EMEA Base Oil Price Report


The outlook for base oil markets is cloudy at the moment due to several uncertainties as the industry approaches what is normally a ramp-up to the spring driving season and an uptick in automotive engine oil changes.

Lubricant blenders across Europe, the Middle East and Africa are currently living with low inventories, which could boost purchasing trends in the near future. At the same time, prices for API Group I base stocks have fallen so far that they are discounted to diesel prices for the first time since late 2021. Group II prices are also at their lowest premium to diesel for almost one year. This will incentivize refiners to further cut base oil run rates to maximize production of diesel and other distillates

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This action in turn could shorten availabilities for Group I and Group II, just at a time when demand may start to pick up. This could create supply problems in certain parts of the Group I market, such as export trades. A number of export markets have relied recently on alternative supplies from areas such as Asia-Pacific and U.S., but demand in those locations are susceptible to the same seasonal cycle and typically cover their own markets before looking to export to other areas.

The ban on Russian base oils is approaching European markets fast, with the last of the Baltic cargoes loading last week for receivers in Rotterdam. Some parties still have obviously to replace Russian barrels on their slate, and this could also bring supply pressures to bear on Group I and II markets around Europe.

The picture is complicated by the current absence of any real demand as many buyers are sitting on the fence and purchasing only minimum quantities to tide them over until lubricant demand picks up. It may then be too late for all parties to cover requirements from a market that may be moving shorter due to the reasons given above.

Prices are still under pressure to remain where they currently figure, but sellers have started to dig their heels in, and in some instances have moved numbers higher for Group I and oils. Upward movement in crude oil values puts pressure on margins for base oils and other oil products.

Crude prices have firmed over the past week with Brent and West Texas Intermediate rising around $4 per barrel. Dated deliveries of Brent now post at $88.30/bbl for March front month settlement, while WTI is at $82.05/bbl, also for March front month.

The end of COVID-19 lockdowns China should help revive that country’s manufacturing and construction segments and could give a much-needed boost to markets in the Far East. Many analysts expect demand to return in a big way after Lunar New Year celebrations. 

Low-sulfur gas oil prices have also started climbing back toward levels not seen since last November, poking through the psychological barrier of $1,000 this week. The price is currently at $1,001 per metric ton for February front month, and it could rise further as temperatures are forecast to fall in Europe. All of these prices were gathered from London ICE trading late Jan. 23.


European export markets have cooled following the flurry of activity seen during the first half of January when a number of large cargoes were sold into typical export destination such as West Africa and the Middle East. There are still a few inquiries for cargoes to load out of the Baltic and the Mediterranean for receivers in Nigeria and Turkey.

Prices may have steadied because of upward crude and feedstock prices, and in more than one case sellers have now raised offers higher than seen in that round of cargoes. A number of parties are trying to arrange supplies from alternatives to Russian sellers, but this is proving to be more difficult than some imagined. There are signs that the Group I market may start to tighten up.

Prices for Group I exports here reflect the new prices heard around the market last week, with the low ends of ranges higher than previously heard. Solvent neutral 150 is now assessed between $885 per ton and $945/t, while SN500 is at $910/t-$975/t and bright stock at $1,055/t-$1,100/t, all on an FOB basis.

Group I trade within Europe remains slow, but a few players are still looking for replacements for Russian barrels, and options for some are running out. Reports are that some blenders are having difficulties finding suppliers in the correct location. A provision of the EU’s ban on Russian petroleum product imports allows previously contracted shipments to continue until Feb. 5, so the last Baltic cargoes are required to be delivered and discharged within the next two weeks.

As with export sales, some suppliers for intra-regional trade are asking markups for February sales, though many of these offers have not yet been accepted by buyers. It remains to be seen whether markups prevail, as some Group I producers still have inventories that are higher than ideal for this time of year. Buying activity does appear to have increased during the past few days. with some resellers reporting low in-tank stocks, particularly for heavier neutrals and bright stock.

There are a few concerns regarding pockets of the Group I market becoming tighter following the ban on Russian imports, but many blenders have said that availabilities remain positive, at the same time some refiners are putting out signals that they are trying to max out on distillate production at the expense of some base oils. Light grades may be the first to show signs of a tightening supply scene.

Prices for Group I sales within Europe remain at €1,055/t-€1,100/t for SN150, while SN500 is at €1,175/t-€1,225/t, and bright stock, where available, is put at around €1385/t.

The euro’s exchange rate to the U.S. dollar is barely changed this week at $1.08521. The price differential between Group I exports and sales within the region is unchanged at €135/t-€275/t, exports being lower.

Group II prices in Europe are steady, and downward pressure has certainly lessened. If crude and vacuum gas oil prices rise further pressure could build in the opposite direction. Demand is expected to start picking up during February, and the outlook for summer and beyond is positive.

Prices for Group II are unchanged this week at $1,300/t-$1,380/t (€1,200/t-€1,275/t) for 100 neutral, 150N and 220N and at $1,520/t-$1,580/t (€1,405/t-€1,460/t) for 600N. These values apply to a range of Group IIs from Europe, the U.S., Asia-Pacific and the Middle East Gulf, supplied either in bulk or in flexi-tanks.

European Group III base oil markets have been buoyed by replenishment cargoes arriving from the Middle East Gulf and Malaysia, and with considerable quantities from Cartagena, Spain, to hubs in Rotterdam and Turkey and a cargo of almost 14,000 tons moving to Mumbai. Additionally a smaller parcel is going into Livorno, Italy, for Eni.

Demand for Group III remains positive, with forecasts stating that demand should continue rising through this year thanks to new engine oil performance specifications that encourage use of Group III. There are immediate problems on the supply side, as all sources are maxed out on production, and allocations have been implemented for European markets. If new production sites start operating in Asia-Pacific they could alter trade flows, freeing up more product for European and U.S. markets

Prices Group III oils with partial slates of finished lubricant approvals are unchanged at €1,700/t-€1,735/t for 4 and 6 centiStokes and at €1,675/t-€1,725/t for 8 cSt, all on an FCA basis ex Antwerp-Rotterdam-Amsterdam or Northwestern Europe.

Values for Group III oils with full slates of approvals have been heard at much higher levels, but the ranges also include some extremely low priced sales. Prices are reassessed at €1,720/t-€1890/t for 4 cSt and at €1,735/t-€2,100/t for 6 and 8 cSt, all on an FCA basis ex hubs in Antwerp-Rotterdam-Amsterdam or Northwestern Europe. The lower ends of the ranges refer to situations where fully-approved base oils have to compete against partly-approved grades. 

Baltic and Black Seas

Baltic business reappeared this week, with a couple of large cargoes worked out of either Riga or Svetly in Kaliningrad. The first is a parcel of up to 10,000 tons for receivers in Apapa, Nigeria, while the other cargo will move another 10,000 tons for receivers in Gebze. Alternatively, the latter cargo may go into Antwerp-Rotterdam-Amsterdam, although even with loading on a prompt basis, time is running out to move this parcel before the European Union ban on Feb. 5.

Another cargo has loaded out of Riga with 6,000 tons of Russian export barrels going into Rotterdam. This will possibly be one of the last form fixtures moving into an EU port. This will be the final cargo “under existing contract,” the terms under which Russian cargoes have to qualify to be permitted to discharge in an EU port. This practice will come to an end after Feb. 5.

A replacement supply in lieu of Russian supplied cargoes out of the Baltic will arrive into an east coast of the United Kingdom port from southern Spain. The Group I cargo consists of two grades, thought to be SN 150 and SN 500. Other cargoes from Greece and Italy are expected to take the place of Russian barrels over the course of the next few months.

Russian suppliers are having to locate new receivers in permitted countries where import of Russian products are still allowed, although finding and selling to new receivers is not simple, with these customers having previously sourced material from mainstream suppliers from Europe and the U.S. where specs are higher than Russian exports. Turkey remains the mainstay for Russian exports, and without this outlet Russian refineries would have to severely cut run rates, or even halt the production of base oils altogether.

Still no clarification on the production from companies such as Gazprom and Rosneft. These large producers had monthly tenders for the supply of base oils through Baltic ports, but with the EU ban coming in, these have disappeared.

Suitable shipping from Russian ports such as Kaliningrad is considered a major problem, with European owners and operators unable and unwilling to offer vessels for Russian exports. Turkish owners and other flags of convenience vessels are the only options open to Russian exporters.

FOB prices from Riga or Svetly for SN 150 are placed at $785/t-$835/t, with SN 500 at $800/t-$845/t. Prices are given as indications only.

FOB prices loading from Gdansk are covered under European mainstream pricing and may have been adjusted slightly higher as a result of European moves. SN 150 is assessed at $885/t-$945/t, with SN 500 at $900/t-$975/t, depending on destination. Bright stock is assessed at $1,055/t-$1,125/t.

Turkey has taken large quantities of Russian base oils. with this market taking in excess of 250,000 tons during last year. This country continues to take quantities from Russian exporters, but in addition this market again started taking Group I base oils from Aghio in Greece and Livorno in Italy. Suppliers MOH and ENI have sent cargoes of up to 6,000 tons into Gebze and Derince. There was one parcel from Livorno of 5,500 tons for receivers in Gebze and another 5,000-ton cargo loading out of the same port for a three- port discharge into Egypt, Israel and finally Gebze.

The national refiner Tupras was down about 40% in supplying the local Turkish market during 2022, mainly due to breakdowns and other feedstock and supply interruptions.

Prices for the ENI offers would have been keen to enter the Turkish market, with CIF numbers at around $920/t-$945/t for quantities of SN 150, with SN 500 and 600 at $965/t-$985/t. It remains to be seen if both the Greeks and the Italians continue to price aggressively to put product into the Turkish market, particularly in light of the premium to diesel being eradicated for these Group I base oils. FOB prices for base oils out of Aghio and Livorno are currently around $100 below diesel levels.

Prices from the local Turkish refinery at Izmir were last heard at $859/t for SN 150, $1,000 pmt for SN 500, with bright stock at $1,195/t. Prices are for truck loads ex refinery, purchased in Turkish lira. 

Group II prices ex-tank for material from a variety of sources imported into Turkey for resale remain unchanged, assessed at €1,485/t-€1,565/t for the three lower vis products –100N, 150N and 220N – with 600N at €1,590/t-€1,640/t. Supplies of Group II grades can arrive from Red Sea, the United States (often via Antwerp) and South Korea.

Group III base oils sold on an FCA basis for partly-approved grades are maintained at €1,765/t-€1,800/t. A cargo from Malaysia of 5,000 tons of two grades of Group III base oils is expected to arrive into Gebze around the end of February. Fully-approved Group III grades delivered into Gebze from Cartagena in Spain are priced at around €1,875/t-€2,100/t FCA. Small cargoes of 1,000-1,500 tons load out of Spain for discharge into ports such as Gebze.

East Mediterranean reports have a large 10,800-ton cargo loading out of a U.S. Gulf Coast port for receivers based in Ashdod in Israel. This is a large parcel going into the Israeli market and was due to load at the end of last week.

Middle East

Red Sea loading schedules show a number of cargoes moving to various locations such as Durban in South Africa, Mumbai anchorage, and Singapore. The cargoes loading out of Yanbu are Group I and Group II combinations, while vessels also loading from Jeddah port are lifting SN 150 and SN 500 from that refinery. Jeddah refinery may cease to produce base oils from 2025 onwards, although a final decision has not been taken as yet. An expansion at Yanbu will more than compensate for the loss of the Group I production at Jeddah.

There are multi cargoes varying sizes all arriving into the United Arab Emirates, mainly discharging into storage at Hamriyah port in Sharjah. The cargoes are arriving from South Korea, Taiwan, mainland China and Thailand. Most parcels are smaller, at 2,000-3,000 tons each, and are made up of Group I, Group II and Group III base oils.

Larger Group I base oil cargoes are being evaluated from Europe and the U.S., with option to take the material either to U.A.E. ports or to go into Mumbai anchorage with the same cargo. Baltic and Black Sea are other sources that Lukoil have for placing Russian export barrels. It was heard that offers of 5,000 tons up to 10,000 tons were made to Indian potential buyers at very attractive prices. The quality appears to be the main problem, with lower viscosity index and darker color than mainstream production from either Europe or the U.S., but prices are attractive to buyers, so there may be scope for opening up new receivers in Mumbai. The other problem is that with long sailing times for cargoes loading out of the Baltic, for example, Indian receivers would have to wait around 10 weeks after negotiation and contract before discharging the cargo.

There is still mystery surrounding the various cargoes arriving into the U.A.E. from Indian ports. Where these base oils are produced is unknown, but information received last week seems to indicate that these oils are of Indian origin, with production coming out of Haldia and Chennai refineries. Material going into Ras al Khaimah is loaded out of Karachi and may be coming from the local refinery.

The ExxonMobil cargo of 10,700 tons sailed from Rotterdam and Fawley and is now on the high seas en route to Yanbu, then Fujairah, and finally Jebel Ali. This major has taken a further cargo out of Valencia, then loading Group l base oils from Augusta in Sicily, before proceeding to the same three ports of Yanbu, Fujairah and Jebel Ali. This cargo is around 12,000 tons of Group II and Group I base stocks.

Cargoes loading out of Al Ruwais and Sitra consist of large quantities of Group III base oils allocated to specific markets in the U.S., Europe, China, and the west coast of India. The Indian cargo out of Sitra – which loaded up to 20,000 tons of three grades of Group III base oils – is to be followed by a parcel of 16,000 tons out of Ras Laffan also bound for Mumbai anchorage. This cargo will be made up of Group III+ gas-to-liquid base oils from Qatar, which are produced exclusively for Shell affiliates. The Al Ruwais cargoes are destined for mainland China in addition to the west coast of India. The shipping inquiry for 5,000 tons to move from Al Ruwais to Buenos Aires has come to nothing, suspecting that the inquiry was just traders price checking.

Netbacks for partly-approved and non-approved Group III base oils loading out of Al Ruwais and Sitra remain unchanged, with selling prices in regional markets reported at consistent levels. Netback returns are assessed at $1,690/t-$1,725/t, for the range of 4 centiStoke, 6 cSt and 8 cSt partly-approved Group III base oils.

Netback levels are based on local FCA prices in markets such as Europe, India, the U.S., and China. Thereafter, netback levels are derived from regional selling prices, less marketing, handling and estimated freight costs.

Group II base oils selling on a FCA basis in the U.A.E., being sourced out of European, U.S, Asia-Pacific and Red Sea producers are resold FCA, or on a truck-delivered basis within the U.A.E. Prices are maintained with levels at $1,540/t-$1,575/t for the light vis grades, with 500N and 600N at $1,600/t-$1,670/t. The high ends of the ranges refer to road tank wagon-delivered base oils.


South African sources reconfirm the large cargoes of base oils and chemicals loading out of Rotterdam and Fawley. The latest cargo is not fixed as yet but will load up to 24,000 tons, depending on the specific vessel. This cargo will load at the end of January. The vessel will call at Tema port in Ghana with 5,000 tons of SN 150, SN 500 and bright stock. The vessel will then proceed to Durban with the remaining balance of the cargo.

In addition to supplying the Ghana tender into Tema port, ExxonMobil sent around 6,000 tons of Group I base oils to receivers in Conakry in Guinea and Abidjan in Cote d’Ivoire. The cargo will be comprised of of three Group l grades – SN 150, SN 600 and bright stock.

Another Lukoil cargo of up to 10,000 tons is again being considered for Apapa. The parcel would load either out of Riga or more likely out of Svetly in Kaliningrad depending on the supply arrangements for the trains leaving the refinery and transiting either through Latvia to Riga port, or through Lithuania to Kaliningrad. This cargo will load during the second half of January if all can be agreed with receivers.   

Recent cargo movements going into Nigeria are from the Baltic with 10,000 tons of material on board. Another came out of Rotterdam and Fawley for ExxonMobil, with up to 12,000 tons on board. Eleven thousand tons loaded out of Livorno, with a further 10,000-tons parcel from Aghio. The final cargo was the smaller 5,000-tons parcel loaded out of Riga.

Banking problems are still the main barrier to doing business in Lagos, with two of the main traders sitting back and not getting involved in accessing cargo-sized parcels of Group I base oils either from Europe or from U.S suppliers. Comments are that both of these parties do not want to get involved in the painful process of receiving or not receiving a letter of credit from local banks in Lagos. The cargoes that have been identified have understandably been underwritten with letters of credit, since these banking instruments are required for import permits in Nigeria. Letters of credit are ultimately confirmed by a prime European bank.

CFR levels for base oils discharging in Apapa are confirmed but are given as indications only.

Levels are established at $1,000/t for SN 150, SN 500 at around $1,050/t, and SN 900 at $1,095/t. Also, as an indication, bright stock that may have been loaded on the Livorno and the Rotterdam/Fawley cargoes is assessed at around $1,220/t CFR Apapa.

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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