EMEA Base Oil Price Report


Throughout Europe, the Middle East and Africa, a number of key production outlets have announced that maintenance work will be undertaken during the next few months.

API Group I refiners from the Baltic to the East Mediterranean will undergo turnarounds in various forms and degrees during the next few months, perhaps shortening up the Group I market just when many blenders are planning to replenish inventories that have been run down since the back end of last year.

With the absence of Russian products also contributing to a shorter supply scene, the Group I market could face a period of tightening availabilities that could make it difficult for some finished lubricant blenders to cover all base oil requirements during the spring and early summer ramp-up in automotive engine oil demand.

Group II refiners could also be affected by routine turnarounds at some of the major Group II producers in Europe and the United States. Group II values have been falling, narrowing the gap between Group I and II prices considerably over the past couple months.

Price cuts have obviously been welcomed by buyers, who have been complaining for some time that Group II price levels were extraordinary high and that this was one of the main factors affecting lackluster demand for these grades in the European arena. Some players were reluctant to make a move to Group II  because of the disparity on price compared to Group I base stocks. The latest moves have brought numbers more into line with other regions such as Asia-Pacific and the U.S., where selling prices were traditionally much lower than Europe.

Group III prices have stayed in the higher echelons and have not been subject to the downward pressures experienced by the Group II and Group I camps. The Group III market in Europe is finely balanced, with supply almost exactly meeting demand, which is a comfortable place for Group III producers to be in. If anything, the market could stand more supply, but with producers running around capacity, there is not a great deal of scope for increasing availabilities at this time.

Crude prices moved higher through last week, returning to levels last seen around the end of January. The restart of China’s economy following the Lunar New Year holiday yanked crude values back above the $80 per barrel mark. Dated deliveries of Brent crude rose to $86.05/bbl for April front month settlement, some $7 higher than last week. West Texas Intermediate climbed to $79.50/bbl for March front month, maintaining the crack above $7.

Low-sulfur gas oil prices rallied some $70 since last week to $840/t, now for March front month. All of these prices were obtained from London ICE trading at the close of Feb. 13.


Group I exports from Europe disappeared last week as few new deals were reported. Typical export markets in Nigeria, India and the United Arab Emirates appear to be sated, with traders offering few insights for future purchase plans. There is only one possible cargo being worked at the moment – a 10,000 ton parcel out of Svetly in Kaliningrad for Lukoil. This supplier will also load another parcel of up to 6,000 tons for receivers in Gebze, Turkey.

All Nigerian business is conditioned on getting satisfactory letters of credit out of the Nigerian banking system, which is easier said than done. There are reportedly still problems getting dollars, which in turn hinders the issuance of letters of credit. An earlier shipment from Livorno, Italy, to Egypt and then Israel will be repeated but apparently will not include a stop in Turkey this time. The parcel is larger than last time, almost 7,000 tons, and was loaded at the start of February.

A oil major will deliver a small 3,000 tons cargo of Group I into Gebze. This will load from a hub in Valencia, Spain, and top off in Augusta, Italy, before sailing through the Mediterranean to Turkey.

Prices have stabilized since last week, but the run-up in crude and feedstock prices is creating upward pressure for Group I numbers. Prices are between $895 per ton and $955/t for solvent neutral 150, at $925/t-$985/t for SN500 and $1,075/t-$1,120/t for bright stock, all on an FOB basis. In the Mediterranean, however, one supplier offered exceptionally low prices for an export cargo –$685/t for SN150, $805/t for SN600 and $1,012/t for bright stock. These numbers were indexed, so variations could could vary depending on rates contained in one particular report.

Group I activity within Europe suggests buyers may be starting to think about replenishing inventories, but many are still sitting on the fence and buying small quantities just to tide them over. A few traders and resellers said some blenders may be preparing to ramp up activity, but many are indicating that they are running at around 60-70% of normal activity. “Normal” refers to times before the war in Ukraine or the coronavirus pandemic.

The absence of incoming Russian base oils has not caused the damage that many feared. While some blenders in the Benelux region are still struggling to replace Russian barrels, many have stocks in tank to see them through until April or May.

Availabilities may start to wane during the coming months, focusing buyers’ minds on replenishment of inventories  In addition, economic prospects for some major European economies – Germany, for example – are improving, reducing worries of recession in the region.

Prices for Group I sales within Europe have not changed since the beginning of the month, remaining at €1,070/t-€1,120/t for SN150, at €1,185/t-€1,225/t for SN500 and around €1,395/t for bright stock. However there is one South Korean seller who is offering SN150 at $840/t-$850/t and SN500 at $950/t-$960/t. Both grades are sold on an FCA basis ex Rotterdam storage.

The euro is static against the dollar, posting at $1.07195. The differential between domestic and export pricing remains unchanged at €95/t-€185/t, exports being lower.

European Group II prices are unchanged this week after announcements of markdowns a couple weeks ago. All suppliers fell in line with the first announcements, indicating a focus to protect market share. The Group II premium to diesel remained at record low levels, since values for the latter rose this week.

Prices are at $1,130/t-$1,140/t (€1,055/t-€1,065/t) for 100 neutral, 150N and 220N and at $1,300/t-$1,325/t (€1,215/t-€1,238/t) for 600N. These levels apply to an extensive range of Group II base oils from Europe, the U.S., Asia-Pacific and the Middle East Gulf, supplied either in bulk or in flexi-tanks.

Group III base oil markets around Europe is still robust, and prices are holding up at recent high levels. Supply remains relatively tight and can be described as being in balance. The joint venture refinery in Cartagena, Spain, continues to be a prominent source, having sent a cargo of 16,500 tons to the Rotterdam hub and a parcel of up to 17,000 tons into Mumbai anchorage.

Availability is reasonable at this time, but there is little spare’ material. Most inventories are sold in advance, and sellers are now offering materials for April and May. There are rumors that some customers are being put on allocation by suppliers of oils with full slates of finished lubricant approvals, limiting deliveries of 4 and 6 centiStoke grades to 85% of normal liftings.

Prices for Group III oils with partial slates of approvals are priced at €1,700/t-€1,735/t 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 and Northwestern Europe.

Oils with full slates of approvals are heard at higher levels, with 4 and 6 cSt grades at €2,050/t-€2,100/t. Eight cSt oils are available at €2,075/t-2,125/t, but demand is low for this grade within Europe. These prices refer to FCA sales from hubs in Antwerp-Rotterdam-Amsterdam or Northwestern Europe and ex refinery sales from Finland and Spain.

Baltic and Black Seas

Baltic trading is well down compared to years gone by, with the loss of European Union and other like nations’ imports. Sellers are trying to open up alternative markets, but this is proving very difficult to immediately take market share in location such as India and the United Arab Emirates. Logistics are against suppliers based in the Baltic with freight rates extremely high, and shipping limited to Russian charterers. Delivery time is extended for vessels loading out of the Baltic, bringing another negative element into the deal, by tying up buyers’ capital for a long period prior to delivery.

Russian refiner Lukoil, continues to tranship base oils material through Lithuania, going into Kaliningrad, where cargoes for Turkey, Nigeria and UAE are loaded. Cargoes tend to be larger in size than the parcels which came on to the European markets through Antwerp-Rotterdam-Amsterdam and ports in the west coast and east coast of the United Kingdom. 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 cargo of up to 10,000 tons is planned for Nigerian receivers out of Svetly, but the question is whether sellers can receive a satisfactory letter of credit from Nigeria that will allow them to deliver on a CFR basis.

Southern Baltic trades are reported out of Gdansk. Lotos in Gdansk have traditionally been prominent in supplying base oils to receivers in the United Kingdom, and subject to availability, additional cargoes may be loaded from that source to replace Russian barrels which used to arrive into U.K. and EU ports.

Baltic FOB prices from Riga or Svetly for SN 150 are indicated lower at $685/t-$735/t, with SN 500 also lower at $800/t-$845/t. Prices are offered as indications only. Sellers are having to be extremely aggressive on pricing to be able to make these cargoes work going into ports such as Gebze in Turkey. One such cargo is loading on a prompt basis out of Svetly terminal with up to 6,000 tons of SN 500 and SN 150 for receivers in Turkey. The vessel would appear to be Turkish flagged.

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.

Black Sea and East Med trade sees Turkey still importing large quantities of Russian Group I base oils, with December figures showing that buyers in Turkey took around 40,000 tons of Russian base oils to round off a year when some 300,000 tons of Russian base oils were imported into the Turkish market. Price is paramount for Turkish buyers, and Russian SN 500 is coming into Turkish ports at around $1,010/t. This price, when compared to material from Aghio – December price at around $1,140/t – and Livorno material – priced at around $1,500/t in December – is being snapped up by Turkish buyers who are motivated by the attractive low prices offered from sellers such as Lukoil.

Imports from Livorno and Aghio have new offered prices heard at around $955/t-$985/t for quantities of SN 150, with SN 500 and 600 at $990/t-$1,025/t on a CIF basis. 

Tupras will make an announcement regarding the operation at Izmir refinery and specifically regarding the production of base oils. Whether this company will continue to produce Group I base oils at that plant remains to be confirmed when the notice is made around the end of February.

Group II prices ex-tank for material from a variety of sources and imported into Turkey for resale remain unchanged. They are 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, which are sold on an FCA basis for partly-approved grades, are reassessed at €1,865/t-€1,900/t. Fully-approved Group III grades delivered into Gemlik from Cartagena in Spain will be priced at around €2,250/t-€2,300/t FCA. A small cargo of 1,000 tons loaded out of Spain for discharge in Gemlik.

Middle East

Red Sea reports show a couple of large cargoes. One of 19,000 tons is going into three U.A.E. ports – Hamriyah, Fujairah and Jebel Ali – and another of 15,600 tons will discharge in Mumbai and another west coast Indian port. These cargoes will load out of Yanbu and Jeddah.

In addition to the large Red Sea cargo for the U.A.E., smaller parcels from Rayong in Thailand will arrive into Hamriyah and Ras al Khaimah in the U.A.E. with 2,000 tons of Group I grades. The cargoes are additional to the Indian cargoes from Haldia and Chennai which are still planned to arrive in Hamriyah during February. Other cargoes are being examined for importing Group I base oils from Indian sources going into Hamriyah and Ras al Khaimah. This is odd since this is against the usual trade route, in fact these cargoes are reversals of the normal shipping flow which would go from the U.A.E. to India. 

The large cargo of Group I base oils coming from Livorno to the U.A.E. was fixed with the vessel loading at the end of January with expected estimated time of arrival 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 were quoted to this report with FOB numbers around $685/t for SN 150, SN 500 at around $805/t and bright stock around $1,012/t. These levels are very keen and would produce indicative delivered prices at around $795/t for the SN 150, $915/t for the quantity of SN 500 and bright stock at around $1,120/t CIF U.A.E.

Other alternative Group I base oil cargoes are offered from mainland Europe and U.S. Gulf Coast, with options for discharge into the U.A.E. or, alternatively, the west coast of India. Russian offers for supplies from Kaliningrad are on the table for both destinations, with Russian suppliers Lukoil or Litasco offering exceptionally low numbers 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 sailing time from Baltic to the U.A.E., tying up capital for an unacceptable length of time.

The second 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, first call at Yanbu, then final discharge in Jebel Ali. This cargo will commence loading in Rotterdam in the next day or two and will ETA into the U.A.E. around mid-April.

Two cargoes will load either from Ras Laffan or from Sitra. The first cargo will load about 10,000 tons for Stasco/Shell and will discharge into a west coast Indian port, considered to be Mumbai. The second cargo also loading for Shell will proceed to Antwerp-Rotterdam-Amsterdam. Both cargoes will either have gas-to-liquid Group III+ grades or material from Sitra refinery in Bahrain.

Netbacks for partly-approved and non-approved Group III base oils loading out of Al Ruwais and Sitra are altered upwards this week with selling prices in regional markets higher than originally thought. Netback returns are now assessed at $1,745/t-$1,795/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. Netback levels are derived from regional selling prices, less marketing, handling and estimated freight costs.

Group II base oils selling FCA basis in the U.A.E. may 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 are taken lower with levels at $1,495/t-$1,545/t for the light vis grades, with 500N and 600N at $1,495/t-$1,545pmt. 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 which 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, around 20,000 tons in total. ExxonMobil will also deliver 6,000 tons of Group I base oils to receivers in Conakry and Abidjan. The cargo will be comprised of three Group l grades – SN 150, SN 600 and bright stock.

Another Lukoil cargo of up to 10,000 tons from Svetly terminal in Kaliningrad is being evaluated for receivers in Apapa, but currently the enquiry remains as a shipping enquiry and may not go ahead. This may be due to letters of credit not being forthcoming from local banks in Lagos. The problem is anticipated to be the letter of credit from the local Nigerian bank, there could be delays to the banking instrument which is regulatory for 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. It has been postulated that this cargo would be made up of Group II grades, but this is thought to be unlikely because no Group II base oils have ever been imported into Nigeria. Local blenders would not have formulations to be able to use Group II in the blending, hence it is considered unlikely that this movement will proceed.

The shipping enquiry for 10,000 tons of Group I base oils to load out of a West Mediterranean port for Lagos does not appear to be taking place. Traders confirmed that they are still awaiting the issuance of the letter of credit from the local Nigerian bank. The usual tales of lack of foreign currency are being blamed. Offered prices for this cargo are higher than Baltic Russian prices and may be around $1,050/t for SN 150, SN 500 is estimated at around $1,100/t, and SN 900 is priced at around $1,125/t.

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/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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