EMEA Base Oil Price Report


Base oil demand in Europe, the Middle East and Africa has undergone a mini-spike that certainly was not forecast for August. Demand for API Group I and II base oils has turned positive and may continue to increase as more personnel return to work following the summer break.

The month of August had been marked down as the nadir for base oil purchases, but crude and feedstock costs have undergone a spike, amplified by announcements of September production cuts from Saudi Arabia and Russia.

These threats to shorten up the crude market pushed prices above $88 per barrel for dated deliveries of Brent crude, but values then plateaued, though it is unclear whether because of slack demand or because of other OPEC+ countries not following in line with the Saudis and Moscow. The impact of production cuts should become clearer in September.

Crude prices are higher than in July, and are forecast to remain around current levels for the next few weeks. The increases have led to higher feedstock prices, in particular for vacuum gas oil, which usually affects raw material costs for the production of base oils.

Buyers reacted quickly, leading to a flurry of Group I and Group II sales in major markets such as the United Kingdom, France, Spain and Germany. Purchases also ticked up in other countries such as the Netherlands, Poland and Italy.

Group III base oils remain a market unto their own following price decreases across the board in Europe and neighboring countries. Demand is relatively weak, in part because number of large blenders made moves to optimize their use of Group II in order to reduce use of Group III.

Dated deliveries of Brent are at $85.30/bbl for October front month settlement, while West Texas Intermediate at $81.70/bbl, still for September front month. The crack between these two benchmarks is around $3.5/bbl, less than usual spread of $5. 

Low-sulfur gas oil prices rose to $935 per metric ton last week but have now retreated to $916/t, for September front month. All of these prices were obtained from London ICE trading late Aug. 21.


Group I exports from Europe remain a distant memory as most producers in the region still lack surpluses that would be needed to assemble cargoes for markets like Nigeria and United Arab Emirates. European Group I suppliers to focusing on domestic and regional markets, which are experiencing a resurgence in demand.

A few large slugs of Group I base stocks are being moved by major producers, but these are generally bound for affiliate operations or are intended to restock hubs around the globe. Such cargoes are being sent to South and East Africa, whilst one major constantly supplies third parties in regions such as Guinea, Cote d’Ivoire and Ghana.

Information about the Livorno, Italy, base oil plant that underwent a recent shutdown for maintenance continues to be unclear. Some reports indicate that sales will resume in October, while other say September or November. It is also possible that the refinery is done making base oil since it is due to transition to biofuels production.

Once again, prices for Group I exports from Europe are purely notional and are quoted here for comparison purposes. Those values are up this week to between $925/t and $975/t for solvent neutral 150 and to $1,045/t-$1,090/t for SN500 and SN600. Bright stock is unchanged at $1,195/t-$1,265/t.

For sales within Europe, Group I suppliers have announced hikes of €40/t-€75/t – in some cases with immediate effect and in others beginning from Sept. 1. Buyers are not able to take more than contracted quantities, so there is no regional spot market at this time.

Demand is increasing, but sellers cannot supply additional barrels since availabilities are limited and production barely meets demand.

Mol was scheduled to complete a maintenance turnaround at its refinery in Szazhalombatta, Hungary, by Aug. 26, but there are reports that it may have finished early. New posted prices – which are given in United States dollars – are very high, but sales being transacted are conducted in euros and do not reflect the posted prices.

Current August prices for Group I sales within Europe have risen to €975/t-€1,045/t for SN150, €1,075/t-€1,155/t for SN500 and €1,275/t-€1,325/t for bright stock.

The euro’s exchange rate against the dollar dipped the past week to $1.08838. As a result, the price differential between Group I sales within the region and hypothetical exports is unchanged at €135/t-€200/t, exports being lower.

Group II prices are starting to rise, although not on quite the same scale as Group l. Values have been rising in markets such as the U.S. and the Asia-Pacific region, so any material being imported from those regions are up. The very low levels seen a few weeks back from U.S. exporters to Europe have disappeared and been replaced by prices more in line with the European scene.

Suppliers have announced markups that will take effect immediately, but there may still be some upward pressure from feedstock costs. If Group III prices stabilize, the danger of Group II numbers coming close to Group III will fade, eliminating a factor for downward pressure.

Demand this month is trending positive as buyers return from holidays in purchase mode. Many are wary of the increase in feedstock costs and potential impact on base oil prices.

Group II prices are up this week to €1,085/t-€1,125/t ($1,180/t-$1,225/t) for 100 neutral, 150N and 220N and to €1,295/t-€1,350/t ($1,410/t-$1,470/t) for 600N. 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. Normally 100N and 150N are priced higher than 220N.  

Group III prices in Europe showed some sign of stabilizing the past week as low levels offered for some imports at the lower end of the category’s specification range did not fall further. They remained at €1,400/t for 4 centiStoke and €1,300/t for 8 cSt, which is still lower than most fluids in the segment.

General prices for Group III oils with partial slates of finished lubricant approvals or without approvals are also unchanged this week at €1,485/t-€1,575/t for 4 cst, €1,510/t-€1,595/t for 6 cSt and €1,475/t-€1,545/t for 8 cSt, all on an FCA basis ex Antwerp-Rotterdam-Amsterdam or Northwestern Europe.

Values for Group III oils from Cartagena, Spain, with full slates of approvals are also unchanged at €1,875/t-€1,925/t for 4 and 6 cSt and €1,860/t-€1,885/t for the small quantities of 8 cSt sold within the region, all on an FCA basis ex hubs in Antwerp-Rotterdam-Amsterdam, Northwestern Europe and Spain.

Baltic and Black Seas

Baltic reports contain shipping inquiries for a number of cargoes to load out of Svetly in Kaliningrad, but every week these inquiries remain uncovered, either from a chartering front or from a lack of receivers in Turkey. Lukoil is looking again at receivers in Nigeria and Brazil, with a few inquiries for SN 500 coming out of that market. Normally these requirements would be covered from United States sources, but there may be opportunities for Lukoil to place cargoes into Brazil because there are no restrictions on Russian material entering that market.

The problem will be obtaining a suitable vessel to charter to carry the cargo, and how flexible will receivers be in that market, not knowing if, or when, a cargo can be arranged. 

Base oils offered out of Gdansk from Lotos and PK Orlen as a sale tender remain unsold following unsuccessful bids from traders looking to take this material into either the U.K. or northwest Europe. Reported bid prices were too low at levels of $840/t for SN150, SN 500 at $940/t and around $1,040/t for bright stock, all on an FOB basis. These low prices are reckoned to be around $150 out on what would be acceptable numbers for this quantity. The cargo may now have increased in size due to more product becoming available, which may make it attractive for deep-sea destinations such as West Africa.

The tender was for 1,500 tons of SN 150, 2,000 tons of SN 500 and 500 tons of bright stock, but relative quantities could be increased. With Group I prices rising, considered bid offers will now have to be around $965/t for SN150, SN 500 at $1,075/t, and bright stock at $1,255/t. All are basis FOB Gdansk.

Turkish base oil markets remain quiet even for August. After contacting a number of sources in that country, it would appear that problems with the banking system and government interference are causing economic problems for operators, such as blenders and traders, who cannot access U.S dollars to open letters of credit.

Russian SN 150 and SN 500 imports are imported on open credit terms, although it is believed that there are forms of guarantee to sellers, such as Lukoil, from the Turkish government. Just how this process works is not known, but Russian material is still forming the bulk of base oil imports that are coming on to the Turkish market. This arrangement may be a government-to-government deal.

Russian base oil prices moved upwards, but some sources suggest that they were able to buy at prices below $800/t for SN 500. Evidence now suggests that prices have moved upwards to around $900/t-$925/t, delivered. These levels are still much lower than Mediterranean offers from Greece or Italy.

Delivered prices are now indicated at $920/t for SN 500, with SN 150 at around $895/t, CFR/CIF Turkish ports. Confirmation of these prices is becoming increasingly difficult because no customs declarations can be accessed from shipping agents or Turkish state offices.

Tupras appear to have problems in base oil production again, with no export tenders announced for August or September. The exact nature of the problem is not disclosed by the refinery at Izmir, so it becomes a case of wait and see what information comes out. The last tender was a 2,000-ton parcel of bright stock, The successful price offered was confirmed at $1,200/t FOB Aliaga or Gebze.

Mediterranean sources for Group I base oils would be from Greek sources out of Aghio, but they have reported no availabilities at this time, while concentrating on selling into the Greek domestic market. ExxonMobil is potentially a supplier out of Augusta in Sicily. ExxonMobil offered a parcel of Group I grades but following a €60/t increase across all Group I grades in Europe, this offer will be too expensive for Turkish receivers to entertain.

CIF prices may now be pitched at around $1,025/t for SN 150, with SN 500 around $1,100/t basis CIF Gebze. Russian barrels remain around $200/t lower.

Group II ex-tank prices are maintained, but may change towards the end of the month, Levels are established at around €1,050/t-€1,075/t for the three lower vis products – 100N, 150N and 220N – and 600N at €1,240/t-€1,265/t. Supplies of Group II grades may be sourced from the Red Sea, the United States, South Korea and Rotterdam.

Partly-approved Group III base oils resold by agents or distributors on an FCA basis, or on a truck-delivered basis, are maintained and are presently assessed at €1,625/t-€1,695/t FCA.

Smaller quantities of fully-approved Group III grades delivered into Gemlik from Cartagena refinery are also maintained and are put at €1,995/t-€2,025/t FCA. Cargoes of 800-1,800 tons cover this requirement for a few blenders that require fully-approved Group III base oils.

Middle East

Large cargoes of Group I and Group II base oils are confirmed to be loading out of Luberef from Yanbu and Jeddah, and they are destined for various locations, such as Mumbai anchorage, United Arab Emirates ports and South Africa. There are also smaller parcels arranged for Egypt, thought to be bright stock from Yanbu, covering the Egyptian General Petroleum Corp. requirements and also a Jordanian cargo of around 4,800 tons that will discharge in Aqaba. Most of these shipments will load towards the end of August, with some cargoes penned in for early September.

Middle East Gulf markets are quiet and relatively subdued, although there are a number of inquiries on the market for traders to offer cargoes of Group I and Group II base stocks, perhaps with buyers in the U.A.E. trying to purchase, prior to prices starting to move upwards. There are also inquiries for material to load out of Thailand, although these cargoes tend to be smaller and go to ports such as Ras al Khaimah and Hamriyah. These cargoes are bought by U.A.E. traders on an FOB basis from Thai Lube in Sriracha.

A large Group I and Group II cargo from Luberef will discharge in Fujairah, and then in Hamriyah. The cargo of around 12,000 tons appears to have now loaded from Yanbu, and is en route to U.A.E. receivers, discharging during the first half of September in Jebel Ali.

Russian base oils supplied from Limas terminal in Turkey are in evidence, coming into Hamriyah, where these base oils will be used in toll blending operations for third parties based in the U.A.E. or in some cases, domiciled outside the region in Europe and East Africa These blended lubes are also supplied to distributors and agents in other Middle East Gulf locations, such as Kuwait and Iran.

The Russian cargoes remain problematic. It is believed that supplies are offered on an “open credit” basis, without a letter of credit, with an added disclaimer from receivers regarding quality and quantities. Importation of these base oils is accompanied by a full set of shipping documents, including certificate of origin, bills of lading and quantity and quality certification from third party inspectors at the load port. U.A.E. customs require importation documentation to accompany base oils coming in to the U.A.E.

Group III export cargoes from Middle East Gulf sources are loading and are being delivered regularly into India, China, the U.S. and Europe. Questions were raised regarding cargoes moving out of Sitra and Al Ruwais that were destined for the European market. Producers were able to make better margins on material going into the Indian and Chinese markets because with erosion on prices in Europe, returns were becoming unacceptable. This dilemma appears to have been solved, with prices in the European markets starting to bottom-out and stabilize, making returns more predictable and acceptable. Adnoc and Bapco, through their respective agents and distributors, commented that they are committed to the European Group III market.

Netbacks for partly-approved base oils loading out of Al Ruwais and Sitra held firm, with selling levels stabilizing in some of the main markets. Netback returns are assessed at $1,470/t-$1,535/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 resellers 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 $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.


A shipping agency source in Durban, South Africa suggested that a further large cargo will arrive into Durban sometime around the end of October. This cargo may still be in the planning stages, but going by history, a vessel will load up to 18,000 tons from Rotterdam and Fawley before proceeding to South Africa. Sometimes these cargoes are also used to supply receivers in Conakry in Guinea, Abidjan in Cote d’Ivoire and Tema in Ghana. A current cargo for the three West African ports is currently underway and will discharge during September.

Nigeria is in the last part of the rainy season, and with that reprieve, base oil business may start to get back to moving again. Continuing problems beset Nigeria, with the banking system and government in total denial over dollar currency access. Many players in Lagos are sitting back, at the moment, with a market that has been well supplied from past cargoes and which has been slow, with dull demand during the rainy season that lasted for the past two to three months.

The Singapore cargo of around 8,700 tons is loading and will discharge into Apapa during September or perhaps early October. The freight rate for this shipment is extremely high, compared to U.S. or European rates, with a rate of almost $200/t. FOB prices will have to be extremely competitive to make any sense going into the Nigerian market.

Assuming regular margins and demurrage penalties, FOB prices for SN 150 will have to be in the order of $825/t, for the SN 500 the FOB price will have to be around $850/t and SN 900 will be around $900/t. The CFR offer for this cargo must have prices higher than the latest arrivals, with FOB levels plus freight and margins taking number to levels around $1,100/t for SN 150, $1,160/t for the SN 500 and SN 900 at around $1,200/t. These levels are based on the FOB Singapore prices, freight rate and margins, and are not taking into account any demurrage, detention or other ancillary costs.

A major problem in Nigeria is the exchange rate of the naira to the U.S. dollar, which has now gone above 900N/USD. The exchange rate is leading to higher prices for landed products, with some receivers having to pay traders in naira and then effecting exchange on the black market. Additionally there is confirmation that Nigerian authorities imposed a 1% import duty on the value of the cargo imported. This is providing further difficulties to financing cargoes given the problems with payments and handling of cash without letters of credit.

Confirmation of numbers for a recent cargo had CFR levels of $1,020/t for SN 150, SN 500 at $1,070/t, and SN 900 at $1,150/t.

Group I prices are rising, but many Nigerian buyers seem to be unworried about obtaining new cargoes. Crude and feedstock prices moved higher, and now Group I base oil prices are rising, even with cargoes loading out of Asia-Pacific and the U.S. prices starting to firm now.

CFR offered prices remain indicated in the following ranges: SN 150 at $1,050/t-$1,095/t, SN 500 at $1,100/t-$1,175/t, and SN 900 at $1,175/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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Historic and current base oil pricing data are available for purchase in Excel format.

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