EMEA Base Oil Price Report


The European Union ban on all hydrocarbon derivatives from Russia went into effect Sunday, creating new disruptions for traders selling Russian base oils out of Baltic Sea ports. Meanwhile Group I exports from Europe remained sluggish, Group II prices in Europe fell, and Group III demand there remained buoyant.

Nearby nations such as the United Kingdom and Norway are joining sanction, which applies across the entire bloc except in countries where no other alternative is in countries such as Hungary and Slovakia that rely so heavily on crude pipelined from Russia that disrupting supply could wreck their economies.

These countries have been given special license to continue importing Urals crude, but they must stick to price caps adopted by the EU and several other countries.

The ban will cover base oils that previously found their way onto European markets through traders and resellers based on the Baltic. These traders will now have to look further afield for alternative markets to be able to continue operating as in a previous existence. Some of these companies have already ceased trading, and with storage space in ports such a Riga and Liepaja, Lativa, now readily available, it is not clear what the eventual outcome will be for these enterprises, which were dependent on Russian exports from the many refineries in the Russian Federation.

Lukoil continues to operate from its Svetly terminal in Kaliningrad, and is sending base oil cargoes from there to Nigeria, the United Arab Emirates and Turkey. Logistically this is not an ideal situation, but there are bigger challenges for those trying to maintain the flow of exports. One of the main ones is chartering suitable vessels to carry cargoes since EU owners and operators forbidden from offering tonnage to Russian charterers.

Some market sources have suggested that API Group I base oil markets could become short following the cessation of Russian imports, but information gathered the past few days indicates no immediate problems. Lubricant blenders that were relying on Russian barrels have found replacement sources or, in some cases, have switched to Group II oils. There are already signs of this improving Group II demand, but the long-term impact is yet to be seen.

Within Europe, Group I demand still has not picked, but there are signs that some prospective purchasers are venturing back into the market, looking for lower priced Group I. Their search was proving difficult because prices stabilized after the start of February, due at least in part to bullish crude and feedstock values. That trend reversed in the past few days, however as crude and feedstock prices rapidly fell, easing upward pressure on base oil prices.

Crude oil prices sank below the $80 per barrel mark to $79.60 per month for dated deliveries of Brent crude, now for April front month settlement. West Texas Intermediate fell to $72.85/bbl, still for March front month, stretching the crack between the benchmarks to more than $7.

Low-sulfur gas oil prices dropped more than $150 per metric ton over the past week to $782 per metric ton, still for March front month, its lowest level in some months. Some analysts had predicted that the ban on imports from Russia would affect diesel prices, but they began the week by receding to $769/t for February front month.

All of these prices were obtained from London ICE late Feb. 6.


Group I export trade from Europe has slowed, with fewer traded contracts and offers seen and heard this week. There are still a number of inquiries for shipments to move into Nigeria, but banking problems remain a major obstacle to successfully transacting business in that place.

A couple trades are being worked for the port of Apapa in Lagos, including a large quantity being evaluated out of a West Mediterranean port. This parcel could contain as much as 15,000 tons, but there is no certainty that a transaction will be completed. Other inquiries for this market involve Baltic supplies of Russian exports, with Lukoil perhaps looking at up to 10,000 tons out of Svetly, and another trader looking at 6,000 tons to load out of Riga on prompt dates. These trades are all conditioned on the obtaining of satisfactory letters for credit, which are required by regulation in Nigeria.

Other export destinations such as the U.A.E. figure for supplies out of Livorno, Italy, whilst a repeat cargo looks to be in the cards out of this port discharging once again first into Egypt, then Israel and finally a quantity into Gebze, Turkey. This cargo of around 7,000 tons will load toward the end of February.

A well known oil major will deliver a smaller than normal cargo of Group I to receivers in Tema, Ghana – 3,200 tons compared to the usual 5,000 tons routinely shipped to that port. Vessels on that route sometimes continue to South Africa for a second delivery, but the supplier in question recently completed a shipment to the latter country, so a top-off may be in order for Ghana.

The same major will also send a quantity from a hub in Valencia, Spain, to Gebze, for local blenders seeking base oils meeting higher specifications than they is available from Russian exports.

Prices have stabilized as the very low numbers seen at the end of 2022 and early this year are no longer around. Decreased crude costs have relieved upward pressure on these base oils, but availability shorten since diesel prices are encouraging refiners to shift feedstock from base oils to fuel distillates.

Export prices are now assessed between $895/t and $955/t for solvent neutral 150, at $925/t-$985/t for SN500, and at $1,075/t-$1,120/t for bright stock, all on an FOB basis. In each case the price at the low end of the range is $15/t-$25/t more than last week.

Group I trade within Europe is still sluggish with buyers taking smaller quantities than would be necessary to fully restock. This practice could start to change if signs emerge that prices could rise.

The impact of the ban on Russian imports remains to be seen. Some players expect no real effect, while others predict that availability will snug up.

Availability may start to wane over the next few weeks, sharpening focus on replenishment of inventories for the driving season just around the corner. Recent forecasts for European economies predicted that recessions may not be as deep and long lasting as previously expected, leading to an uptick in manufacturing industries, which in turn will promote growth across the European mainland.

Price for Group I trade within the region are heard to be slightly former than January at €1,070/t-€1,120/t for SN150, €1,185/t-€1,225/t for SN500 and around €1395/t for bright stock. Base oil values are probably now at an acceptable premium to diesel, since prices for that fuel fell in recent days.

The euro lost a little ground against a strong dollar early this week, and now posts at $1.0735. The price differential between Group I exports and sales within Europe narrowed going into February, and is now assessed at €95/t-€185/t, exports being lower.

Group II prices around Europe are taken lower against a backdrop of weak demand, with two major players applying discounts to existing values at the end of last week. Group II prices were at record low premiums to diesel, it is hard to figure why sellers would offer further price cuts. The recent dip in diesel to the premium to perhaps an acceptable level, but the differential between Group II and Group I prices was substantial.

One supplier reduced Group II values to $1,290/t-$1,340/t (€1,200/t-€1,250/t) for 100 neutral, 150N and 220N and to $1,500/t-$1,555/t (€1,400/t-€1,450/t) for 600N. Another took a more aggressive tack, arriving at $1,130/t-$1,140/t for the three lighter grades and at $1,300/t for 600N. These prices apply to an extensive range of Group II base oils from Europe, the United States, Asia-Pacific and the Middle East Gulf, supplied either in bulk or in flexi-tanks.

European Group III base oil markets remain buoyant and prices have held up across the board. Supply is relatively tight, reducing downward pricing pressure for this grade. The joint venture plant in Cartagena, Spain, is supporting the supply chain with large cargoes moving northwards to a Rotterdam hub for distribution and also FCA sales of the two main viscosity grades, 4 and 6 centiStoke. Eight cSt is available from most suppliers, but its use in Europe is limited to a smattering of specialist blends, mainly for metalworking fluids.

Availability is reasonable but there are few instances where material sits long in storage. Most inventories are presold months in advance.

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

Group IIIs with full slates of approvals are heard at higher levels this week at €2,050/t-€2,100/t for 4 and 6 cSt. Eight cSt oils are available at around €2,100/t, but demand is low in Europe. These prices are on an FCA basis ex hubs in Antwerp-Rotterdam-Amsterdam and Northwestern Europe and ex refinery gate sales in Finland and Spain.

Baltic and Black Seas

Baltic trades are fewer than in the past, with deep-sea cargoes the only options now for traders and distributors located in the Baltic ports. A few of the original distributors have ceased trading and have relinquished storage facilities in the ports of Riga and Liepaja in Latvia. Russian refiner Lukoil continues to transship material through Lithuania into Kaliningrad, where cargoes for Turkey, Nigeria and the United Arab Emirates are organized. Cargoes tend to be larger in size than the parcels that came on to the European markets through Antwerp-Rotterdam-Amsterdam and ports in the United Kingdom’s west coast and east coast. With the European mainland now closed to any Russian exports, there is talk of Kaliningrad being closed, although it would be difficult for Lukoil to maintain supplies from its northern refinery at Perm.

A large 10,000-ton cargo is being planned for Nigerian receivers out of Svetly, while a smaller 6,000-ton parcel also bound for Apapa is also being considered at this time out of Riga. The old question remains – will sellers be able to receive a satisfactory letter of credit from Nigeria that will allow to sail the cargo and sell to receivers on a CFR basis.

Other Baltic trades are reported out of the southern Baltic port of Gdansk, with one cargo of 2,750 tons of Group I grades now fixed to Hull in the east coast of the United Kingdom. While Lotos in Gdansk has always been a prominent supplier to receivers in the United Kingdom, it may be expected that additional cargoes will be commissioned from that source to cover for the lack of Russian barrels arriving into U.K. and European Union ports. Traders based in Geneva have a break/bulk operation in the U.K. that was partly dependent on Russian export barrels coming out of the Baltic ports. This operation will now change to alternative sources such as Gdansk, Aghio and Algeciras for imported Group I base stocks coming into the U.K. 

Russian cargoes which discharged prior to the cut-off day of Feb. 5 are able to be sold FCA or delivered from storage for as long as stocks remain. For example, the Riga supply is a parcel of 6,000 tons of SN 150 and SN 500. Therefore, this quantity will take a number of weeks or months to sell in total. From EU sources in Brussels, it was clear that Russian sanctions and the ban on hydrocarbon imports will not be reversed anytime soon, if at all. Even if hostilities were to cease in Ukraine and some form of settlement is agreed, EU sources have declared that rules and sanctions against Russia will not be reversed and that the ban on petroleum products will remain ad infinitum. 

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

FOB prices for Group I material loading out of Gdansk are part of the European mainstream pricing, with SN 150 assessed at $900/t-$960/t, with SN 500 at $930/t-$985/t, depending on destination. Bright stock, where applicable, is assessed at $1,080/t-$1,125/t.

In the East Mediterranean, Turkey is still importing large quantities of Russian Group l base oils and additionally has taken quantities of Group III 4 centiStoke material. A 4,000-ton cargo loaded out of Algeciras for import into Gebze. This cargo, along with other imports from Livorno and Aghio, has new offered prices heard at around $945/t-$975/t for quantities of SN 150, with SN 500 and 600 at $975/t-$995/t on a CIF basis. On the Group III supply front, and small cargo of 1,000 tons is loading out of Cartagena, Spain, for receivers in Gemlik. This is a further small parcel that will augment the stocks of Group III fully-approved base oils for the Turkish market. It is thought that prices for this cargo for 4 cSt and 6 cSt material will be around €2,250/t delivered CIF.

There is an interesting shipping enquiry for 3,000 tons of base oils to move from Mersin to a Red Sea port, which is suggested to either be Aqaba or a Sudanese destination. It has been indicated by local sources in Turkey that this is Tupras material marked for an export trade rather than going into the local market. The reasoning behind this move is not clear, since it was reported that Tupras had ceased production of Group I base oils again at Izmir refinery, and will post a statement towards the end of this month regarding the re-start. It was also heard that Tupras may cease production of base oils totally at Izmir refinery. This remains unconfirmed.

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 arrive from Red Sea, the United States and South Korea.

Group III base oils, sold on an FCA basis for partly-approved grades, are reassessed at €1,865/t-€1,900/t. Fully-approved Group III grades are to be delivered into Gemlik from Cartagena in Spain and will be priced at around €2,250/t-€2,300/t FCA. Small cargoes of 1,000 tons up to 1,500 tons loaded out of Spain for discharge into ports such as Gemlik.

Middle East

Red Sea news is that a large cargo will load out of Yanbu and Jeddah, with up to 18,000 tons of Group I and Group II base oils. This is for delivery into Hamriyah port in Sharjah. The planned cargo of 3,000 tons of bright stock has also loaded out of Yanbu for Egyptian General Petroleum Corp. in Alexandria, Egypt. Cargoes continue to be planned load for destinations Mumbai anchorage and Karachi.

As well as the large Red Sea cargo for the U.A.E., cargoes originating from Rayong in Thailand are loading for Hamriyah and are also taking Group I material into Ras al Khaimah in the U.A.E. These are in addition to the Indian cargoes from Haldia and Chennai, which are still planning to arrive into Hamriyah during February.

The large cargo of Group I base oils coming from Livorno to the U.A.E. is now fixed clean, with the vessel loaded right at the end of January, with expected estimated time of arrival into the U.A.E. during the first half of March. The cargo is a total of 10,000 tons, made up of three grades of Group I base oils – SN 150, SN 500 and bright stock.

Prices are not known as yet, but FOB numbers are assumed to have been very keen. Indications for delivered prices could be around $925/t for the SN 150, $985/t for the quantity of SN 500 and bright stock at around $1,125/t, all CIF.

Other alternative Group I base oil cargoes are offered from mainland Europe and the U.S. Gulf Coast, with options for discharge into the U.A.E. or, alternatively, Mumbai anchorage. Offers for supplies from Kaliningrad and Limas are also on the table for both destinations, with Russian suppliers Lukoil or Litasco offering exceptionally low prices just to break into these markets. Specification can be an issue, with lower viscosity index and darker color than optional supplies from Europe or the U.S., but prices are extremely competitive. Delivery lag is a problem for receivers in the U.A.E., with sellers insisting that letters of credit have to be opened prior to loading, with sailing time from Baltic to UAE tying up finance for a protracted length of time.

The ExxonMobil cargo of 12,000 tons will load out of Rotterdam and then Augusta, with a combination of Group II and Group I base oils, going first to call at Yanbu, then final discharge in Jebel Ali. This cargo will commence loading in Rotterdam around the middle of February, with ETA into the U.A.E. around the end of March.

A Group II cargo of three grades making up a total of 8,000 tons will load from Ulsan in South Korea and will sail to the U.A.E. for discharge into Hamriyah port. This cargo will not arrive in Hamriyah until April.

There is one new cargo out of Al Ruwais for WC India, with 8,000 tons of Group III grades going into Mumbai anchorage during the first half of February. A large parcel of 10,000 tons of Group III+ base oils will start loading in Ras Laffan in around 10 days’ time and will discharge in Mumbai port. This cargo will be made up of Group III+ gas-to-liquid base oils, which are produced in a joint venture and are exclusively for Shell.

Netbacks for partly-approved and non-approved Group III base oils loading out of Al Ruwais and Sitra are unchanged this week, with selling prices in regional markets stable. Netback returns are assessed at $1,690/t-$1,725/t for the range of 4 cSt, 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 sold on a FCA basis in the U.A.E. can be sourced out of European, U.S, Asia-Pacific and Red Sea producers. These grades are available FCA U.A.E., or on a truck-delivered basis within the U.A.E. and Oman. Prices remain 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 confirmed the large cargo of base oils and chemicals that loaded out of Rotterdam and Fawley. The vessel will deliver 5,000 tons of three Group I grades to receivers in Tema in Ghana. The vessel will then proceed to Durban to discharge the remaining balance of the cargo. Additionally, the same supplier is arranging a smaller cargo of 3,200 tons for the same receivers in Tema. There is only to be two grades on board. In addition to supplying receivers in Tema port, ExxonMobil are also to deliver 6,000 tons of Group I base oils to receivers in Conakry and Abidjan. The cargo will be comprised of three Group I grades – SN 150, SN 600 and bright stock – unless the supplementary cargo mentioned is covering a further two grades.

A Lukoil cargo of up to 10,000 tons that is being considered for Apapa remains as a shipping inquiry, and it appears that this may not proceed. The problem is anticipated to be the letter of credit from the local Nigerian bank. As with the other smaller parcel of 6,000 tons out of Riga, there could be delays to the banking instrument that is regulatory for any base oil imports going into Nigeria.

The shipping inquiry for a vessel to take 10,000 tons of base oils from South Korea to Lagos appears to have been ditched. With freight rates remaining exceptionally high, the reasoning behind such a deal is hazy, to say the least. The cargo would presumably consist of three grades of Group I base oils, but there are more questions than answers regarding this inquiry.

A further shipping inquiry for 10,000 tons of Group I base oils to load out of a West Mediterranean port and sail to Lagos has appeared this week. Traders are reluctant to say whether this cargo will go ahead and are awaiting news on the banking front. It is thought that offers for this cargo are higher than Russian prices. The offers may be around $1,050/t for SN 150, SN 500 is estimated to be at around $1,100/t, and SN 900 is priced at around $1,125/t. Prices are higher than noted below, which may be due to higher FOB levels or increased freight rates.

Banking problems are still rife in Lagos and are proving to be a deterrent to transacting business in Nigeria. The system still cannot provide sufficient foreign currency. This prevents local Nigerian banks from opening letters of credit, which are required to grant import licenses for product arriving in Nigeria.

CFR levels for base oils discharging in Apapa 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 is assessed at around $1,220/t CFR Apapa. Bright stock would have formed part of the Livorno parcel and also the Rotterdam and Fawley cargo.

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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