EMEA Base Oil Price Report


The holiday season is officially underway in the European, Middle Eastern and African base oil markets, although many players and participants have been missing for a few weeks.

The hiatus could last for the rest of August, so the stage is set for an exceptionally quiet period.

With many blending operations halting or moving to reduced hours, productivity has reached an exceptional low in terms of quantities of finished lubricants coming off production lines. Many companies are taking advantage of this month to perform routine maintenance on plants and machinery.

This quiet spell gives the various factions around base oil markets time to reflect and plan for the resumption of normal operations in September. Those operations still functioning remain subdued with few buyers in the market looking to take major quantities of any type of base oils at the moment.

However, rising crude oil and feedstock costs are creating upward pricing pressure on base oils. Numbers for crude and petroleum products have risen the past three weeks, and whilst these increments have not been meteoric, they have been progressive. Demand will be totally missing during August, but some buyers have been active the past couple weeks, laying in larger quantities of all types of base oil, perhaps fearing price hikes. There are few certainties in this business, however, and crude may not continue to escalate.

API Group I prices had sunk to the lowest levels seen for some time, compressing the premium over diesel, which was rising in value. The premium for Group I grades is now around $290 per metric ton, down from over $450/t some three months ago.

Group II markets have not come under as much downward pricing pressure, perhaps in part because the number of suppliers of that category in Europe is relatively small. This is not to suggest a cartel or any pricing arrangement – just a realistic recognition of the effects of a small number of suppliers.

Group III markets have gone from tight to oversupply across almost all areas of Europe, the Middle East and Africa. New entrants are entering those markets – mostly Asia-Pacific refiners seeing opportunity to tap markets with relatively wide margins.

As mentioned, crude and feedstock prices moved higher again last week, although the trend is hard to explain considering the quantities of crude available and lack of supply interruptions. Demand is still muted in major economies, in Europe, and in countries such as China and India that continue to import huge quantities of Russian crude.

Prices for dated deliveries of Brent crude climbed to $85.50 per barrel, still for September front month settlement, while West Texas Intermediate chit $81.30/bbl, also for September front month. Low-sulfur gas oil rose around $50/t since last week to $870/t, for August front month. All of these prices were obtained from London ICE trading late July 31.


Once again, Group I exports from Europe are nearly non-existent as few sellers are able to offer large quantities, and – for various reasons – there is little interest from traditional export destinations. West Africa, and Nigeria particular, remains in the doldrums due to the usual financial and logistical problems. Refiners in the United States currently hold the advantage to supply the few existing buyers looking to import to Apapa port in Lagos. Demand from Conakry, Guinea, Abidjan, Cote d’Ivoire, and Tema, Ghana, continue to be covered by a well-known major loading most of the cargoes out of Rotterdam and Fawley, United Kingdom, but always with the option to load out of Augusta, Italy.

Prices for Group I trade within Europe to have stabilized, further inhibiting exports. Instances where some producers could have sufficient surplus quantities to offer for export sales remain remote, even with a downturn in activity in the domestic markets during August. September may bring some expectations for some export cargoes, but with a full month to wait, anything could happen.

The Group I base oil premium to diesel has fallen to its lowest level for some years discouraging refiners from producing larger quantities of Group I base oils. Rising crude and feedstock prices could create upward pressure on base oil values, but this will only be seen in the export market if and when larger quantities become available, and there will have to be destinations ready to receive cargoes.

Export prices are listed here for comparison purposes only, estimated at between $800/t and $855/t for solvent neutral 150, at $920/t-$985/t for SN500 and at $1,100/t-$1,175/t for bright stock.

News from the Livorno, Italy, refinery continues to be confusing, with some reports that base oil production could be restarting imminently, but with other information that October will be the earliest for production and availability to return.

Prices for Group I sales in Europe have been stable and most suppliers are trying to roll over July prices into August. August will be exceptionally quiet, but a few deals for larger quantities were done late on in July. The lack of demand makes it difficult for sellers to impose markups, but raw material costs are fundamental to base oil pricing, and producers will not want to see margins squeezed further.

The Mol refinery in Hungary is now closed for a maintenance turnaround lasting around thirty days, although there have been some reports that this could be cut to around twenty days if all goes smoothly.

Demand will remain weak during August month, but finished lubricant consumption could rebound in September, which would bring a welcomed boost to base oil buying. Demand is forecast to pick up towards the end of Q3 – a prediction hinging on expectations that inflation will start to fall in major economies.

August prices for Group I sales within Europe are unchanged at around €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 United States dollar held steady the past week, as it posted Monday at $1.10245. The hypothetical price differential between Group I sales within Europe and nominal export prices is unchanged at €95/t-€145/t, exports being lower.

Group II prices around Europe are steady, and with crude and feedstock prices rising, the pressure from buyers to lower prices for August and beyond appears to have subsided. Again, activity will be muted over the next four weeks.  Some buyers were keen to purchase quantities of Group II base stocks last week, but demand will be weaker over the next few weeks until blenders come back from their summer break.

One importer of U.S. Group II continues to offer numbers which are deemed to be lower than the market has seen so far. The reasoning behind these moves may simply be that surplus material is amassing in the U.S., and rather than hold long inventories, the choice has been made to promote sales in Europe. 

Other established sellers have refused to follow suit, citing rising raw material costs. Prices indicated for prompt delivery or pick-up on an FCA basis ex Rotterdam, are $950/t for 100 neutral, $920/t for 220N and $1,000/t for 600N. Otherwise Group II prices are holding steady at €945/t-€1,100/t ($1,040/t-$1,210/t) for 100N, 150N and 220N and at €1,275/t-€1,325/t ($1,400/t-$1,460/t) for 600N.

The lightest light-viscosity grades, 100N and 150N, are typically priced higher than 220N due to the popularity and general usage of the former in Europe. These prices apply to a wide range of Group II base oils from European, U.S., Asia-Pacific and Red Sea sources, imported in bulk and in flexi-tanks.

Group III prices continue to react to a growing oversupply. Sellers and distributors are hoping the market will calm in August after some frantic weeks when moving stock out of tank became the priority for many participants. Sales have been dipping as more and more large blending operations adjust formulations to prioritize the use of Group II with additional additive packs, thus avoiding having to use large quantities of Group III.

With the current average price differential at around €450/t-€550/t, the margin advantage becomes obvious.  Blenders cannot avoid using Group III base oils altogether, but the combined effect of a low demand for finished products and the switch away to Group II has tilted the scales into a market where there is now surplus material and more cargoes are due to arrive during August and September.  

A large cargo of around 24,000 tons of gas-to-liquids Group III+ base oil is bound for the European market. Up until now, these grades have been contained in the Shell system and have not been resold on a direct basis. Smaller quantities have recently been fed into Europe, so it is not clear how the large cargo will be handled.

Prices for Group III oils with partial slates of finished lubricant approvals or with no approvals are reduced this week to €1,500/t-€1,555/t for 4 and 6 centiStoke grades, while 8 cSt is generally at €1,495/t-€1,545/t, all on an FCA basis ex Antwerp-Rotterdam-Amsterdam or Northwestern Europe.

Group III oils from the Cartagena refinery in Spain, the only ones holding a full slate of approvals including Volkswagen’s VW 504/507 specification are now at €1,895/t-€1,955/t for 4 and 6 cSt, while the small quantity of fully approved 8 cSt re sold in Europe are priced at €1,875/t-€1,900/t, all on an FCA basis ex hubs in Antwerp-Rotterdam-Amsterdam, Northwestern Europe and Spain.

Baltic and Black Seas

In line with proposals to alter Baltic reporting, news is now confined to base oil shipments from Svetly and Riga and if known, the potential destinations for these cargoes. This week there is news that two large parcels at 10,000-12,000 tons are being assessed for delivery into Gebze in Turkey. The exact timing of these cargoes is not known, as they are only identified as shipping inquiries. Dates will be subject to suitable vessels being chartered, and the size and composition of the cargoes may alter, depending on size and availability of vessels to load. There may be difficulties in finding tonnage to ship these parcels, since Lukoil are limited to non-European Union and other allied flagged vessels, leaving only Turkish or Russian flagged ships as possibilities.

The corollary activities are reporting a number of cargoes moving into the Baltic with base oils from alternative sources in mainland Europe and beyond. Two cargoes are discharging in Klaipeda that have been identified – one carrying a quantity of rerefined base oils from Kalundborg, and another parcel with Group I grades loading out of a northwestern French port, with around 3,700 tons of material on board. There have been reports of deliveries of Group III base stocks in flexies going into Lithuanian and Latvian ports for onward delivery to blenders in those countries.

The Lotos/PK Orlen tender for 4,000 tons of Group I base oils out of Gdansk has been awarded, but the beneficiary of this cargo is not identified as yet. The offer was for 2,000 tons of SN 150 and 2,000 tons of SN 500, and the quantity is believed to have been loaded in the last few days. Prices are heard for the SN 150 at $840/t and for the quantity of SN 500 at $935/t.

Turkey has gone exceptionally quiet, with only Russian SN 150 and SN 500 imported into this market.

Russian base oils being imported into Turkey have delivered prices indicated at around $855/t for quantities of SN 500, with SN 150 levels at around $840/t, all basis CFR Turkish ports. Although a number of attempts have been made to deliver cargoes from the Baltic to Gebze, this operation has been both difficult and expensive from the freight angle. Hence, most of the imported Group I grades come in from Volgograd refinery, but some supplies have been routed by train from Perm refinery in the north and have been then transferred to delivery across the Black Sea. This operation may also be less than economic to undertake.

The Algerian cargo that was purchased by Turkish traders and did not have Regulation for Registration, Evaluation, Authorization and Restriction of Chemicals accreditation has mysteriously fallen off the radar and may have been discharged, awaiting REACH approval. How this can be handled is a complete unknown, since it is believed that unless base oils are previously approved under REACH, regulations they cannot be used under any circumstances.

The 6,000-ton cargo comprised of three Group I grades is thought to have discharged in Gebze, with quantities noted as 3,000 tons of SN 500, 2,500 tons of SN 150 and 500 tons of bright stock 150. If the cargo was discharged, then CIF-delivered prices for the neutrals were SN 150 at $875/t and SN 500 at $995/t.

Tupras from Izmir refinery continues to sell all production as exports, rather than try to sell the production to local buyers on a truck-by-truck basis. Reports are that local blenders cannot afford the high prices being demanded by Tupras having aligned their local selling prices – converted into Turkish lira from dollars – to a certain well-known base oil pricing report. The numbers were aligned with the domestic high prices contained in this report.

However, reported prices for the sale tender were much lower with SN 150 at $850/t, SN 500 at $945/t and bright stock at $1,200/t, basis FOB Marmaras.

Mediterranean sources for Group I base oils were limited to only ExxonMobil out of Sicily or Valencia. ExxonMobil has a 4,400-ton cargo of Group I grades discharging in Alexandria and Gebze, so they are able to supply part-cargo into the Turkish market. Prices for this parcel are not known but will be priced higher than any Russian barrels going into the Turkish market. Latest delivered price levels are heard at around $985/t for SN 150, with SN 500 at around $1,055/t basis CIF Gebze. Russian barrels are priced around $200/t lower.

Group II ex-tank prices remain unchanged, 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 agents or distributors on an FCA basis, or on a truck delivered basis, are priced lower this week and are now assessed at €1,695/t-€1,755/t FCA. These prices have come under pressure with a great deal of material now in tank for resale.   

Fully-approved Group III grades delivered into Gemlik from Cartagena refinery are priced lower and are now considered to be at €2,025/t-€2,060/t FCA. Small cargoes at €1,200/t-€1,800/t cover this requirement.

Middle East

Red Sea shipping news has a number of cargoes preparing to load out of Yanbu and Jeddah for the west coast of India and the United Arab Emirates with what appears to be a return to large parcels of up to 18,000 tons per cargo, possibly made up of both Group I and Group II base oil grades. The U.A.E. cargo will call at Hamriyah, in addition to Fujairah and Ras Al Khaimah. Another smaller cargo of around 10,000 tons will discharge partly into Mumbai anchorage and also into Karachi in Pakistan. An incoming cargo is 5,000 tons of Group III grades moving from Onsan in South Korea to Yanbu. This supply for local blending is made from S-Oil, a company partly owned by Saudi Aramco, as is Luberef in Saudi Arabia.

In Middle East Gulf regions, activity has waned due to the high temperatures and this being the time of year when most expats head home for cooler weather to Europe and India in the main. Most decision makers will only return to Middle East Gulf sites after the hot summer period.

Trade does continue, however, with a number of cargoes arriving from Saudi Arabia and another parcel of 5,000 tons from Limas terminal in Turkey. The latter will be comprised mainly of Russian SN 500, with a smaller quantity of SN 150, and will discharge in Hamriyah port sometime during second half of August. The quantities of base oils moving from Yanbu will be Group II grades, 

The large Group I and Group II cargo from the Red Sea will discharge in Fujairah, then Ras Al Khaimah and finally in Hamriyah. A following cargo of around 12,000 tons will load from Yanbu and will discharge during August in Jebel Ali. This cargo will be made up of Group II grades contributing to the ever larger U.A.E. supply of Group II base oils.

Lukoil continue to send Russian base oils into the U.A.E., which are being used in third party toll blending operations for lower quality finished lubricants, which are then exported to East Africa and other Middle East Gulf locations.

Group I base oil cargoes are constantly arriving into the U.A.E. from Saudi Arabia, Russia, Thailand and India, but with practically no Iranian base oils now imported into the U.A.E., other than rubber process oil that is bridged and stored in Ras Al Khaimah before being sent to South Korean receivers in 3,000-ton lots. This has become a regular supply, with rubber process oil used in the tire manufacturing industry. 

The Russian export cargoes appear to have been whittled down to one parcel. However, it may be that shipping problems are limiting the ability of the sellers to load these cargoes on a CIF basis. Receivers in the U.A.E. are not pleased to have letters of credit opened and remaining open for some time prior to sellers finding suitable shipping to carry these cargoes. There are still shipping enquiries for vessels to take larger parcels from Svetly terminal in Kaliningrad, but these parcels are firm, yet are only shipping inquiries.

Accessing suitable vessels that have to be approved by receivers to take these cargoes remains a problem. Contracts and prices have been finalized and letters of credit opened, but there remain considerable delays from no vessels being located to load the contracted quantities. Some of the receivers in the U.A.E. requested that they buy Russian base oils on an “open credit” basis, without having to open letters of credit that can expire due to delays. It is believed that Russian sellers have considered this option and have gone along with this process.

Group III cargoes continue to be delivered into India, China, the United States and Europe markets, with various charterers who are also distributors in the receiving countries, fixing vessels to load out of Sitra and Al Ruwais. The large cargo of up to 24,000 tons loaded and sailed from Ras Laffan in Qatar for Shell. This cargo sailed west, possibly to Europe, where the Group III market anticipates that this cargo will go into general distribution, rather than be retained within the Shell system. Part of the cargo will be used by Shell affiliates for internal blending operations.

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 taken lower, with selling levels coming off in the main markets such as Europe and U.S. Netback returns are assessed at $1,565/t-$1,625/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 currently 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 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 sources confirmed that the large base oil cargo has loaded or is currently loading out of Rotterdam and Fawley. The vessel will supply into Durban and then additionally, quantities into Kenya and Tanzania. The vessel will not call at Conakry and Abidjan – these supplies will be conducted using a different vessel and will include 5,000 tons to cover the Ghana tender going into Tema. It is thought that draft restrictions in the West African port make a “milk run” delivery difficult, while receivers in South and East Africa require the full cargo quantity.

With this report’s source for prime information in a resort in Jamaica, Nigerian base oil trade is rather slow. Add on the rainy season and the Nigerian elections with all the ructions and disputes which those caused, and business is not at its best.

There are inquiries for base oil cargoes to arrive into Apapa during August, but progress has been slow with the usual hold-ups and problems. A number of traders are looking to source material from various supply points around the globe, with some more potentially suitable than others. Red Sea supplies out of Yanbu and Jeddah are once again on the table, as are Russian supplies out of the Baltic. The favorite still, however, is a co-loading out of the U.S. Gulf Coast and U.S. Atlantic Coast. Depending on available vessels, one trader will try to put together a cargo at 15,000-20,000 tons comprised of SN 150, SN 500 and SN 900 base oils.

There are the usual problems and delays with multiple buyers and various types of payment instruments and methods. Nigerian banks remain a disaster, with the country still short of U.S. dollars. Letters of credit cannot be issued, and there are also problems getting the importation certification. That can cause problems at discharge, with vessels incurring detention and demurrage, which will never be paid to suppliers.

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 due to the level of competition in the Nigerian market. Some offers contain prices that are clearly unachievable, and which misguide buyers and cause delays and deliberations to proceedings. FOB numbers may have been lower, but recent days may suggest otherwise, with crude and feedstock prices moving higher.

However, CFR prices are still 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.

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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