EMEA Base Oil Price Report


The main news topic this week is the escalation of attacks against merchant shipping in the Red Sea corridor, and retaliatory strikes against the Houthis in Yemen by an allied coalition, led by the United States and the United Kingdom.

Allied forces struck a number of targets within the Houthi-controlled part of Yemen in an effort to negate the rebels’ abilities to launch missile and drones targeted at both commercial and naval vessels in the Bab-al-Mandeb Strait between the Red Sea and the Gulf of Aden. Houthis claim that they are only targeting vessels with ties to Israel, but in reality, any vessel in the area is in danger of attack.

This narrow channel – around 50 kilometers across – is a necessary transit for vessels moving in both directions through the Red and the Suez Canal to points east and west.

The latest news is that on Monday a U.S. registered merchant ship was hit on the port beam by munitions launched by the Houthis. No significant damage and no injuries have been reported, and the vessel continued passage to its destination.

The rebel activities caused a number of vessels to divert around the Cape of Good Hope in South Africa, increasing freight costs and creating significant delays to schedules and liner routes. Vessels moving goods to Europe and the U.S. are affected, as are ships moving in an eastward direction to the Middle East, the Indian subcontinent and the Far East.

Base oils are only one of the commodities affected by the Houthi attacks, with quantities of API Group I and Group II base oils from Europe and Red Sea sources coming under severe pressure to make voyages to maintain supplies to receivers in the areas mentioned above.

There are pressures building on supplies of Group III grades from Middle East Gulf sources in Abu Dhabi, Bahrain and Qatar. Replenishment cargoes from these supply points are vital to distributors in the U.S. and Europe. Additionally supplies of API Group III base stocks will also be affected coming from Malaysia, although that source is about to undergo a major maintenance turnaround at the refinery and may be short of material to ship on a prompt basis.

Apart from the obvious problems of potential attacks in the Red Sea, suppliers are finding it difficult to line up vessels to move base oil in bulk. Container traffic is also being badly affected in east-west and west-east movements, with shortages of containers affecting supplies of finished lubricants and additives from numerous sources.  

The increasing number of attacks in the Red Sea could have caused spikes in crude oil and petroleum product prices, but crude rose only a couple of dollars per barrel the past week. Crude prices have been stable despite efforts by some OPEC+ members to push them up, but those efforts have failed to gain traction due to slack demand from major importers, such as China and discounted supplies of Russian crude to markets such as India and China. 

Dated deliveries of Brent crude briefly crested $90 per barrel last week before settling back to $77.60/bbl, still for March front month settlement, exactly $2 higher than one week earlier. West Texas Intermediate rose to $71.95/bbl, still for February front month.

Low-sulfur gasoil prices followed a similar up and down trajectory to $779 per metric ton, some $30 higher than last week, for February front month. All of these prices were obtained from London ICE trading late Jan. 15.


The export sale out of Eni’s refinery in Livorno, Italy, was completed and the cargo has sailed for receivers purportedly to reside in the United Arab Emirates. The transaction was complex, with one trader making the purchase from Eni and selling the entire cargo to another trader based in the U.A.E.

It is still not clear which party chartered the vessel and exactly where and when ownership transferred. The cargo was a total of 7,000 tons Group I – 1,000 tons of solvent neutral 150, 4,000 tons of SN500 and 2,000 tons of bright stock.

The purchase prices were confirmed, setting new ranges for Group I export prices. FOB prices to the initial trader were index linked, setting SN150 $85 lower than the low end of the published range, equivalent to $665/t. SN500 was priced $130 lower than the low of the range, equivalent to $745/t, and bright stock was $165 lower, at $965/t. Details of the secondary transaction are private and confidential.  

European export prices remain as revised last week, taking into account the values above. SN150 is at $665/t-$810/t, SN500 at $745/t-$930/t and bright stock at $965/t-$1,195/t, all on an FOB basis.

Prices for Group I sales within Europe have come under pressure from buyers who are being incentivized to take larger quantities than perhaps they would have otherwise wanted. With discounts and temporary volume allowances being negotiated based on quantities lifted, or to be lifted during the remainder of January, there has been remarkable interest from the market to purchase. Levels have fallen, but still have some way to go to compete with the new export ranges.

Buyers continue to move away from longer term contracts, increasingly looking to the spot market to replenish inventories that were severely run down the past few months. Many buyers are stating that with plentiful availabilities around the Group I markets, and now with the re-establishment of an export market, there are few reasons to look at building large stocks, unless financial incentives are deployed by producers to move larger quantities out of storage.

Prices remain around the levels noted last week, although a number of deals have been done involving slightly lowe numbers, so SN150 prices are now at €780/t-€855/t, SN500 at €935/t-€1,025/t and bright stock at €1,210/t-€1,295/t.

The dollar exchange rate to the euro barely changed during past week and posted Jan. 15 at $1.09611. The price differential between Group I exports from Europe and sales within the region is tweaked to €135/t-€200/t, exports being lower.

European Group II prices are stable and steady as these grades being are not subject to supply chain problems related to the Red Sea. European production is in good shape and the flow of imports from U.S. likely to be maintained, so the market looks to be adequately covered.

On this subject, a cargo from the U.S. Gulf Coast will either have arrived into Antwerp-Rotterdam-Amsterdam, or will be arriving this week from one of the more aggressive sellers when it comes to price levels. It will be interesting to see where prices for this supply are to be pitched, since these oils were selling around €100/t-€125/t below other incumbent European sellers before Christmas.

The Group II average premium to diesel is still acceptable due to lower diesel prices, but the specter of a an ever-expanding differential between Group I prices and Group II numbers continues to weigh on both sellers and buyers minds. The market may see some pressure building from the buying community, quoting the difference in prices between the two base oil groups.

However, demand appears to remain relatively robust for Group II base oils and it is suggested by a number of sources that this will continue through the next few months, geopolitical and other world events notwithstanding.

With market share remaining a priority for sellers in the Group II market, the threat from Asia-Pacific imports into Europe may have at least temporarily abated with the Red Sea situation discouraging trades from coming from sources in the Far East. Also prices in those regions have moved upwards taking the shine off trying to export large quantities of these grades into the European arena.

Prices are unchanged this week at €985/t-€1,125/t ($1,065/t-$1,225/t) for 100 neutral, 150N and 220N and at €1,195/t-€1,320/t ($1,300/t-$1,440/t) for 600N. These prices apply to a wide range of Group II base oils from European, U.S., Asia-Pacific and Red Sea sources, imported in bulk and in flexi-tanks. In Europe, 100N and 150N are priced higher than 220N due to demand patterns and higher usage of the two lighter grades.

European Group III base oil markets may be in for a bumpy ride with doubts and uncertainties about the shipping of replenishment cargoes from the Middle East Gulf and Asia. The market could become tighter if the Red Sea issues disrupt supplies from Malaysia, the U.A.E., Qatar and Bahrain. At best, some shipments will be delayed by detours around South Africa’s Cape of Good Hope, adding around twenty days to voyage times for these types of ships. After Monday’s strike on the U.S. registered vessel, more and more shipments – including traffic in both directions – will be sent on this route. Increased insurance costs could cause a lack of vessels, compounding the problem.

There are problems shipping material from Far Eastern sources into Europe, so it is assumed that producers with European production will prioritize it for local markets.

Prices for Group III oils with partial slates of finished lubricant approvals or with no approvals are unchanged at €1,310/t-€1,400/t for 4 and 6 centiStoke oils and at €1,300/t-€1,345/t for 8 cSt, all on an FCA basis ex Antwerp-Rotterdam-Amsterdam or Northwestern Europe. Rerefined 4 cSt has moved slightly higher, suppliers quoting higher collection costs for feedstock, putting levels now at €1,325/t-€1,375/t, on an FCA basis ex refinery in Germany.

Prices for fully-approved Group III base oils from Spain are also stabilized as some customers reluctantly changing their mind regarding contracted sales, concerned that the market may tighten. Values for these oils are unchanged at €1,645/t-€1,700/t for 4 and 6 cSt and at €1,625/t-€1,660/t for the small amounts of 8 cSt sold in Europe. These prices are for FCA sales ex hubs in Antwerp-Rotterdam-Amsterdam, Northwestern Europe and Spain.

Baltic and Black Seas

There are still some doubts as to whether the Baltic trader has lifted the cargo of 5,000 tons of Russian export barrels out of Vyborg. On checking locally in Lagos, shipping agents could neither confirm nor deny that a vessel sailed from the Baltic and would now be enroute to Apapa port. No vessel has been cited in any of the shipping reports consulted, although the vessel chartered may have been Russian-flagged, which may not show up in western shipping reports.

It is reckoned that the cargo would have been comprised of a small quantity of SN 150, perhaps around 500 tons, a larger quantity of SN 500, say 1,500 tons, the remainder of the vessel space would be allocated for SN 900. To save costs, the SN 900 may have been splash-blended on loading, using SN 1200 and a quantity of SN 500.

Current FOB prices for SN 150 and SN 500 ex-Baltic are indicated at levels around $645/t for SN 150, with SN 500 around $660/t. Blended SN 900 will be made available for West Africa at around $720/t.

Another Lukoil cargo may be planned to load out of Kaliningrad, with around 5,000 to 8,000 tons of SN 150 and SN 500 going into Gebze port in Turkey. However, vessel inquiries are in the market without any suitable vessel yet available. Usually, Lukoil would search for a Turkish-flagged vessel, looking to make a return voyage to a home port in Turkey. Freight would be lower for such a fixture, but these are the only possibilities open to charterers due to the current European sanctions on Russian companies. No EU flagged vessels will offer to Russian charterers. The cargo quantity will ultimately depend on the size of the available vessel.

Lotos and PK Orlen have Group I grades available for sale and with around a total of 5,000 tons of three grades, interest may come from traders looking to take material into the U.K. market. The trader who ultimately offered to purchase a quantity outside the original tender offered prices that were deemed too low. 

Turkish base oil markets are exceptionally dull, with a high dependency on Russian imported barrels and not much else. Once again Greek sellers have been approached to see if they can make a cargo work into either Gebze or Derince. While at the same time, ENI has been contacted to see if further avails from Livorno would work into Turkey. With the prices for the cargo sold to U.A.E. receivers, it would be possible for Turkish traders to buy a cargo of perhaps up to 4,000 tons, with either two or three grades of European quality Group I base stocks. 

Turkey is still reeling from the devaluation of the Turkish lira to the dollar. With interest rates now lifted to 30% from Jan. 1, the country is struggling to keep its head above water. There are still constraints on accessing dollars to purchase imports – not just base oils – of all foreign goods which are required.

The importation of Russian base oils appears to be conducted on a Government to Government basis, with payments being made centrally rather than by individual companies within Turkey. Russian sellers are believed to be sponsored by the Kremlin to maintain exports to markets such as Turkey, which is basically a dumping ground for available barrels that would otherwise be difficult to move into other markets. 

Russian imports of SN 150 and SN 500 appear to be coming out of Kaliningrad during the winter months, transferring to Gebze port or Limas terminal in Turkey, from where cargoes are arranged for receivers in the U.A.E. The latest situation in the Red Sea may hinder possibilities for shipping base oils to Hamriyah, but if the cargo is identified as Russian origin, with a Turkish flagged vessel, Houthis may allow safe passage of such a vessel.

Imported Russian Group I base oil prices are maintained at the new lower levels, with sources showing CIF indication prices for SN 150 at around €825/t, with SN 500 around €840/t.

Tupras re-issued the same prices once again, with the maxim that prices have remained at the same levels for fifteen weeks. Contacts in Istanbul are unsure if there are any stocks in tank, and if the refinery is still producing at Izmir. Levels are as follows:

SN 150 at $1,166/t (Tl 24,519), SN 500 at $1,227/t (Tl 27,024) and bright stock at $1,450/t (Tl 33,167). Prices in Turkish lira are ex-rack plus a loading charge of Tl 5,150/t. 

Group II prices ex-tank remain unchanged. Levels are around €1,195/t-€1,175/t for the three lower vis grades – 100N, 150N and 220N – with 600N now at €1,385/t-€1,475/t. Group II grades may be sourced from the Red Sea, the United States, South Korea or Rotterdam. Traders are active in these supplies, with material in flexies delivered to Turkish receivers.

Partly-approved Group III base oils on an FCA basis or on a truck-delivered basis, have prices maintained, with Russian Tatneft 4 centiStoke grade at €1,325/t. Supplies from the U.A.E., Bahrain and Asia-Pacific are assessed at €1,475/t-€1,525/t FCA. There will be delays and cancellations to future replenishment cargoes coming through the Red Sea. Should supplies have to take the long way around, it could add a further 25 days to a voyage, increasing costs to freight and the prices of the CIF delivered products. 

Fully-approved Group III grades delivered into Gemlik from Spain have prices maintained at €1,865/t-€1,895/t FCA.

Middle East

In the Red Sea at Yanbu and Jeddah refineries, Luberef is experiencing problems in moving large and smaller cargoes of base oils to contracted receivers in the United Arab Emirates and the west coast of India. The problem stems from the Houthi attacks in the Bab-al-Mandab Strait. Vessels are few and far between. Parcel vessels that were relied upon to take smaller parcels of base oil to receivers in Egypt, Jordan and Sudan, are becoming unavailable due to operators re-routing these vessels around the Cape.

Finding tonnage to take cargoes to Europe, Singapore and South Africa is becoming more and more difficult as each day goes by. Saudi Aramco is looking at possibilities to truck quantities of base oil to the Middle East Gulf coast to be able to load perhaps out of Al Jubail, for example. This could solve the issue to an extent but is not an ideal solution because other petroleum products also have to be moved from Yanbu and Jeddah refineries. Cargoes of Arab Light crude oil are all loaded from within the Middle East Gulf, with Yanbu and Jeddah being pipeline-fed.

There are also political problems in the form of Saudi Arabia having a long running battle with the Houthis in Yemen. On top of all this came the news that shortly before the Hamas incursion into Israel on Oct. 7, the Saudis and Israelis were about to sign an agreement on trade and relations that would have spiked Iranian interests around the Middle East.

Markets are watching the situation with interest.

Middle East Gulf base oil contacts are becoming hugely concerned with shipping problems for material moving in and out of Middle East Gulf ports such as Bahrain, Al Ruwais and Ras Laffan. Also, the ongoing supplies from Yanbu and Jeddah with Group I and Group II base oils may be subject to delay and cancellation. with supply chain interruptions having dire economic consequences for blenders and lubricant producers in the Middle East Gulf.  The region is bracing for delays from Western supply sources with companies looking to the Asia-Pacific and other Far Eastern sources to cover short term delays in receiving base oils and additives should the Red Sea situation escalate further.

Exports of finished lubricants coming out of the Middle East Gulf are being interrupted with some blenders in the U.A.E. commenting that that they cannot find enough containers to load for East African, South African and European receivers. Overland transportation into Turkey through Kuwait and Iraq is expensive and dangerous but may be one option to get some lubricant producers out of a sticky situation.

Incongruously, this news could be a blessing for the lubricant industry in the U.K. and the European Union, where toll blended lubricants from the U.A.E. have been wrecking the market by undercutting traditional blenders’ prices and taking market share from established suppliers. These products have been blended using Russian base oils and additives, but of course are deemed to be of U.A.E. origin. 

Russian base oil delivered prices into the U.A.E. are indicated at around $835/t for SN 150 with $855/t for quantities of SN 500, but whether this trade will be affected by the Houthi actions is not clear.

Group III suppliers Adnoc and Bapco had loaded cargoes for the west coast of India and mainland China, with vessels which had been available within the Gulf.

Netbacks for partly-approved base oils from Al Ruwais and Sitra are currently maintained. They may be subject to revision should selling prices remain steady and unchanged, while shipping costs rise dramatically due to higher freight rates and a dearth of tonnage available to move cargoes.

Netbacks remain assessed at $1,410/t-$1,455/t, for the 4 centiStoke, 6 cSt and 8 cSt partly-approved and non-approved Group III grades. Netbacks for gas-to-liquid Group III+ base oils from Ras Laffan in Qatar are maintained at around $1,520/t-$1,575/t.

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

Group II base oils resold FCA in the U.A.E. up until now could be are sourced from various producers located in Europe, U.S., Asia-Pacific and the Red Sea. These supplies face interruption and delays. Base oils are sold either ex-tank U.A.E., or on a truck-delivered basis within the U.A.E. and Oman. Prices from western sources may be subject to change should delivery costs rise exponentially.

Prices are currently maintained, with levels at $1,565/t-$1,595/t for the light vis grades100N, 150N and 220N, with 600N at $1,695/t-$1,760/t. The high ends of the ranges refer to road tank wagon deliveries to buyers in the U.A.E. and Oman. Demand for these base oils has risen during the last couple of weeks, with sellers reporting that stocks are running lower than normal, but with replenishment in doubt due to the current situation.


In South Africa, shipping agency sources reported that a large cargo will load later this month or early February for ExxonMobil, to discharge base oils firstly into Durban, then the vessel will move to Mombasa, and finally will discharge the last part of the cargo into Dar-es-Salaam. Earlier logistics suggested that a vessel would be chartered to load out of Rotterdam and Fawley to deliver to Dar and Mombasa. The Red Sea situation has changed that option, and a large cargo – perhaps as much as 25,000 to 30,000 tons in total could be loaded to cover these three discharge ports if draft and length overall restrictions for a vessel are not problematic in the discharge ports

With diverted traffic from Red Sea transits, Durban has taken on a new role in the important logistical support for shipping. Vessels have no alternative other than to take on bunkers and water in this port, with no other suitable supply points in sub-Saharan Africa, while shipping companies are arranging supplies of victuals and other supplies normally provided in the first port of call in the Mediterranean.

The waiting time at Durban has risen to around 20-25 days for vessels awaiting bunkers, stores and crew.

West African news is that a vessel has loaded, or will shortly load out of Fawley, to cover requirements in Guinea, Cote d’Ivoire and Ghana. The cargo will be comprised of around 8,500 to 9,000 tons of three Group l grades, to be delivered into Conakry, Abidjan and Tema ports.

In Nigeria, as mentioned, the cargo from the Baltic remains mysterious, with shipping circles in Apapa unable to confirm dates and even if a vessel has loaded and sailed with the cargo on board. The last news heard was that the offer from the Belarus trader for 5,000 tons of Russian export barrels was accepted by receivers, and the cargo had reputedly loaded. Details are not available and cannot be verified, with sellers silent on shipping details, and receivers not identified.

Since the elections earlier this year, and the fallout from those events, Nigeria has been in an economic mess, with foreign currency unavailable in local banks, where in the past banks were able to bid for dollars. This practice apparently is no longer the case. Just how import licenses are granted, given that there are no letters of credit being issued from local banks, is a mystery.

Financing problems continue for any trader brave enough to do business in Nigeria at the moment. With no letters of credit, and open credit being offered by some, payments in naira and the exchange of large amounts of naira into dollars on the “alternative market” are good reasons not to participate in this trade at this time.

The naira exchange rate against the dollar is subject to wild swings. Due to payments for base oil cargoes being made in local currency, it becomes impossible to build in margins to cover variations of the naira.

CFR Apapa prices are maintained until information on the Baltic cargo is received. Prices remain assessed around $975/t for SN 150, $1,020/t for the SN 500 and SN 900 at around $1,145/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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