Weekly EMEA Base Oil Price Report


European, Middle Eastern and African base oil markets are evolving on a number of fronts, with Europe’s Group I export market disappearing, activity in the Middle East slowing because of Ramadan and Europe’s Group III market possibly headed for a glut.

Now in its second week, Ramadan is slowing business from Turkey to the United Arab Emirates and Oman – markets that were already suffering a drag due to transportation disruptions caused by Israel’s war in Gaza and Houthi rebel attacks on ships crossing the Red Sea.

The impacts from the fasting period may continue until after the Eid holiday that follows the end of Ramadan. Many Middle East residents take the opportunity to travel during the period, and market contacts were few on the ground this week.

Back in Europe, API Group I supply is lurching toward a shorter scenario because of the closing of the base oil plant at Eni’s refinery in Livorno, Italy, and because of a fire at ExxonMobil’s Port-Jerome refinery, which also makes Group I oils. Supply of Group I and II could be affected by looming maintenance turnarounds at a number of European refineries. These developments seem to be creating upward pressure on European prices in both segments.

Long a net exporter of Group I, Europe could become a net importer of the grade, but it is unclear from where imports would be sourced. The United States tends to send its limited surplus to areas such as West Africa, the Middle East Gulf and India. Meanwhile, the shipping problems in the Red Sea will make it uneconomic to import Group I from Asia-Pacific.

Group III remains in plentiful supply around Europe, but with shipping disruptions interfering with deliveries into markets such as Turkey and Israel, secondary supplies on feeder vessels may start to operate from Antwerp-Rotterdam-Amsterdam and Mediterranean hubs going into East Mediterranean markets that are inaccessible for sources in Malaysia and the Middle East Gulf.

Additionally, there will be a surge in supplies of Group III base oils hitting the European markets during the remainder of March and going into April. These arrivals of replenishment cargoes may fuel a glut of Group III and downward pricing pressure.

There are many unknowns and hiccups in supply chains right now, with many blenders working on a hand-to-mouth approach when purchasing base oils for future production of finished lubricants. There are many uncertainties arising from the two major conflicts in Ukraine and Gaza, with longer term planning being deserted in many cases.

With major elections coming up in the U.S., the United Kingdom and Turkey, and after Vladimir Putin’s re-election in Russia the landscape for commercial activity could undergo significant shifts this year and next.

After recently weakening, crude oil prices reversed course the past week, rising sharply. Production cuts by OPEC+ nations have yet to take effect, so further spikes could be coming.

Dated deliveries of Brent crude reached $87 per barrel Monday, for May front month settlement, up nearly $6 from the previous week. West Texas Intermediate rallied more than $5 to $82.95/bbl, still for April front month.

Low-sulfur gasoil followed a similar track, climbing more than $40 to $860 per metric ton, now for April front month. All of these values were obtained from London ICE trading late March 18.


It has been decided to stop discussing European Group I exports in this column, and to halt reporting of nominal or hypothetical prices for a market that does not exist. It’s true that international oil majors continue to ship large quantities of all types of base oil to distant markets for use in local blending operations.

Some readers have suggested that these movements should be classed as exports, but such cargoes are being arranged on an affiliate-to-affiliate basis, with no traders in between. As such, any payments involved do not reflect market forces.

For the sake of good order, it is reported this week that there are no further availabilities from Eni’s Livorno, Italy, refinery, and that no further supplies of Group I base oils will be made available from that source.

Prices for Group I oils being sold in Europe are firming as availabilities start to go shorter due to the permanent closing of the Livorno base oil plant. Some suppliers in Spain have imposed markups. Prices for some Group I base oils in the region have for some time been below feedstock costs, and this situation is now evolving.

A number of traders are looking to import cargoes from the U.S. or any other available source that makes economic sense. This may be a sign of where the Group I market in Europe is heading.

Buyers are now reversing previous decisions to ditch term contracts in favor of purchasing on the spot market. Spot buying is starting to become unreliable, and lack of availabilities may start to develop. Sellers are not rushing to reinstate contracts, able as they are to sell all availabilities to regular customers.

The good news is that demand for finished products remains slow, making the tightness of availabilities easier to cope with. Should the market return, however, to a positive demand scenario, Group I users may encounter problems.

Some prices for Group I sales in Europe moved higher the past week, with solvent neutral 150 now assessed between €955 per ton and €1,000/t. SN500 is at €985/t-€1,055/t and bright stock at €1,175/t-€1,240/t.

The dollar exchange rate to the euro came in at $1.08875 Monday.

The firming of Group I values in Europe has helped stabilize Group II prices in the region by dispensing with constant requests that the Group II premium to Group I had grown excessive. With a major maintenance turnaround starting in Rotterdam, the market appears to be sensing that Group II base oils could follow the path of Group l, but a broader view suggests that Group II will become the standard workhorse base oil type in the European market.

Imports from Asia-Pacific sources are at least on hold and may be cancelled because the costs of detouring around the southern tip of Africa makes them uncompetitive on price. U.S. producers, however, are maximizing exports to Europe, since margins are healthier in that region and demand may be returning.

The Group II premium to diesel decreased slightly the past week due to increases for diesel, but it remains relatively normal. 

Group II prices are unchanged this week at €1,020/t-€1,065/t, ($1,105/t-$1,155/t) for 100 neutral, 110N and 150N, at €1,055/t-€1,100/t ($1,145/t-$1,195/t) for 220N and at €1,175/t-€1,230/t ($1,270/t-$1,345/t) for 600N. These prices apply to a range of Group II oils from Europe, the U.S. and Red Sea sources, all imported in bulk.

Group III European markets are in a dilemma over the increases to costs of shipping material from the Far East and the Middle East Gulf. Under normal conditions these costs would be passed on to customers, incoming shipments could soon create a glut and make it difficult to do that. Middle East Gulf producers have offered extra cargoes due to the decline in markets such as China, where new production is eroding supply positions for imports.

It was reported this week that Neste’s refinery in Porvoo, Finland, will continue to have availabilities of Group III base oils despite a national strike scheduled to continue until March 25. Some cargoes will be affected.

European prices Group III oils with partial slates of finished lubricant approvals or without approvals are unchanged at €1,555/t-€1,595/t for 4 and 6 centiStoke oils, while 8 cSt is at €1,565/t-€1,600/t, all on an FCA basis ex Antwerp-Rotterdam-Amsterdam and Northwestern Europe.

Two suppliers offer material at lower numbers, in the range of €1,320/t-€1365/t, but these levels are not included in the range reported above. Specifications for one of those sources is lower than the rest of the market as its 4 cSt grade has a viscosity index of 124.

Prices for rerefined 4 cSt are unchanged at €1,445/t-€1,495/t, on an FCA basis ex rerefinery in Germany.

Prices for Group III oils with full slates of approvals are at €1,685/t-€1,725/t for 4 and 6 cSt and at €1,715/t-€1,745/t for 8 cSt, all on an FCA basis ex hubs in Antwerp-Rotterdam-Amsterdam, Northwestern Europe and Spain.

Baltic and Black Seas

In the Baltic, a large cargo of around 8,000-10,000 tons loaded, probably out of Saint Petersburg for receivers in Nigeria. This is the second Russian export cargo that will have gone into Apapa this year, following talks that Nigerian receivers were not keen on taking Russian barrels, because of possible or potential sanctions being imposed. It is unclear who would impose such sanctions, since Nigeria has not joined the allied cartel that has banned the imports of any Russian hydrocarbon derivatives. Formerly, these parcels would have been loaded out of Svetly terminal in Kaliningrad, which apparently has ceased operating.

Russian cargoes moving to the United Arab Emirates and Singapore will be given safe passage through the Bab-al-Mandeb Strait by Houthi rebels, and it is expected that Russian exporters will ramp up cargoes to the U.A.E. on the back of this arrangement. Offers for Russian material were heard in India, although to date it is considered that no Russian base oils entered this market. India is importing huge quantities of Russian crude, and because of this crude surplus, Indian refiners are able to produce excess quantities of base oils. Some of those are being offered to traders for importing into West Africa. This arbitrage could be open, since another Russian base oil cargo was imported into the U.A.E. and then re-exported to Nigeria.

It is thought that FOB prices from Haldia and also FOB Hamriyah are very low and would be competitive even with high freight rates, to go into Apapa.

The Lotos material in Gdansk did not sell to export, because prices were considered to be too low. This material was distributed into the local domestic market, where demand is rising against some of the low availabilities occurring in Northern Europe.

Russian FOB prices for SN 150 and SN 500 from St. Petersburg are indicated at extremely low levels, $505/t-$520/t for SN 150 and SN 500 at around $530/t. SN 900 can be made available at around $565/t, using Russian SN 1200 or quantities of low-specification Russian bright stock blended with either SN500 or SN 150 to obtain the correct viscosity. Other specifications, such as color and viscosity index, are not known.

Turkish base oil markets have a continuing influx of Russian base oils, but with comments from a number of blenders that there is poor demand for finished lubricants in Turkey. Lower-priced lubes are flooding markets in Iraq and Jordan, coming out of the U.A.E. They are transported by trucks going cross-borders through Saudi Arabia, Kuwait and Iraq, with most container traffic through the Red Sea suspended.

Inflation levels are still high in Turkey, with the Central Bank pushing interest rates higher to contain the levels. Russian base oil imports are thought to be conducted on a government-to- government basis, payments may be made in rubles purchased from Russia in dollars.

Russian imports of SN 150 and SN 500 are moving from the Baltic, discharging into Gebze port. These imports are in addition to material coming out of Volgograd refinery. Cargoes for the U.A.E. are loaded out of Limas terminal, where Russian charterers are able to take Turkish-flagged vessels to deliver cargoes.

Tupras restarted production of Group I base oils at Izmir refinery. Tupras issued new prices which are still valid.

Levels ex-refinery: spindle oil is priced at $965/t (Tl 31,116), SN 150 at $907/t (Tl 29,269), SN 500 at $861/t (Tl 27,784) and bright stock at $1,028/t (Tl 33,167). Prices in Turkish lira are ex-rack plus a loading charge of Tl 5,150/t.

Group II ex-tank prices are maintained at around €1,175/t-€1,195/t for the three lower vis grades – 100N, 150N and 220N – with 600N at €1,385/t-€1,475/t. Group II grades may be sourced from the Red Sea, the United States, South Korea or Rotterdam, although there will be problems in getting Red Sea and South Korean barrels due to the Houthi situation in Yemen.

Partly-approved Group III base oils are FCA, with Tatneft 4 cSt grade priced at around €1,420/t. Supplies that previously arrived from the U.A.E., Bahrain and Asia-Pacific remain at €1,575/t-€1,620/t FCA. It remains unclear how supplies from the Middle East Gulf and Far East will be affected. That’s because it may become uneconomic for cargoes to be re-routed via the Cape, then through the Mediterranean before discharging in Turkey. As an alternative smaller feeder cargoes may load in Antwerp-Rotterdam-Amsteerdam, following discharge of a main cargo, although this exercise wil not be without extra costs.

Fully-approved Group III grades delivered into Gemlik from Spain and resold on an FCA basis have prices maintained at €1,920/t-€1,965/t FCA.

Middle East

Red Sea reports were of major disruption to base oils loaded out of Yanbu and Jeddah, which would normally be destined for the west coast of India, the U.A.E. and Pakistan. Luberef is experiencing difficulties in finding vessels to load cargoes, and cargo movements are being significantly affected by Houthi rebels’ action in the Bab-al-Mandeb Strait. Saudi Aramco made representations to the Saudi Government and Armed Forces to assist in getting vessels safely through the Red Sea. The problems are exacerbated by vessel owners not willing to endanger vessels or crew in attempting the transit.

Some ships from the Mediterranean and northwest Europe are making the Suez transit to discharge chemicals and other clean petroleum products into Yanbu, Jeddah and other northern Red Sea ports. These vessels are then loading base oils from Yanbu and Jeddah for Sudan, Jordan, Egypt and Europe, avoiding the southern end of the Red Sea, where the Houthi rebels are active out of Yemen.

Middle East Gulf regions are quiet due to Ramadan. Reports from sources in the U.A.E. can confirm that Saudi cargoes from Luberef are delayed and cancelled, with few large cargoes discharging into ports such as Fujairah, Jebel Ali, Ras Al Khaimah and Hamriyah. Reasons are given as a lack of vessels prepared to make the transit through the Bab-al-Mandeb Strait.

There were no further reported attacks that have been lethal in killing crew members. Russian cargoes will be granted safe passage, as will Chinese-flagged ships, allowing some container traffic to flow to receivers in countries such as Turkey and Egypt.

Russian base oils continue to be delivered into the U.A.E., with prices indicated at around $610/t for SN 150, with $640/t for quantities of SN 500. A large parcel of up to 12,000 tons loaded from Limas terminal in Turkey for regular receivers in Hamriyah. No further cargoes appear to have been imported into the U.A.E. and then re-exported to Nigeria, although this practice is essentially feasible even with high freight rates, given the low FOB levels that can be achieved. This happened during last year, when a cargo was loaded for Nigeria with SN 150, SN 500 and SN 900, sailing with a certificate of origin from the U.A.E. This cargo was sold to receivers in Apapa. The prices had to be exceptionally low to be able to convince buyers to pay for the cargo in advance.

Group III netbacks for partly-approved base oils from Adnoc and Bapco were taken lower a couple of weeks back, following vessels loading for Europe and the U.S. Levels are maintained due to higher costs for freights to the U.S. and Europe. Local selling prices remained steady. Distributors are responsible for chartering vessels to carry cargoes from Bahrain and Abu Dhabi, and they will negotiate with producers on the premise that distributors’ margins remain the same. FOB prices will require adjustment.

Netbacks are indicated at $1,460/t-$1,510/t, for the 4 cSt, 6 cSt and 8 cSt partly-proved and non-approved Group III grades. Netbacks for gas-to-liquid Group III+ base oils from Ras Laffan in Qatar remain at around $1,475/t-$1,525/t due to larger cargo sizes providing lower freight rates.

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

Group II base oils sold ex-tank in the U.A.E., or sometimes on a delivered basis by truck in the U.A.E. and Oman. Prices are adjusted higher due to increased freight costs from the United States and Europe, while few cargoes are arriving from Yanbu, shorting the market at a time when demand is relatively high.  Levels are now at $1,685/-$1,725/t for 100N, 150N and 220N, with 600N at $1,775/t-$1,825/t. The high ends of the ranges refer to road tank wagon deliveries to buyers in the U.A.E. and Oman.


South Africa shipping agency sources suggest that a cargo from Singapore will be used to supply receivers in Mombasa and Dar-es-Salaam, thus avoiding the Red Sea transit. They added that the vessel would chart a course well away from the Yemeni coastline but would have armed guards on board to protect the crew, should there be any interference from Houthi rebels. A large base oil cargo will load in April for discharge into Durban. The parcel is to be comprised of around 19,000 tons of base oils, but the exact quantity will depend on the vessel chartered. The current cargo is comprised of around 18,000 tons of Group I, Group II and Group III base oils, plus a small quantity of easy chems.

A large 8,000-10,000 tons cargo loaded out of the Baltic Sea with three grades of Russian export barrels. As usual for Apapa, three grades – SN 150, SN 500 and SN 900 – will make up this cargo. It is considered that the same trader who handled a smaller cargo in December and January will be organizing this delivery. Dates are not disclosed, but it is thought that the cargo loaded during the first half of March, with estimated time of arrival into Apapa around mid-April. The original cargo loaded out of Vyborg, but from sources close to Baltic traffic, this current parcel may have loaded out of St. Petersburg.

Reports were that some Nigerian receivers were not keen to take further Russian cargoes for fear of reprisals or sanctions and also a reluctance of some blenders to buy these base oils, knowing that they are of Russian origin. The cargo loaded out of Hamriyah in the U.A.E. were comprised of Russian base oils and was completed last year.

There are reports of Indian and U.A.E. material lined up for a further cargo into Nigeria, but this is only at the discussion stage, and no vessel or dates have been mentioned.

The large 18,000-tons cargo from U.S. may either have arrived in Apapa or will be discharging during the next few days. The cargo has been sold to more than one receiver in Lagos. Landed prices are confirmed in the ranges below, but future cargoes from U.S. will have increased prices from April onwards. The offers of Russian material are depressing prices at the moment, with traders involved not willing to raise offered levels to a more appropriate level. 

The naira exchange rate remains a problem, with the latest rate at 1,562 naira to one U.S. dollar. 

CFR Apapa prices remain indicated in the same ranges this week. They are at around $930/t-$950/t for SN 150, $1,000/t-$1,020/t for SN 500 and SN 900 at around $1,040/t-$1,060/t.

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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