EMEA Base Oil Price Report


The effects of ships avoiding the Red Sea are becoming more apparent as the days go by, with governments and operating companies realizing the complications of re-routing around the Cape of Good Hope.

The Houthi attacks on merchant vessels continues, with United States and United Kingdom warships deployed to prevent strikes by drones and missiles. Other nations – such as Australia, Denmark and Italy – have also joined the allied task force to interrupt the attacks. Further action is being considered by the allied forces to repeat strikes on Houthi targets where storing and launching of projectiles are taking place.

Vessel operating companies announced amended schedules, with delays and extra time required to deliver cargoes on board a variety of vessels from tankers through to container ships. Companies such as Shell and Maersk made decisions for all tonnage to avoid the Bab-al-Mandeb Strait between the Red Sea and the Gulf of Aden. One of the major logistical problems has been operations and services at the port of Durban in South Africa. At Durban, ships requiring bunkers, water, victualling and crew changes are waiting outside the actual port, with delays of up to 25 days to complete supplies.

Durban is not geared up or prepared to cover such an onslaught of services. With few options for alternative ports enroute from the Cape to the Mediterranean, or to the U.S., vessels have little choice other than to wait in line for supplies. Most ships will have had sufficient provisions and fuels to be able to handle delays at Durban. That’s because vessels would have been topped up prior to sailing in a westerly direction, and vessel sailing eastwards will have taken on extra supplies prior to sailing from loading ports.  Many vessels planning to take the Cape route westwards are now topping up prior to entering the South Africa region, thus avoiding the need to replenish stores etc. at that point.

The situation in the Middle East was further exacerbated by the entry of Iran into the equation, with one vessel seized off Oman, and an exchange of missiles with Pakistan ramping up the potential for escalation of hostilities in the region.

These events carry serious destabilizing effects to trade and commerce in the region. Apart from the main conflict in Gaza between Israeli forces and Hamas, other political and military exchanges are only adding to the complex alterations going on in the Middle East region at this time.

Looking to the effects on base oils, there are a number of serious interruptions and breakdowns to supply chains which will take time and efforts to get around. For example, API Group I cargoes moving from U.S. and European sources to the United Arab Emirates and India are having problems. Similarly, Group I and Group II supplies from Yanbu and Jeddah are finding problems obtaining suitable tonnage to carry cargoes out of the Red Sea, with many owners and operators choosing to re-position vessels rather than incur higher insurance costs and the risks to hull and crew in passing through the Red Sea.

Lubricant blenders and manufacturers in the U.A.E. and India are finding difficulties in obtaining space, and actual containers, to move finished products to traditional markets in East Africa, the Mediterranean, northwest Europe and the U.S. There is a domino effect happening, which is affecting everyone in the supply chain. The resultant outcome will be further delays and higher costs to maintaining trade and business.    

The Red Sea Houthi attacks have so far had a limited effect on crude oil prices so far, but with more diversions of vessels from the direct route through Suez to Europe, there is still scope for all energy prices to rise on the back of the problems. Crude is showing only marginally higher than last week by a couple of dollars per barrel across all crude oil types.

There was talk and reports in the press during last week that OPEC may have had its day and may weaken as an influence on oil prices going forward into the future. Other major producers have taken up the baton to cover the reduction in production by Saudi Arabia, for example, with nations such as the U.S. and Brazil covering any shortfall in the markets. Demand remains weak from major buyers such as the Chinese, but with Russia selling vast quantities of Urals crude at vastly discounted prices to buyers in India and China, demand for OPEC crude is muted. OPEC+ member Angola has withdrawn from the cartel, citing that by reducing production they would be endangering its economy, which is heavily reliant on crude exports.

Dated Brent currently posts at $79.55 per barrel, $2 higher than one week ago, these prices remaining for March front month. West Texas Intermediate has also moved upwards to $74.30/bbl for February front month.

Low Sulfur Gas Oil trade has been relatively dull, with European stocks reported at an all time high, even in the depths of winter. This product now trades at $798 per metric ton, around $20/t higher than last week. This product is for February front month.

Prices were identified from London International Commodity Exchange close on Monday, Jan. 22.


The European Group I export market is making a comeback, with a number of refineries offering various quantities of all grades for export sales. There are not many traders taking up offers. Many of the traditional export destinations are either well supplied from elsewhere, or there are logistical problems standing in the way of trades being completed. Such is the Red Sea problem, which has caused a number of parties to avoid offering Group I material into markets such as the U.A.E. and the west coast of India.

The continuing saga of the export deal from Livorno took a new turn at the end of last week. This report discovered that the vessel was not sailing to Middle East Gulf receivers, but instead was bound for Gebze in Turkey, where the 7,000 tons cargo of three Group I grades is now discharging. The vessel was due to arrive in port on Jan. 20, the assumption being that with all going well, the discharging of the cargo would commence almost immediately. It is still not clear which of the two traders involved chartered the vessel.

With the reported selling prices setting new lows for Group I FOB export prices, the importation into Turkish receivers was made possible. With freight costs estimated to be around $55/t, CIF delivered prices may have been around $760/t for SN 150 with SN 500 at around $840/t, with bright stock at around $1,060/t.  

Offers for Group I material were heard from Gdansk refinery, Southern Spain, and also from Greek sources. Exact quantities are not detailed, but these avails may find a home in markets such as the U.K., Scandinavia or the Baltic States.

European export prices are maintained this week, with SN 150 remaining at $665/t-$810/t, SN 500 at $745/t-$930/t, and bright stock at $965/t-$1,195/t.

Domestic prices for European Group I base oils were under pressure from a number of buyers that were being offered discounted rates to take larger quantities. A number of companies have negotiated discounts that are now worked into contracts, and these will exert downward pressure on prices as cargoes based on them are shipping in coming weeks. However, with crude and feedstock prices firming, even a little, sellers are not keen to pull the market any lower than necessary to move quantities of material out of tank, so discounts may not last for long.

The pressure on prices – in either direction – may be moderate, though, unless geopolitical events take place, such as Iran entering directly into the Middle East fray, rather than backing their proxy groups to do the dirty work for them.

Buyers appear determined to move from long term contracts, since with availabilities currently being reported as good, spot purchases are the preferred route to take. This is not to say that some buyers will not commit to taking quantities over a period of time, but they may wish to spread the purchasing of these agreed quantities, according to finished product markets and demand.

Prices are showing changes from last week, with SN 150 prices now at €895/t-€980/t, SN 500 is assessed at €935/t-€1,000/t, with bright stock now at €1,130/t-€1,220/t.

The dollar exchange rate to the euro is slightly lower, posting on Monday, Jan. 22 at $1.08943

The price differential between domestic and export prices is maintained, at €135/t-€200/t.

European Group II prices are relatively steady, with these grades being relatively insulated from supply problems in the Middle East, with few announced imports being planned from Asia-Pacific sources. In fact, no reported cargoes or flexies in containers have been identified coming towards Europe from Asian suppliers. European production is continuous, with imports from the usual three U.S. sources continuing to serve the market.

The overdue cargo from the U.S. Gulf Coast arrived into Antwerp-Rotterdam-Amsterdam, and has discharged, with the European supplier issuing prices for the new availabilities. The 110 neutral grade will be available at €1,055/t-€1,080/t, with 220N offered at €1,090/t-€1,100/t and 600N at €1,200/t-€1,225/t. Interestingly, unlike some other sellers, the 220N grade is pitched higher in price than the 110N material, reflecting perhaps the way prices are arranged in the U.S. These prices are more in line with current market numbers from other incumbent suppliers. That is apart from one major, where there is almost a situation of “Posted Prices,” which are then discounted by varying amounts to various buyers, some of whom purchase larger quantities than others. The discounting reflects this aspect.

The Group II average premium to diesel is maintained, but diesel prices are creeping higher, with no signs that base oils could follow at this stage. Buyers are very aware of the growing differential between Group I and Group II prices, this differential being exaggerated due to Group I prices falling, whereas Group II numbers remain steady.

Market share remains the priority for sellers in the Group II market, but with the retraction of offers from Asia-Pacific sources due in the main to the Red Sea situation, the market may see a period of stability over the next few months.

Prices ere amended slightly this week, with levels now assessed at €1,045/t-€1,125/t ($1,130/t-$1,225/t) for the light vis grades – 100N/110N, 150N and 220N – with 600N at €1,195/t-€1,320/t ($1,300/t-$1,440/t).

In Europe, 100N and 150N grades are often priced higher than 220N due to demand and higher usage of lighter grades.

Prices are for a range of Group II base oils, including European, U.S., and Red Sea sources, imported in bulk and in flexies.

European Group III base oil markets are bracing themselves for a turbulent period due to the uncertainties surrounding replenishment cargoes coming from Malaysia, where the producers has currently gone into a major turnaround, and from Middle East Gulf sources, where shipping may be problematic. That is both from laying hands on suitable vessels to make the voyages to Europe, but also with the deviation of sailing around the Cape affecting the timing of cargoes arriving.

The market is still flush with availabilities at the moment, but another specter is looming, which could affect overall availabilities of Group III base oils in the European arena. Neste had announced on Dec.14 last year, that the entire refinery at Porvoo will shut down for inspections, maintenance, and improvements for a period of nine weeks, starting from April and continuing into June this year. This will affect the supply of Group III production coming out of that unit, although there have been continuing problems with the quality and specification of the material being produced due a changeover in crude supply, and hence the changes to the feedstock train.

There are other routine turnarounds taking place during the year, with the only fully-approved Group III producer in Cartagena going into turnaround later this Spring.

European Group III prices have at least stabilized in light of current events, but so far, distributors and agents are not looking to announce price rises just yet. There are always some players who will seize every opportunity to undercut the market and establish themselves with a share of the European cake. Other, more responsible players are aware of these prices and are always trying to protect existing customers.

Shell announced last week that all vessels carrying Shell cargoes will not proceed through the Red Sea but will re-route via the Cape. This will apply to all material from crude oil through to bitumen, and will include shipments of gas-to-liquid-produced Group III grades from Ras Laffan in Qatar to Europe and U.S.

Prices in respect of partly-approved grades 4 cSt and 6 cSt are maintained but levels are being kept under close review. Levels for 4 cSt and 6 cSt remain assessed at €1,310/t-€1,400/t. Eight cSt is assessed at €1,300/t-€1,345/t. Partly-approved prices are based on FCA supplies from Antwerp-Rotterdam-Amsterdam and northwest Europe.

Rerefined 4 cSt is also unchanged, with levels at €1,325/t-€1,375/t, on the basis of sales FCA refinery in Germany.

Prices for fully-approved Group III base oils from Spain are also stable. Fully-approved 4 centiStoke and 6 cSt grades are assessed at €1,645/t-€1,700/t. Eight cSt base oils are assessed at €1,625/t-€1,660/t. Prices are for FCA sales from hubs in Antwerp-Rotterdam-Amsterdam, northwest Europe and Spain.

Baltic and Black Seas

In the Baltic Sea region, another cargo loading out of Svetly in Kaliningrad sailed for Gebze port in Turkey. The cargo is reckoned to be around 5,000 tons in total, comprised of SN 150 and SN 500 Russian export barrels. No information has been obtained to support the loading of a 5,000-ton parcel out of Vyborg that was to be bound for Apapa in Nigeria.

Shipping agents in Lagos could neither confirm not deny that the cargo loaded and was enroute to Nigeria. No vessel was identified in any of the shipping reports available to this writer, but the vessel may have been Russian flagged or owned. Or they may be under operations from companies perhaps based in the United Arab Emirates that have been purchasing vessels to carry Russian cargoes of crude and products to markets around the world. These “ghost” ships will not show up in western shipping reports.

Current FOB prices for SN 150 and SN 500 from the Baltic remain indicated at levels around $645/t for SN 150, with SN 500 around $660/t. Blended SN 900 could be available for West Africa at around $720/t.

Lotos and PK Orlen have Group I grades available. 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 deemed too low. Lotos appear to be steering away from issuing sale tenders, having drawn blanks on two such exercises during the latter part of 2023.

The availabilities out of Gdansk may suit potential receivers in Lithuania or Latvia, who may be looking to purchase European Union Group I base oils, having depended solely on Russian material coming cross border by train in the past. It is still believed that quantities of Russian base oils are taken into Latvia and Lithuania by truck under the cover of darkness and using forest tracks rather than main roads. The material is then put into storage and can be blended with “kosher” EU material and used to produce finished lubricants at very low cost.

Turkish base oil markets were dull, but the arrival of 7,000 tons of three Group I grades from Livorno may change that scenario and may perk up the market with the addition of European quality Group I material, which has been sadly lacking from the Turkish slate for many months. 

Greek sellers have also announced availability for a 4,000-ton cargo of two Group I grades and it will be interesting to see if prices will compete alongside the Italian cargo to allow a further quantity of European material to enter the Turkish market.

Turkey is still experiencing economic woes with the devaluation of the Turkish lira to the dollar, and with interest rates now lifted to 30%. The country has inflation figures issued by the government at 48%, but actual inflation is currently expected to come in at around 72%-76%. The government figure is subject to exclusions and moot details that do not form part of the calculations. There are still official constraints on accessing dollars to purchase imports – not just base oils.

Russian base oil imports are certainly conducted on a government-to-government basis, with payments made perhaps even in times of trouble. Russian sellers are sponsored by the Kremlin to maintain exports of all petroleum products to Turkey, a dumping ground for surplus barrels that would be impossible to move into some other markets. These arrangements are made between the Kremlin and a NATO member. 

Russian imports of SN 150 and SN 500 are coming out of Kaliningrad, going into routine storage facilities in Gebze port. The 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 “suitable” vessel, Houthis may grant safe passage. 

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

Tupras at Izmir issued the same prices, with levels remaining at the same levels for the last 16 weeks. 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 are unchanged, with levels around €1,195/t-€1,175/t for the three lower vis grades – 100N, 150N and 220N – and 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.

Partly-approved Group III base oils on an FCA basis or on a truck-delivered basis have prices maintained. Tatneft 4 cSt grade is priced 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 definitely be delays to future replenishment cargoes, which potentially would come through the Red Sea. Should supplies have to take the long way around, which could add a further 25-40 days to a voyage, increasing costs to freight and CIF prices. 

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, the Saudis will be having shipping issues in moving large and smaller cargoes of base oils – and other products – to receivers in the U.A.E. and the west coast of India. The problem is the Houthi attacks in the Bab-al-Mandab Strait. Vessels are now few, with parcel chemical vessels – which were relied upon to load smaller parcels of base oil to receivers in Egypt, Jordan and Sudan – becoming unavailable due to operators cancelling sailings or re-routing around the Cape.

There are also political problems for Saudi Arabia, who have had a long running battle over the past few years with the Houthis in Yemen. There was also the news that prior to 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 thwarted Iran.

Middle East Gulf base oil sources are increasingly concerned regarding the shipping situation, with difficulty in material moving in and out of Middle East Gulf ports. Supplies from Yanbu and Jeddah with Group I and Group II base oils are also the subject of delay and cancellation, with supply chain interruptions causing some blenders in the U.A.E. to bring in short-time working due to lack of raw materials to produce lubricants. Both base oils and additives supplies are being affected. The region is now experiencing delays and cancellations from supply sources in the West, with a number of U.A.E. companies looking to China and South Korea sources for the supply of additives. How this affects formulations is an unknown, although many toll blenders will be able to adapt to cover immediate eventualities. This could mean loss of business for Western suppliers of base oils and additives, which may be difficult to reinstate after the Houthi problem has been solved.

Exports of finished lubricants coming out of the Middle East Gulf are strangled, with blenders in the U.A.E. commenting that that they cannot find space on vessels or containers to load for East Africa and Europe. One option is to try overland transportation into Turkey via Kuwait and Iraq, but this plan is expensive and dangerous – but it may be the only viable option.

Russian base oil delivered prices into the U.A.E. are indicated at $835/t for SN 150, with $855/t for quantities of SN 500. It is so far unclear if this trade will be affected by Houthi attacks or whether some “deal can be done” to grant safe passage for vessels and cargoes of Russian material. 

Group III suppliers Adnoc and Bapco loaded cargoes for the west coast of India and mainland China, with vessels available within the Gulf, and are now looking for further vessels to load for Europe and the U.S. Shell has decreed that no tanker carrying Shell cargoes of crude or petroleum products will transit the Red Sea but will take the Cape route instead. In the case of base oils, this will apply and will include cargoes of Group III loading out of Ras Laffan in Qatar, and also to Stasco loading material out of Sitra for the European market.

Netbacks for partly-approved base oils from Al Ruwais and Sitra are maintained but will be subject to revision should selling prices remain unchanged. Shipping costs are rising dramatically due to higher freight rates and a lack of vessels to load cargoes.

Netbacks are maintained at $1,410-$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 taken lower due to higher costs of freight and delays. These netbacks are revised downwards by around $70/t-$100/t and are now put at around $1,435/t-$1,475/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 sourced from various producers located in Europe, the U.S., Asia-Pacific and the Red Sea. These supplies face supply interruptions 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 maintained, but with the proviso that if cargoes come under pressure from the Red Sea situation, then levels will be amended. Levels are currently 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, and now with replenishment in doubt.


South Africa shipping agency sources confirmed the large base oil cargo that will load in February for ExxonMobil, discharging in Durban, then Mombasa, and finally Dar-es-Salaam. Earlier logistics were that the plan would have been to load out of Rotterdam and Fawley and deliver to Dar and Mombasa via Suez, but that option has gone.

With diverted traffic from Red Sea transits, Durban is attempting to provide important logistical support for shipping, with some vessels having no alternative to take on bunkers and water in this port, and with no other suitable supply points in sub-Saharan Africa. Meanwhile, shipping companies are arranging supplies of victuals and other supplies that would normally be 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. Changes. Vessels are now being pre-warned of the deviation and are taking on extra quantities of stores, bunkers and water to avoid berthing at Durban.

ExxonMobil appear to have loaded a vessel out of Fawley, to supply base oil requirements in Guinea, Cote d’Ivoire and Ghana. It is believed that the cargo is comprised of around 8,500 to 9,000 tons of three Group I grades, to be delivered into Conakry, Abidjan and Tema.

In Nigeria the cargo from the Vyborg in the Baltic remains an enigma, with agency sources in Lagos unable to confirm details of any vessel. The news heard last week was that the cargo had loaded, but details are not available and cannot be verified.

Since the elections earlier this year – and the fallout from those events, with court cases against government employees and elected officers – Nigeria has seen an economic crisis, with dollars unavailable to local banks. In the past, local banks were permitted to bid for dollars in government auctions. This process no longer exists, and how import licenses are issued without a letter of credit is an unknown.

Finance, or lack of it, is the central issue in Nigeria, and this problem appears to be getting worse, not improving. Open credit is being offered by some players and finally, payments are being made in naira. Then there has to be an exchange of large amounts of naira into dollars on the “alternative market.” These are good reasons not to participate in this trade at this time. Security is not the best in Lagos, and carrying large amounts of cash can be dangerous and expensive to insure.  

CFR Apapa prices are maintained at this point in time, with numbers remaining 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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