EMEA Base Oil Price Report


Crude oil prices are falling again, even though demand is forecast to rise as China emerges from last year’s COVID-19 crisis. This spike in demand is largely being met by a steady stream of Urals crude from Russia, with Saudi Arabia also contributing to the increased demand from Chinese centers.

Some predictions are that crude demand could outstrip supplies later this year due to Russian cutting back on production and few details of any increases from other major suppliers. If this happens then the market could see another rise in crude values all of which will pile the pressure on base oil prices to move higher.

This has already sarted to happen in Europe, where Group I prices are moving upwards, having been very low for some months. Producers have said that they need to move numbers higher to establish a premium to diesel which has been missing over the past few weeks, in fact Group I base oil prices have been substantially below diesel levels, and this situation is not acceptable to refiners around Europe.

Conversely, Group II prices have fallen again after a surprise decision by one of the major players to cut prices again, this being the third tranche of discounts since last November. It is believed that other players in thei part of the market will fall into line with the new levels, since protection of market share is paramount to alll participants in this market.

The other rather strange situation is that many blenders are still not rushing to purchase large quantities of any type of base oil, with only Group III being in demand with allocation being applied to many customers buying fully approved material from the two main suppliers in Europe. Anything from 50% to 85% of last years offtake is being applied to many users, limiting the quantities of finished lubricants being produced. WThis time of year is normally when demand surges ahead of the busy Spring and Summer seasons in the northern hemisphere.

Group II base stocks are in abundance across Europe at this time, with low demand and sellers desperate to move as much material as possible in the short term, This perhaps explains to decreases in Group II prices, with sellers trying to attract buyers to take more of these grades.

There may be some added pressure to produce more base oils after the diesel premium to crude fell to the lowest level for some years, but with diesel demand still high in Europe following the Russian import ban there is a dichotomy of opinion between refiners as to which direction to take, maintain production of distillates or switch to ancillary grades such as base oils and waxes. There is no clear path for refiners around Europe at the moment, and it may take some time to evaluate the markets following the cessation of Russian hydrocarbon imports from early February.

There is also the prospect of a number of turnarounds starting during the next few months which could affect availabilities of all types of base oil, These maintenance periods could tighten the base oil markets and could lead to many buyers making a speedy return to purchasing larger quantities of base oil, replenishing inventories which are at record lows. Export markets may be the first to show any signs of the Group I and Group II markets starting to become leaner, with product being allocated to domestic requirements rather than having a surplus which otherwise would be targeted at regions such as West Africa and Middle East Gulf.

With a lack of Russian barrels emanating from the Baltic other suppliers will have to take up the baton to service traditional export destinations, which could shorten up the Group I scene further. Many ot these factors are unknowns at this stage, with players waiting on the side lines to see which way the markets will turn.  

Crude prices have weakened marginally over the week and are only slightly lower than levels last reported. Forecasts are that crude may start to shorten further in to this year, opening the doors for prices to move upwards. This is no certainty that this situation will occur, with some players suggesting that there will be no shortage of crude supplies, with Russia selling discounted barrels to large receivers in China and India. Sleeing prices as low as $40 per barrel have been heard in India and China.

dated deliveries of Brent crude currently posts at $82.90 per barrel in respect of April front month, almost exactly the same level as last week. West Texas Intermediate crude is sitting at a level of $76.75 per barrel, maintaining the crack at $6. West Texas Intermediate crude prices are also in respect of April front month.

Low-sulfur gas oil prices steadied the past week, rising slightly to $826 per metric ton for March front month. All of these prices were obtained from London ICE at the close of Feb. 27.


Prices for API Group I exports from Europe moved a little higher over the past few days, with sellers intent to recover to levels which are acceptable to refiners. The main protagonists in this sector are still missing, and with elections taking place in Nigeria last weekend, this market has virtually closed down, due also to the problems with foreign currency and the issuance of letters of credit for all petroleum imports, including base oils.

Prices are taken higher by some $20/t-$30/t from last week, and may continue to track upwards over the next few weeks. The market has certainly bottomed out a couple of weeks back with some very low prices being heard from suppliers in the Mediterranean These levels are not to be repeated with suppliers generally moving offers higher. However there are not many offers to traders being heard or seen at the moment with the large cargoes being done by majors who are rebalancing stock in various regions around the globe.

With few trades taking place, FOB prices are pushed slightly higher in the few offers from suppliers heard during last week. At the Argus conference in London last week there appeared to be a consensus view that Group I prices would start to move higher over the next few weeks, perhaps with demand starting to grow towards Spring. SN150 is now assessed between $925/t-$975/t and SN500 is placed between $945/t-$995/t. Bright stock is between $1095/t-$1140/t.

Group I domestic markets in Europe are perhaps starting to react to the possibility of higher prices creeping into the markets, with some buyers actively seeking to take larger quantities of Group I base oils than during the last few months. Buyers have seen that prices are due to start rising, perhaps not by significant amounts but nevertheless levels are not to be as low as in the past few weeks.This lifts Group I prices closer to new Group II, narrowing the gasp which had been a bone of contention with a number of buyers around Europe.

With the added pressure of no Russian barrels coming out of the Baltic and coming into the EU, prices are reflecting a tighter supply scene, and the potential for the Group I markets to go shorter in the furture. With a string of turnarounds happening over the next few months and perhaps export markets picking up again, European local markets may see few long suppliers with barrels to spare in storage. March prices are pitched around €1090/t-€1130/t for SN150, with SN500 between €1145/t-€1185/t and bright stock at around €1400/t.

The euro is weaker against the dollar, posting this week at $1.05808. Because of few deals in the export markets and the new March prices coming in this week, the differential between domestic and export pricing is moved, being assessed between €120/t-€210/t, domestic prices being higher.

European Group II prices have fallen again during last week with one major seizing the initiative to introduce discounts to this market to try to stimulate demand for Group II grades. The reasoning behind the discounting to prices is purely to generate sales of Group II grades, with the differential between Group II prices and Group I base oils narrowing, with Group I levels rising and Group II falling,

A cargo of 4,000 tons of light Group II grades has loaded out of Yanbu and will discharge into storage in Le Havre. This is a regular supply to the producer In northwestern France.

Prices in respect of Group II base oils are lower and are now assessed between $1045/t-$1050/t (€990/t-€1000) in respect of the three light vis grades (100N, 150N and 220N), with 600N between $1270/t-$1290/t (€1200/t-€1220/t).

Prices are in respect of an extensive range of Group II base oils, including European, U.S., AsiaPac and Middle East Gulf sources, supplied either in bulk or in flexi-tanks.

European Group III markets remain strong with demand outstripping availabilities in many instances. Allocation programs have been introduced by a couple of main suppliers, limiting offtake of 4 centiStoke and 6 cSt grades to between 50%- 80% of last years’ comparative purchases. There could be further shortages to come during the summer period, but new participants from Asia-Pacific are starting to filter into the lucrative European markets with prices for 4 centiStoke material around €1,850/t. Other suppliers from Middle East Gulf cannot increase quantities available for the European market, limiting the absolute quantities of Group III base oils available to blenders in this arena.

Group III markets remain very tight, and are no longer in balance, with a marked shortfall on the supply side, particularly for fully-approved grades. Prices for in respect of partly-approved Group III base oils are pushed higher to €1780/t-€1850/t for 4 and 6 centiStoke but are slightly lower for 8 cSt at €1765/t-€1785/t, all on an FCA basis ex Antwerp-Rotterdam-Amsterdam or Northwestern Europe.

Fully-approved Group III base oil prices remain unchanged, at €2,050/t-€2,100/t for 4 and 6 cSt and at €2,075/t-€2,125/t for 8 cSt. These levels refer to FCA sales from hubs in Antwerp-Rotterdam-Amsterdam, Northwestern Europe and ex refinery sales from Finland and Spain.

Baltic and Black Seas

Baltic trading shows three potential cargoes being offered from Svetly terminal in Kaliningrad. The cargoes are large parcels of Russian export grades – one offered to receivers in the United Arab Emirates and the other two organized for buyers in Gebze in Turkey. The latter two cargoes may be as much as 12,000 tons each, while the parcel for Hamriyah is also possibly as much as 12,000 tons. Offers for these parcels were heard in the U.A.E. and Turkish markets and are being evaluated currently. Indian buyers have also been approached, but so far no Russian barrels have gone into the west coast Indian markets. Freight costs will be high for these cargoes hence the large quantities to offset the charges. Logistics are a problem for cargoes from the Baltic, and apart from the high freight rates, voyage time is also a negative. Other suppliers have the edge when it comes to chartering a vessel, because Russian charterers are limited by the vessels available to them due to the G7 and European Union ban on Russian charterers.

Russian refiner Lukoil will be the seller to receivers in Gebze and Hamriya, and will ship base oils from Kaliningrad. 

Southern Baltic activity is mooted at present with Gdansk suppliers Lotos not having any prompt availability at this time.

Baltic FOB prices from Svetly for SN 150 are maintained at existing levels at $685/t-$735/t, with SN 500 considered at $755/t-$785/t. Prices are offered as indications only.

FOB prices for of Group I material from PK Orlen out of Gdansk later this month are classed as part of the European mainstream pricing, with SN 150 assessed at $930/t-$975/t, with SN 500 at $955/t-$1,000/t, depending on destination. Bright stock is assessed at $1,100/t-$1,155/t.

Black Sea and East Mediterranean trade sees Turkey continuing to import large quantities of Russian Group I base oils, with the two potential cargoes of around 12,000 tons each contemplated for early March. These cargoes will discharge into Gebze port. Turkey is regularly importing around 40,000 tons of Russian base oils every month. Prices are competitive, and with Russian suppliers keen to preserve this outlet for base oils, they ensure that Turkish buyers receive attractive low prices to maintain this trade route. However, there are other offers for Group I cargoes coming out of Livorno and Aghio, and another deal will see 2,700 tons of what could be white oils coming into Turkey from Port Jerome in northeast France.

The parcel of 5,000 tons is assembled through Batumi port, possibly coming out of Volgograd refinery, because the Volga River is closed due to ice. Base oils are transported by road into Batumi and then delivered into Limas terminal in Turkey. The cargo may then be re-shipped to either the U.A.E. or India.

The cargoes from Livorno and Aghio, with one parcel of around 6,000 tons loaded out of Livorno in early February and another parcel of 5,000 tons from Aghio that loaded last week. Some blenders cannot just use Russian quality base oils for their whole slate and are required to take quantities from ENI and MOH as higher spec base oils to produce finished lubricants.

Imports from Livorno and Aghio have offered prices heard at around $960/t-$985/t for quantities of SN 150, with SN 500 and 600 at $995/t-$1,025/t on a CIF basis. Bright stock may be offered from Livorno, with a suggested price of around $1,170/t CIF Gebze. 

The Tupras announcement has yet to happen but is to be sometime this week, with that announcement thought to concern the future of base oil production at Izmir refinery. At the moment, production of base oils has stopped and there may be a case for not restarting production of that line.

Group II prices ex-tank are taken lower and are now assessed at €1,285/t-€1,365/t for the three lower vis products – 100N, 150N and 220N – with 600N at €1,490/t-€1,535/t. Supplies of Group III grades arrive from the Red Sea, the United States and South Korea.

Group III partly-approved base oils, sold on an FCA basis, are assessed at €1,865/t-€1,900/t. Fully-approved Group III grades delivered into ports such as Gemlik from Cartagena in Spain are priced at around €2,250/t-€2,300/t FCA.

Middle East

Red Sea shipping news is that in addition to the 4,000-ton parcel moving from Yanbu to Le Havre, smaller cargoes are being sent to Egypt and Singapore. The usual large cargoes will also move material from Yanbu and Jeddah to the U.A.E. and the west coast of India to Mumbai anchorage.

The large Red Sea cargoes of around 18,000 tons going into the U.A.E. will discharge during the first half of March, while additional parcels of 4,000 tons and 2,000 tons from Rayong in Thailand will arrive into storage in Hamriyah and Ras al Khaimah, respectively. Ras Al Khaimah appears to be playing a more prominent role in the storage and shipping facilities within the U.A.E., with a cargo of Iranian rubber process oil moving out of this port for a Far East destination. Also as reported previously, a number of parcels are going against the “normal” trade flow, coming into Hamriyah from Chennai. This prompt cargo is due to load this week, with 5,000 tons of Group I base oils for receivers in the U.A.E.

The 10,000-ton cargo of Group I base oils coming from Livorno for receivers into the U.A.E. has an expected estimated time of arrival around mid-March. The cargo is made up of three grades of Group l base oils – SN 150, SN 500 and bright stock – and is being traded by a company based in Geneva.

Prices heard are that FOB numbers were around $685/t for SN 150, SN 500 at $805/t and bright stock at $1,012/t. On the basis of average freight rates, these levels would indicate CIF prices at around $795/t for SN 150, $915/t for SN 500 and bright stock at around $1,120/t CIF U.A.E. These numbers will compete against the Russian barrels from Lukoil from Kaliningrad, which are also offered to receivers in the U.A.E.

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 west coast India. Russian offers for supplies from Kaliningrad are made in addition to the same supplier offering 5,000 tons out of Limas terminal in Turkey. Russian suppliers Lukoil or Litasco are offering exceptionally low numbers to maintain a presence in the U.A.E. market, while at the same time break into the Indian market. Specification can be an issue, with lower viscosity index and darker color than alternative supplies from Europe or the U.S., but prices for the Russian grades 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 around five weeks, which can be an unacceptable length of time for buyers.

The second ExxonMobil cargo of 12,000 tons loaded out of Rotterdam and has sailed to top-off in Sicily with a combination of Group II and Group I base oils. The vessel will call at Yanbu, then finally discharge in Jebel Ali.

A cargo will load 5,000 tons of Group III base oils from Sitra refinery in Bahrain and will proceed to a nominated port in Southeast Asia. A further cargo of 6,000-7,000 tons will come out of Al Ruwais for Adnoc before sailing to Nantong in mainland China, where the appointed distributor will receive the parcel into storage.

Netbacks for partly-approved and non-approved Group III base oils loading out of Al Ruwais and Sitra are maintained. Netback returns are 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, margins, handling and estimated freight costs.

Group II base oils selling FCA basis in the U.A.E. are 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 modified this week, with levels at $1,420/t-$1,465/t for the light vis grades, with 500N and 600N at $1,495/t-$1,535/t. The high ends of the ranges refer to road tank wagon-delivered base oils.


South African shipping sources notified this report that the large cargo of base oils and chemicals loaded out of Rotterdam and Fawley and is in route to West Africa and then onwards to Durban to discharge around 20,000 tons of product. The vessel will first deliver 5,000 tons of three Group I grades to receivers in Tema in Ghana. The same major will also to deliver 6,000 tons of Group I base oils to Conakry, Guinea and Abidjan in Cote d’Ivoire. A further large cargo of some 20,000 tons loaded out of Rotterdam and Fawley for Durban and Mombasa.

Nigeria was in the throes of national elections this last weekend, with all the political and organizational turmoil imaginable. One candidate was shot while the anti-corruption lobby has been out and about trying to eradicate foul play. The hope is that a new government will provide to conduit for the banking system to improve and gain access to foreign currency, which has been a major stumbling block to transacting business in Nigeria.

The Lukoil cargo of 10,000 tons from Svetly has still not been confirmed and remains under evaluation for receivers in Apapa. This may be due to ongoing current problems in Nigeria with both foreign currency and also with local naira – both are impossible to lay hands on. The problem is anticipated to be the letter of credit from the local Nigerian bank, as there are severe delays to the banking instrument that is regulatory for all imports going into Nigeria.

Prices for offers for both Russian Baltic supplies and also material sourced from the Med may be around $1,075/t for SN 150, SN 500 is estimated at around $1,125/t, and SN 900 is priced at around $1,165/t. There are delays to the letter of credit, however, and without that issuance, cargoes will not load.

CFR levels for base oils discharging in Apapa are given as indications only, and are given purely on the basis of interest, since no trades are being finalized at this time. Prices refer to previous cargoes that arrived into Apapa.

Levels are assessed at $1,000/t for SN 150, SN 500 at around $1,050/t, and SN 900 at $1,095/t. As an indication only, bright stock is assessed at around $1,220 pmt CFR Apapa. Bright stock will have been 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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