has transformed itself into the new center for Russian money, with many oligarchs moving to Dubai and purchasing property in the new luxury developments. Direct flights between many Russian cities and Dubai are operating on a daily basis and have become more frequent, as the time passes following the invasion of Ukraine.

Lukoil continues to send Russian base oils into the U.A.E., which are being used in toll blending operations for sub-standard finished lubricants that are exported to East Africa and other Middle East Gulf countries. There are operations for these lubricants to reach the United Kingdom and European Union markets at ridiculously low prices. This report has been criticized for not more strongly condemning this practice, which could be reasoned to be a form of money laundering and will most certainly breach EU and allied bans on the importation of Russian hydrocarbons and any derivatives. Action has to come from bodies such as the Office of Financial Sanctions Implementation, which is part of the U.K. Treasury, dealing with sanctions on Russia and Russian assets.

Group I base oil cargoes still arrive into the U.A.E. from Saudi Arabia, Russia and Thailand, but minus Iranian material taken into the U.A.E. Before, the west coast of India was the targeted market. India now has a surplus of Group I base oils created through the vast quantities of cheap Russian crude that is shipped legally and illegally into Indian ports.

A couple of potential Russian export cargoes are being considered, probably not coming from Svetly in the Baltic, but more than likely from Limas terminal in Turkey. These parcels are not fixed firm as yet but are shipping inquiries in the market. Accessing vessels to take these cargoes remains a problem for the sellers. Contracts apparently have been finalized, and letters of credit opened, but there are still delays either from the banking side or from no vessels being located to load the contracted quantities.

Group III exports were at their highest during the months of May and June, with India and China demand soaring. Cargoes continue to be delivered into Indian, Chinese, U.S. and European markets, with charterers fixing vessels to load out of Sitra and Al Ruwais. A further large cargo of up to 24,000 tons loaded from Ras Laffan in Qatar for Shell. It is understood that this cargo is to sail for Europe, where the market waits to find out how this quantity of premium Group III+ will be distributed.

Netbacks for partly-approved base oils loading out of Al Ruwais and both partly-approved and unapproved Group III base oils loading from Sitra are once again maintained. Levels remain as previous, with netback returns at $1,600/t-$1,655/t, for 4 cSt, 6 cSt and 8 cSt partly-approved and non-approved Group III base oils.

Netback levels are derived from regional selling prices, minus 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. is 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 unchanged at $1,520/t-$1,465/t for the light vis grades 100N, 150N and 220N, 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 Africa shipping sources in Durban again confirmed that yet another large base oil cargo will load out of Rotterdam and Fawley during the second half of August or the first half of September. This vessel may supply into Durban and then additionally, quantities into Kenya and Tanzania. The routing of the cargo is not finalized and may also include supplies to Conakry, Abidjan and Tema.

With this report’s source for a great deal of Nigerian market information languishing on a tropical beach somewhere in the West Indies, the information gleaned is not perhaps as up-to-date as would be the case were the source in place either in Switzerland or in Lagos.

Demand for base oils has been slow following the Nigerian elections and the associated legal challenges and protests, but there are a couple of inquiries for cargoes to arrive into Apapa during August. Traders are looking to source material from the U.S. Gulf Coast and U.S. Atlantic Coast and, depending on the final vessel, to try to put together a cargo of 15,000 tons to 20,000 tons, comprised of Group I base oils – SN 150, SN 500 and SN 900.

With multiple receivers, there will be the usual problems and delays with payment instruments and methods. Nigerian systems are no better at getting trading completed, with the banks in a mess and the country short of foreign currencies, particularly U.S. dollars.

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

Offers for cargoes for August will be lower in the Nigerian market, with some offers containing prices that are unachievable and merely cloud the markets and delay proceedings. Also FOB numbers may be lower, although as mentioned elsewhere in this report, if crude and feedstock prices continue to rise, that may put pressure on Group I base oil numbers to follow.

CFR prices are estimated to fall in the following ranges: SN 150 at $1,000/t-$1,045/t, SN 500 at $1,060/t-$1,175/t and SN 900 at $1,125/t-$1,265/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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