EMEA Base Oil Price Report


As base oil markets in Europe, the Middle East and Africa return to almost normal working conditions, commentators are forecasting increasing demand for lubricants – and hence base oils – during the third quarter of the year.

These predictions are based on expectations that finished lubricant demand – and hence base oil demand – will increase during the third quarter as businesses kick-start operations going toward the end of 2023.

However, interest rates remain higher than at any time in the last thirty years and inflation is being stoked yet again by rising crude and fuels prices, which will affect transportation expenses and the underlying cost of goods. Most economists expect inflation to temporarily rise again in September before drifting lower toward the end of the year.

Prices have risen for API Group I and II base oils while falling for Group III oils over the past couple months, but values for all three grades seem steady at the moment.

With the base oil premium to diesel at a new low, refiners are feeling pressure to maximize fuels output, particularly distillates, where demand is positive thanks to recovery in the aviation and transportation sectors. Since demand and supply of base oils are finely balanced, such a scenario could tip base oil markets into shortages.

That, of course, could cause upward pressure on prices.

In addition, the threat of crude production cutbacks looms heavily now, with Saudi Arabia and Russia announcing dramatic production cuts starting from Sept. 1. In the past week prices rose to levels not seen since November last year.

Crude oil prices are showing higher at the beginning of this week, and forecasts are that they may have some way to go before steadying. OPEC+ members appear resolved that production should be limited, but many countries in the group rely on crude revenues to prop up ailing economies.

The Russian economy is in a strange place at the moment as inflation mounts and the rouble’s value falls. It is surprising, then, to see the Kremlin reduce crude exports, which are a lifeline to the nation’s economy.

Dated deliveries of Brent rose $4 to $88.85 per barrel this week, now for November front month settlement. West Texas Intermediate climbed around $6 to $85.95/bbl, still for October front month. Low-sulfur gas oil prices bucked that trend, dipping around $30 to $920 per metric ton, still for September front month. All of these prices were obtained from London ICE trading late Sept. 4.


European exports of Group I base oils are not expected to resume anytime soon. As refiners optimize fuels production, availabilities of Group I base stocks may tighten, preventing assembly of the large quantities typically involved in exports. Group I output in Europe will do well to cover demand within the region. With key producers such as the Eni plant in Livorno, Italy, still down, shortages could develop in certain regions.

Demand is still positive around the Mediterranean, leaving suppliers with little or no material for exports – even small quantities for locations such as Morocco and Turkey.

Large cargo quantities of European Group I are being moved, but these parcels are either inter-affiliate shipments to supply hubs in other regions or are covering contracts in areas such as South Africa or East and West Africa. Internal shipments are also being sent to Singapore and the Middle East Gulf, but scant information about them is available.

The latest news on Livorno is that base oil production will resume in October, leading to availability of some grades in November. It is rumored that a parcel of bright stock was made available for sale, but whether this quantity came from existing stocks or inventory is not clear. Crude cargoes are expected to begin arriving shortly.

Export prices are hypothetical and shown here only for comparison purposes. They are unchanged this week at between $950 per ton and $1,000/t for solvent neutral 150, $1,065/t-$1,100/t for SN500 or SN600 and $1,245/t-$1,300/t for bright stock, all on an FOB basis.

Prices for Group I sales within Europe have been raised from Sept. 1. Producers cited increased costs for feedstocks, wages and energy. Demand is relatively positive, and the supply-demand situation is basically in balance. There are few instances of additional barrels being available, but some parties said they are unable to supply additional large quantities.

Prices for Group I sales within the region are pitched at €1,055/t-€1,120/t for SN150, while SN500 is assessed at €1,095/t-€1,200/t and bright stock at €1,265/t-€1,320/t.

The euro’s exchange rate against the dollar dropped a bit to $1.07895 on Sept. 4. The differential between hypothetical export prices and values for Group I sales within Europe is unchanged at €75/t-€140/t, exports being lower.

Group II base oil sold in Europe face upward pressure due to price hikes in areas such as Asia-Pacific and the United States and feedstock costs, which have risen more than 15% since July. Demand remains positive as buyers try to stay ahead of potential markups, and suppliers are allocating.

Group II values are unchanged this week at €1,055/t-€1,125/t ($1,140/t-$1,215/t) for 100 neutral, 150N and 220N and at €1,220/t-€1,275/t ($1,315/t-$1,375/t) for 600N. These prices apply to a wide range of grades from Europe, the U.S., Asia-Pacific and Red Sea sources, imported in bulk and flexi-tanks. Typically 100N and 150N are typically priced higher than 220N due to the generally higher usage in Europe of the two lighter grades.

Group III prices are steady, facing some upward pressure from rising feedstock costs but also downward pressure from the level of availabilities, which are flush and not far from over-supply. Demand in this segment is returning in major markets such as China and India, hence global availabilities may be in balance with demand going forward.

European prices for Group III grades with partial slates of finished lubricant approvals or without approvals are unchanged so far this month, with offers for September and October heard at €1,485/t-€1,575/t for 4 centiStoke oils and at €1,475/t-€1,545/t for 8 cSt, both on an FCA basis ex Antwerp-Rotterdam-Amsterdam or Northwestern Europe. Six cSt prices are assessed at €1,510/t-€1,595/t.

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

Baltic and Black Seas

The Baltic region has almost completely changed as a marketplace, since with the European Union and allied ban on Russian exports, few cargoes of these grades are seen moving out of Riga and Svetly. The picture has changed to cargoes coming into Baltic receivers, replacing the requirements that were covered by supplies from Russian refineries and from shore storage in ports such as Rig, Klaipeda and Liepaja. Storage terminals in those ports where cargoes were loaded for export sales have turned around and are now used by local and international traders taking base oils into the Baltic to cover requirements in Estonia, Latvia and Lithuania.

Where once only Group I and a smattering of Group III base oil were used by blenders in the Baltic states, now quantities of Group I, Group II and Group III from alternative sources – other than from Tatneft in Russia – are imported. Quantities of rerefined base stocks from Avista in Kalundborg also play a part in the new supply scene, which has evolved since the EU ban came into force last February.

The cargo of around 10,000 tons reported moving from Kaliningrad to Singapore has not been confirmed, with the firm fixing of a vessel to carry this parcel. Shipping reports still carry this cargo as an inquiry, but a vessel may have been fixed during the last few days and may load promptly for Singapore. Other inquiries continue to be quoted for cargoes to load for Gebze in Turkey, but again these appear to be “ghost” cargoes that never actually become real. A Turkish shipping broker was keen to point out that they send regular updates of available Turkish-flagged vessels to Lukoil, to offer options for shipping cargoes out of Kaliningrad. It is still rumored that Svetly terminal may cease operations, but no confirmation either way can be obtained from relevant parties.

Base oils offered out of Gdansk as a sale tender remain in-tank and unsold, further to the unsuccessful low bids from traders. Lotos and PK Orlen have put the deal on hold at the moment, perhaps waiting to see where Group I prices are going before starting the tender process again.

Last bid prices were considered too low at $840/t for SN150, SN 500 at $940/t and the offer for bright stock at $1,040/t FOB. Prices are now reckoned to be around $150/t-$200/t higher than those offered. With prices rising bid offers would now have to be around $985/t for SN150, SN 500 at $1,085/t, and bright stock at $1,295/t FOB Gdansk.

Turkey remains quiet, mainly due to the state of the economy where inflation is running amok, interest rates have just been increased to 26% with further hikes of up to 30% to come before the end of the year, and given this backdrop, the government and Central Bank have outlawed traders being able to lay hands on dollars with which to open letters of credit allowing them to trade.

The rumored return to work this week has just not happened. Some blenders are commenting that they may have to lay staff off, with no buyers for finished lubricants to be found anywhere, particularly at the prices blenders are having to charge to make a return.

Russian base stocks are still the backbone for the lubricant blending industry in Turkey, with the latest prices heard last week being nothing short of unbelievable. Russian barrels of SN 150 have been confirmed CIF at $780/t, while quantities of SN 500 are confirmed at $820/t.

It was thought that prices edged up towards the $900/t mark, but this is not the case, with sellers desperate to keep Turkey open as a “depository” for Russian base oils, which are mainly taken out of Volgograd refinery. Some material has been transported by rail south from Perm refinery to increase chances of sellers being able to place these barrels either in the Turkish market or selling into receivers in the U.A.E.    

Mediterranean sources have given up on supplying mainstream barrels of Group I base oils into the Turkish market because competing against the low Russian prices is impossible, with estimated delivered prices for SN 500 having to be around $1,125/t CIF Gebze, some $300/t higher than the Russian equivalent.

CIF prices from Mediterranean suppliers would have to be reckoned to be pitched at around $1,045/t for SN 150, with SN 500 around $1,125/t basis CIF Gebze. 

It is reported that Tupras has availabilities of all five Group I grades, but having aligned prices to the highs of a well-known base oil report, there are no buyers able to afford these supplies, even if they are priced in Turkish liras. It is imagined that eventually quantities will be offered in a sale tender out of Gebze or Aliaga and will be sold to the highest bidder that is able to lift the cargo on a prompt basis.

Group II ex-tank prices are maintained, having raised these numbers last week, with levels established at around €1,120/t-€1,155/t for the three lower vis products – 100N, 150N and 220N – and 600N at €1,320/t-€1,345/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 reassessed, with the 4 cSt grade from Tatneft priced at $1,400/t. Other suppliers, such as Adnoc, Petronas and Shell, using Bapco barrels have prices maintained, 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 at €1,995/t-€2,025/t FCA. Cargoes of 800-1,800 tons cover this requirement for the few blenders that require fully-approved Group III base oils.

Middle East

Group I and Group II base oils loaded out of Yanbu and Jeddah are supplying receivers in Mumbai anchorage and the United Arab Emirates, among other regular supplies into Egypt, Sudan and Jordan. A large cargo of around 19,000 tons will deliver firstly into Mumbai anchorage, then into Karachi, and finally into receivers in Hamriyah in the U.A.E. Group II offers into Turkey have been declined by buyers, stating that prices have soared and are no longer feasible to trade. This seems to be another impasse caused by Turkey’s financial problems.

Middle East Gulf markets are recovering, following the summer recess, and traders and blenders are reported to be back in action this week. Forecasts are that base oil business will pick up between now and the year-end due to an upswing in demand for lubricants. This increase in demand covers all sectors, industrial, automotive, process oils and specialty products, such as transformer and electrical oils.

Buyers issued a number of inquiries to local and international traders based in the United States and in Europe for quantities of Group I base oils in large quantities of up to 25,000 tons per cargo. These base oils may be difficult to acquire at the prices receivers are looking for, with FOB numbers increasing substantially in the U.S. and Far East markets. Russian barrels are again under offer for the regular receivers in Hamriyah and are offered out of Limas terminal in Turkey as a bridging point for supplies coming from the Baltic and Black Sea. It is easier to obtain vessels from the local Turkish market than loading material for the U.A.E. from Svetly terminal in Kaliningrad.

Prices heard for Russian base stocks were heard to be exceptionally low. Although not confirmed, they were heard from a reasonable source last week to be at $895/t for quantities of SN 150, and $935/t for SN 500. A cargo could be anything from 5,000 tons to 12,000 tons, depending on vessel availability and freight rate. 

The large Group I and Group II cargo from Luberef is discharging in Fujairah and Hamriyah. The cargo is around 12,000 tons and has loaded from Yanbu.

In addition to the material being imported into the U.A.E. from Yanbu, Group II cargoes were fixed from suppliers in South Korea. These cargoes will be based on a two-port discharge – part of the cargo going into Mumbai anchorage or Hazira, then the balance moving to U.A.E. receivers in Hamriyah or Jebel Ali.

Another 3,000-ton cargo of rubber process oil loaded from Ras Al Khaimah for receivers in Korea, this being the first parcel for some time, with trade getting back to normal. The source of this material is Iran, and quantities are gathered in small lots. They are stored in Ras Al Khaimah until around 3,000 tons is collected and then shipped to Ulsan.

Group III base oil exports from the three Middle East Gulf production centers loaded and are now being delivered into India, China, the U.S. and Europe. Cargoes are from the U.A.E., Qatar and Bahrain.

Netbacks for partly-approved base oils loading out of Al Ruwais and Sitra remain unchanged, with selling prices bottoming out in markets such as the U.S. and Europe. As yet no decisions have been made regarding clawing back increasing raw material costs.

Until prices change, netback returns will continue to be 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.

Netbacks for gas-to-liquids material coming out of Ras Laffan in Qatar are estimated to come in at around $1,550/t-$1,600/t, but these numbers are estimated based on prices from traders in Singapore and selling prices in heard Europe. The Group III+ base oils from this source were previously not for general distribution and were retained within the Shell system, presumably for internal blending. Additive packs were blended with these base oils to produce specialties that were then sold to contracted buyers. There appears to have been a change of policy, with these oils now found in the open market in Europe and Far East.

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.

Higher prices kicked in over the weekend, from Sept. 1, and are now assessed at $1,455/t-$1,485/t for the light vis grades 100N, 150N and 220N, with 600N at $1,585/t-$1,610/t. The high ends of the ranges refer to road tank wagon deliveries in the U.A.E. and Oman.


A Durban-based shipping agency source reconfirmed the large cargo loading out of Rotterdam and Fawley and is giving a new estimated time of arrival in Durban around Oct. 25. It is believed that a vessel was fixed and will load shortly at the first port.

Other cargoes from the same supplier are used to cover requirements in Conakry in Guinea, Abidjan in Cote d’Ivoire and Tema in Ghana. These are contracted supplies and are not spot cargoes.

The end of the rainy season came, but the future in Nigeria looks anything but bright. Financial and government-imposed red tape added to the economic woes, but receivers are certainly looking to traders to cover a number of large cargoes of base oils, perhaps involving up to a total of more than 100,000 tons over the next few months.

There would appear to be a modicum of panic around Lagos, with buyers realizing that they may have missed the boat in terms of getting lower cost base oils. Prices from all sources escalated over the past month, and even from U.S. Gulf and U.S. Atlantic Coast sources prices have risen by around $50/t-$70/t from the low levels seen in June and July.

Local problems persist in Nigeria, with the banking system and government unable to provide access to dollars to be able to open letters of credit to smooth the importation of base oils rather than traders having to use the black market to convert to dollars following receiving part or full payment for part-cargoes in naira.

The Singapore-sourced cargo of around 8,700 tons should have completed loading and is due to arrive in Apapa sometime later this month. The reported freight rate was reported as a lump sum that would equate to a rate of $197/t. FOB numbers must have been extremely competitive.

The CFR prices for this cargo are expected to have levels of around $1,100/t for SN 150, $1,160/t for the SN 500 and SN 900 at around $1,200/t.

The exchange rate of the naira to the US dollar has remained above 900N per U.S. dollar. This is leading to higher prices for delivered base oils, with some receivers paying traders in local naira before exchanging this currency into dollars on the black market. The Nigerian government will add to the problems by imposing a 1% import duty on the value of the cargo imported.

Confirmation of numbers for a recent cargo back in June had CFR levels of $1,020/t for SN 150, SN 500 at $1,070/t and SN 900 at $1,150/t. These prices will no longer apply to base oils coming into Nigeria since FOB prices rose, along with all the other financial elements that are being muddied by government and official red tape.

CFR offer prices are now indicated in the following ranges: SN 150 at $1,075/t-$1,100/t, SN 500 at $1,125/t-$1,175/t, with SN 900 at $1,195/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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