EMEA Base Oil Price Report


Fundamentals remain strong for base oils and base oil pricing, although crude oil and petroleum products have come off their recent highs, showing that the market is not a one-way trajectory.

With the recent Saudi and Russian production cutbacks, crude supplies will possibly tighten, offsetting any impacts from weakening demand and creating potential for cost hikes that could bite by the end of this year.

European, Middle Eastern and African base oil markets are taking time to adjust to the possibilities of higher crude costs, but they are adjusting as a number of global suppliers have announced price hikes in the United States, Europe and Asia-Pacific. With API Group I light and heavy neutrals across the globe trading at or near a discount to diesel, there is certainly upward pressure on prices for those base oils.

Refiners are posing a number of questions now as they face incentive to push more feedstocks into the distillate pool rather than produce surplus quantities of specialties such as base oil and bitumen. Russia’s announcement that it will cease diesel exports to existing receivers means diesel will become net short across a number of markets such as Turkey, India and the Middle East, forcing importers to find alternative sources – a difficult task given the tightness of that market.

The European Union and the United Kingdom have already banned all imports of hydrocarbon derivatives from Russia and are trying to balance stocks of distillates for the winter to come. The situation appears to be under control, although recent strikes have endangered some long-term supply contracts for diesel and jet fuel.

Fortunately, base oil demand across Europe, the Middle East and Africa is relatively muted due to lackluster demand for finished lubes, and there is little prospect for improvement before the end of the year. Forecasts that base oil demand would pick up following the summer recess turned out to be wrong. In Europe for example, Germany’s fiscal condition is damaged and weak, and when the largest economy within Europe is in this situation, it does not augur well for recovery and growth in other nations.

Crude oil prices have slipped from the recent highs, but markets remain bullish as several OPEC+ member countries consider whether to join the production cutbacks by Saudi Arabia or to continue selling as much crude as possible. At elevated prices, those sales offer lifelines for many struggling economies. 

Prices for dated deliveries of Brent crude fell approximately $1 the past week to $93.50 per barrel, still for November front month settlement. West Texas Intermediate dipped to $90.15/bbl, also for November front month, so the crack between the benchmarks remains narrower than normal at around $3. 

Low-sulfur gas oil prices fell surprisingly but remain high relative to crude at $968 per metric ton, still for October front month. All of these prices were obtained from London ICE trading late Sept. 25.


Still no Group I export activity from Europe, with producers admitting that they would not have the available barrels to offer for large cargoes to destinations such as the Middle East Gulf and West Africa. There have been some attempts to move Mediterranean cargoes to Turkey, but delivered prices proved too high for Turkish receivers, so availabilities were diverted back to local markets.

Prices for Group I exports – notional and provided here for comparison purposes only – are unchanged from last week at between $1,065/t and $1,100/t for solvent neutral 150, $1,125/t-$1,225/t for SN500 and SN600 and $1,295/t-$1,360/t for bright stock, all on an FOB basis. The levels for light neutrals remain close to diesel prices and would have lost their normal premium over distillates.

Prices for Group I sales within Europe are feeling pressure from competing forces. Feedstock costs are certainly exerting upward pressure as suppliers are eager to re-establish acceptable premiums to diesel. The premium to diesel is at a seven-month low and the premium to vacuum gas oil at a five-month low.

At the same time, applying price hikes when demand is low is difficult. In addition, producers do not want to be building inventories that need to be reduced before the year end; lowering prices could be the only tool for accomplishing that – other than exporting, which might require discounts.

One item of interest to the lubricants industry in the U.K. (and perhaps EU countries) is the persistent practice of toll blended lubricants from United Arab Emirates being dumped in the market. Large quantities of finished lubes with ridiculously low prices are being pushed around the U.K. market, ruining competition and undercutting established suppliers.

Some sources complain that the products are being produced in Sharjah, U.A.E., using Russian base oils that are selling at a discount because they have been banned from the U.K., along with allied governments such as the European Union, the U.S. and Australia. These products are skirting the ban, critics say, because they are labeled as produced in the U.A.E. Complaints have been lodged with the U.K.’s Trade Remedies Agency.

Prices for Group I sales within Europe are unchanged this week at €1,055/t-€1,120/t for SN150, €1,095/t-€1,200/t for SN500 and €1,265/t-€1,320/t for bright stock.

The euro’s exchange rate with the U.S. dollar was steady the past week and was at $1.06139 on Sept. 25, leaving the price differential between Group I sales in the region and hypothetical exports at €100/t-€165/t, exports being lower.

The premium to diesel for Group II prices in Europe has fallen to the lowest level since March 2022, thanks to the rapid run-up in diesel. Again, it is clear that the situation is causing upward pressure on Group II prices. Markups have been imposed for smaller trades involving imports transported in flexi-tanks.

In general, values are unchanged this week at €1,135/t-€1,170/t ($1,215/t-$1,250/t) for 100 neutral, 150N and 220N and at €1,230/t-€1,275/t ($1,325/t-$1,375/t) for 600N. These prices apply to a large range of Group II oils from Europe, the U.S., Asia-Pacific and Red Sea sources, imported in bulk and flexies. Typically 100N and 150N are priced higher than 220N due to demand and Europe’s higher usage of the two lighter grades.

Group III prices appear more stable after recent talk of upward pressure. The Group III premium to diesel has fallen to the lowest level for more than a year, putting pressure on suppliers to consider hikes. The problem for them is that European market is currently experiencing low demand and excess supply. The trend of price decreases has at least stalled – at least for the moment.

The price range for Group III oils with partial slates of finished lubricant approvals or without approvals has narrowed, with October offers at €1,485/t-€1,525/t for 4 centiStoke grades, €1,465/t-€1,500/t for 8 cSt and €1,495/t-€1,555/t for 6 cSt, all on an FCA basis ex Antwerp-Rotterdam-Amsterdam or Northwestern Europe.

Last week’s report erroneously identified Chevron’s Nexbase 4 cSt oils as having a full slate of approvals. In fact, that product’s approvals for Volkswagen specifications lapsed some months ago, leading to an announcement to that effect by Chevron in February.

Prices for Group III base oils from Cartagena, Spain, which do carry a full slate of approvals, are unchanged at €1,875/t-€1,925/t for 4 and 6 cSt and at €1,860/t-€1,885/t, which are sold only in small quantities in Europe. These prices are all on an FCA basis ex hubs in Antwerp-Rotterdam-Amsterdam, Northwestern Europe and Spain.

Baltic and Black Seas

Baltic prices pertaining to supplies of Russian export barrels of Group I base oils have thrown up some amazing prices, which have been confirmed from trusted sources. SN 150 FOB Svetly is heard at $610/t, while SN 500 was confirmed at $650/t on the same basis.

From these prices it becomes easy to see why some unscrupulous blenders may be tempted to take illegal supplies of truck loads of Russian base oils. These supplies are managing to avoid customs checks at main border crossings by using back roads and small forest tracks to take rogue base oils into Lithuania and Latvia. These “pirate” operations are apparently more common than first known, and are coordinated by local “mafia” gangs, who also can supply quantities of Russian additives and other illicit “commodities.”

These base oils will be blended with other legitimate base stocks prior to blending into finished lubes to disguise their use. Finished lubricants will then be sold on as European Union origin. A price differential of more than $400/t for the base oils is more than enough to make the risks acceptable. 

Legitimate cargoes of base oils are moving into the Baltic ports, with imported material taken into Klaipeda and Riga ports to cover Latvian and Lithuanian blending operations. It is believed that another small cargo loading from Gdansk will deliver around 2,500 tons of Group I base oils to receivers in Liepaja or Klaipeda.

The parcel of around 5,000 tons is said to have loaded and is enroute to Turkey, but no confirmation of a vessel movement has yet been established. Only when the vessel discharges in Gebze will information become available.

With Group I prices having risen, bids for Lotos and PK Orlen material coming out of Gdansk would be priced in line with other mainstream European suppliers. The prices would be around $995/t for SN150, SN 500 at $1,085/t and bright stock at around $1,290/t FOB Gdansk.

Turkish base oil markets remain dull and with the economy in tatters, companies are short of liquid funds and cannot borrow dollars to be able to purchase cargoes of base oil on the international stage. Mediterranean offers for base oil were made from Aghio to receivers in Derince, but prices were high, and receivers could not accept offers. Some companies in Turkey made arrangements with partner companies based in European locations to arrange purchases on their behalf, using non-domiciled funds to open letters of credit. The purchases can then be imported with all normal documentation, allowing Turkish blenders to buy Mediterranean-sourced Group I and Group II base oils.

Armed with FOB prices for Baltic barrels of Russian base oil, it becomes obvious why those base stocks form the majority of base oil imports are coming into Turkish ports. Prices appear not to be moving upwards, although domestic Russian prices increased a couple of weeks ago by the ruble equivalent of $30/t. Russian base oil economics were difficult to gauge, but now SN 150 would be delivered at around $750/t, with SN 500 at $795/t, depending on freight paid. These are very attractive prices for Turkish blenders.

For Mediterranean suppliers to compete against Russian numbers is nigh impossible, with estimated delivered CIF prices for SN 500 now having to be pitched around $1,125/t CIF Gebze, more than $335/t higher than Russian product.

Tupras has Group I grades available out of Izmir refinery, but by aligning their pricing with the highs of a well known base oil report, they send the prices out of reach for the majority of buyers in Turkey. Material is made available ex-rack in trucks and prices and are heard as follows. SN 100 is at $1,100/t, SN 150 is at $950/t, SN 500 at $1,010/t and bright stock is at $1,200/t. These are dollar prices, and the base oils will be sold in Turkish lira at the exchange rate on the day. 

Group II ex-tank prices are maintained, but with other Group II prices across Europe may be under pressure to be adjusted from Oct. 1. Current levels are around €1,145/t-€1,175/t for the three lower vis products – 100N, 150N and 220N – and 600N at €1,345/t-€1,370/t. Supplies of Group II grades may be sourced from the Red Sea, the United States, South Korea or Rotterdam.

Partly-approved Group III base oils resold by distributors on an FCA basis, or on a truck-delivered basis, are maintained, with Russian 4 centiStoke grade from Tatneft remaining priced at $1,400/t. Other suppliers, such as Adnoc, Petronas and Shell using Bapco barrels, have prices maintained, these assessed higher 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 these requirements for a small number of blenders that require access to fully-approved Group III base oils.

Middle East

Cargoes continue to show loading out of Yanbu and Jeddah, with Group I and Group II base oils coming out of Yanbu refinery. Jeddah can load quantities of Group I solvent neutrals – SN 150 and SN 500. Group II cargoes are going into the west coast of India and also into Chennai and Kolkata, where they are joined by a large number of cargoes from South Korea. Cargoes are also loading for Alexandria in Egypt, where quantities of bright stock will be used to cover the Egyptian General Petroleum Corp. contract. Other material is coming out of Yanbu and Jeddah for receivers in the United Arab Emirates, with the supply going into Hamriyah, Fujairah and Jebel Ali.

After a busy start to business after the summer recess, Middle East Gulf markets are calming down, awaiting results of negotiations with sources in U.S. to purchase large quantities of Group I base oils. Cargoes as large as 30,000 tons have been mooted. With prices rising in the U.S., and with availabilities being curtailed as U.S refiners send more feedstocks into the distillate and gasoline pools, shunning base oil production with the arb is now closing for supplies into Middle East Gulf receivers.

There are still a large number of enquiries for Group I and Group II cargoes to arrive into the U.A.E. It was heard that Iranian base oil prices rose, but there is little evidence of Iranian material coming out in quantities as in years gone by. Sepahan refinery still offers SN 500 and SN500+ to receivers in Hamriyah, but it is not clear if these cargoes still move to India and Pakistan as before. It is considered that – with India having supplies of cheap Russian crude – Indian refiners can produce surplus base oils rather than import Iranian barrels as previously done. 

News arose of a cargo of around 9,600 tons coming out from Valencia and Augusta, with the vessel making a call at into Yanbu as has been done with previous vessels. It is not clear whether part of the cargo was discharged in Yanbu or whether additional material was being loaded. 

Russian barrels are on offer for usual receivers in Hamriyah. Inquiries are about for vessels to load from Limas terminal in Turkey, and also from Svetly in the Baltic. Russian prices are extremely attractive and are estimated to come into Hamriyah port at around $755/t for SN 150 and around $800/t for quantities of SN 500. The U.A.E. is an important outlet for Russian base oils, with supplies used to manufacture toll-blended lubricants at very low prices.

Group III base oil exports from the three Middle East Gulf production centers have loaded and are on the high seas enroute to receivers in India, China, the U.S. and Europe. Cargoes are from the U.A.E., Qatar and Bahrain. In Qatar, Shell had supplied around 47,000 tons in three cargo lots into India over the summer months but appear to have slowed down the frequency of supplies into this important market. This was the largest quantity delivered into the Indian market, although other cargoes of around 25,000 tons loaded for Singapore, mainland China, Europe and the U.S. Supplies of the gas-to-liquids-produced Group III+ base oils are now widely available in all global markets, whereas previously these oils were closely guarded and were not sold as base oils to third parties.

Netbacks for the partly-approved base oils loading out of Al Ruwais and Sitra are maintained at previous levels. Increased raw material costs are under review, but end markets in Europe and the United States are not positioned to allow suppliers to look at increasing prices at this time.

Netback returns are maintained at $1,470/t-$1,535/t for 4 centiStoke, 6 cSt and 8 cSt partly-approved and non-approved Group III base oils. These netbacks are positively ahead of the curve when looking versus diesel prices, but of course levels are not a prolific as two years ago, when netbacks would have been some $300/t higher.

Netbacks for gas-to-liquids material coming out of Ras Laffan in Qatar are assessed at around $1,550/t-$1,600/t, with that level based on prices from traders in Singapore and selling prices in the European market.

Netback levels are established from various distributors’ selling prices, less estimated marketing, margins, handling and freight costs.

Group II base oils sold 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 continue unchanged and are 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.


South Africa sources in Durban confirmed the large cargo that will load out of Rotterdam and Fawley for ExxonMobil. When the vessel is fixed, it will sail from Europe to Durban and then Mombasa. The cargo will consist of Group I, Group II and Group III base oils, although the cargo splits and quantities are not known. The cargo cannot be described as a true export but falls into the category of an “affiliate” or distributor parcel. 

The rainy season eventually ended, and Nigeria is trying to get back to a form of normality. Roads are still empty because the fuel subsidies were withdrawn by the Nigerian government. Lubricant blenders are noticing a marked downturn in requirements for finished lubricants due to lower traffic numbers on the roads. This may affect the requirements for cargoes of base oils, with a number of Nigerian traders scaling back operations to import large quantities of base stocks over the next month or so. 

Some of the traders involved in the base oil business made the decision to entirely pull out of base oils until the local situation improves – including banking system and accessibility to dollars, the new government’s 1% levy on imports, and also the availability of competitively priced base oils base oils from various sources. Prices in the U.S. have risen and now the arbitrage between the U.S. and West Africa may be closing. One cargo will load in early October, but it is believed that quantities of base oil for this cargo were purchased and agreed some time back. That was when prices would allow the movement from U.S. Gulf Coast and/or U.S. Atlantic Coast to be made. 

There may be scope to reopen negotiations with Russian suppliers to deliver cheaper priced cargoes of Russian base oils into Nigeria. Supplies would be made out of Kaliningrad, but how the financing would pan out is anyone’s guess, with Russian sellers sometimes offering open and extended credit to facilitate the delivery of a cargo. How Russian sellers would handle receiving naira and then converting on the Black market is another unknown.

The Singapore cargo of around 8,700 tons should arrive in Apapa shortly.

CFR Apapa prices for this cargo are estimated to be around $1,100/t for SN 150, $1,160/t for the SN 500 and SN 900 at around $1,195/t.

The naira to the U.S. dollar has fluctuated a little, having moved upwards to 780 naira/U.S. dollar, at least maintaining a rate more attractive than 930 naira/USD, which is where the rate was a few weeks back. Some receivers pay in local naira prior to traders exchanging the currency into dollars on the black market. The rate above is the official rate published by the Central Bank of Nigeria.

As fundamentals stand, there is pressure on base oil prices to rise.

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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