EMEA Base Oil Price Report


The Middle East situation intensified further the past week as the United States directly accused Iran of being responsible for proxy attacks in Jordan that killed three American personnel. Iran has denied any part of the aggressive actions undertaken by Islamic groups against U.S. targets.

The United Kingdom government has meanwhile imposed a new set of sanctions against a number of high-ranking Iranians and the country’s Revolutionary Guard. The latter has been coming for some time and categorizes the organization as outlawed.

Unfortunately, an end is not yet in sight for the problems in the Red Sea, with Iranian arms shipments being supplied into Yemen by sea and overland through Oman. Some of these shipments have been intercepted by allied forces but at a cost of lives lost in action.

Houthi attacks on merchant shipping in the Red Sea continue, with brazen attacks also on allied warships, which so far have parried them. A tanker carrying a large naphtha cargo was hit, causing a large fire onboard, but the blaze was extinguished, and the ship is now proceeding to port for damage and safety inspections.

All this activity is disrupting shipping as many operators elect to voyage via the Cape of Good Hope rather than make the transit through the Bab al-Mandeb Strait in the Red Sea and onwards to the Suez Canal. The alternative route is causing all kinds of problems and adjustments to vessel and port schedules, with delays and cancellations of cargoes and shipments affecting many parties in Europe and the U.S.

The same can be said about goods moving eastward as cargo and container delays mount by the day. Container traffic is probably being most affected. Containers are in the wrong places and availability shortages are causing breakdowns in supply chains across the globe.

Lubricant blenders in the United Arab Emirates are complaining that they cannot transport finished products to receivers in East and South Africa, Europe and all points west. They are also struggling to arrange supplies of base oils and additives from the West, and are becoming ever more reliant on sources in Asia-Pacific for these requirements. There are limitations, though, and changes in additive packages require reformulations.

API Group III bulk shipments from Middle East Gulf sources in the U.A.E., Bahrain and Qatar are all being affected, with a dearth of available vessels to carry cargoes to Europe and the U.S. as owners and operators prefer offering vessels for shipments to India and the Far East, which do not incur extra costs and risks.

Crude oil prices have started to react to the possibility of conflict escalating. Dated deliveries of Brent crude rose $3 the past week to $82.55 per barrel, for March front month settlement. West Texas Intermediate moved a similar amount to $77/bbl, also for March front month.

Low-sulfur gasoil followed crude upwards, rising $60 the past week to $861 per metric ton, still for February front month. All of these prices were obtained from London ICE trading late Jan. 29.


Eni announced this week that it will close the base oil plant at its Livorno, Italy, refinery as it converts the site to production of biofuels. Officials said biofuels production will begin in 2026 but did not provide a timeline for closing the base oil plant, which over the years has been a regular supplier of Group I oils for export.

The European Group I export market is back, with availabilities in various quantities being touted by a number of sellers looking to move quickly rather than having stocks languishing in tank for weeks. Supplies are available out of the Baltic, where sellers in Gdansk, Poland, are making around 5,000 tons of three grades available as one shipment. Others in southern Spain are offering material for sale that may end up in a location such as Morocco.

Another parcel has reportedly been sold from Eni’s refinery in Livorno, Italy, this one a little smaller than the 7,000 tons already delivered into receivers in Turkey. It is assumed that the second parcel will follow the first into Gebze, Turkey, if ullage is available. There are options to take Group I material to the Middle East Gulf or India, but movements are complicated by the Red Sea situation. Redirecting a 5,000-ton cargo around the cape would be inordinately expensive on freight and may rule out shipments into Mumbai anchorage or Hamriyah, U.A.E.

It is conceivable that the pricing for the second parcel was in the same ballpark as the first, although this has not yet been confirmed.

FOB prices for the first parcel were reported as $665/t for solvent neutral 150, $745 for SN500 and $965/t for bright stock. Given estimated freight costs at around $55/t, resultant CIF delivered prices would be around $760/t for SN150, $840/t for SN500 and $1,060/t for bright stock.

Alternative offers for Group I material were heard from Greek sources, but levels are not expected to be as low as the Italian offers.

Prices for Group I exports from Europe are unchanged at between $665/t and $810/t for SN150, $745/t-$930/t for SN500 and $965/t-$1,195/t for bright stock.

Prices for Group I sales within Europe have come under pressure with buyers asking for lower prices for material to be lifted in February. A few buyers were already being offered discounted rates to take larger quantities. However, with crude and feedstock prices firming, that pressure could lessen. Some sellers have announced that they will rollover levels from January into February but will keep these numbers under review should vacuum gasoil rates continue to rise.

Buyers are still moving away from long term contracts, and with availabilities reported as ample and demand slow, spot purchases are preferred. Interest rates remain high, so buyers don’t want to lock up large amounts of capital in stocks of base oil as long as purchases can be made when required.

Prices for Group I sales within Europe are unchanged this week at €895/t-€980/t for SN150, €935/t-€1,000/t for SN500 and €1,130/t-€1,220/t for bright stock.

The dollar’s exchange rate to the euro decreased to $1.07990 on Jan. 29. The price differential between Group I sales within Euroope and exports from the region is maintained at €135/t-€200/t, exports being lower.

European Group II prices are steady and perhaps stable since these grades are largely unaffected by problems in the Middle East. The threat of European imports coming in from Asia-Pacific sources appears to have disappeared with no reported cargoes or flexies being identified. European production continues uninterrupted, as do supplies from U.S. sources.

Imported 110 neutral is available at €1,055/t-€1,080/t, while 220N is offered at €1,090/t-€1,100/t and 600N at €1,200/t-€1,225/t, all in line with numbers from other participants.

The Group II premium to diesel is coming under threat as diesel values rise. This does not appear to be causing upward pricing pressure, though, as demand is somewhat weak. Suppliers and producers would like to build in some “insurance” premium, but their hands may be tied right now, given the relatively large differential between Group I and Group II prices.

Group II prices are unchanged at €1,045/t-€1,125/t ($1,130/t-$1,225/t) for 100N or 110N, 150N and 220N and at €1,195/t-€1,320/t ($1,300/t-$1,440/t) for 600N. All of these prices apply to a wide range of Group II base oils from European, U.S., and occasionally Red Sea sources, all imported in bulk. In the European Group II market, 100N and 150N grades are sometimes priced higher than 220N due to demand, although two U.S. suppliers maintain 220N prices at a premium to 110N of around €30/t.  

The hot news in the Group III camp this week is that Shell has announced that it will cease making fuels at its Wesseling refinery in Rhineland, Germany, and will convert the hydrocracker unit to Group III base oil production.

This is an interesting move, with Shell already having access to base oils from its gas-to-liquids joint venture with Qatar Petroleum in Qatar and with Shell International Trading and Shipping Co. the appointed Group III distributor for Bapco in Europe. Shell said it is making this investment to cover “increasing demand” for Group III, in particular for electric vehicle lubricants an immersion cooling fluids. Base oil production will begin in the second half of this decade.

The not so good news is that European Group III markets braced for a turbulent period due to situation in the Red Sea. The market reports sufficient availabilities at the moment, but how long this situation will last is anyone’s guess. Cargoes from the Middle East Gulf and Malaysia could encounter disruptions, and Neste’s Group III plant in Porvoo, Finland, is scheduled to begin a prolonged turnaround in April.

There would appear to be a real possibility of the European Group III turning short of material. Other routine turnarounds will also take place throughout the year, potentially amplifying the situation.

Shell announced last week that all vessels carrying Shell cargoes will sail via the Cape. This will apply to all material from crude oil through bitumen, and will include Stasco shipments from Sitra, Bahrain, to Europe and the United States, in addition to shipments of GTL base oils from Qatar. This obviously increases transportation costs.

Prices for Group III with partial slates of finished lubricant approvals or without approvals are higher this week at €1,535/t-€1,585/t for 4 and 6 centiStoke oils and €1,510/t-€1,530/t for 8 cSt, all on an FCA basis ex Antwerp-Rotterdam-Amsterdam and Northwestern Europe.

Rerefined 4 cSt also rose to €1,475/t-€1,500/t, on an FCA basis ex rerefinery in Germany.

Prices for fully-approved Group III base oils from Spain also rose to €1,720/t-€1,765/t for 4 and 6 cSt and to €1,700/t-€1,725/t for 8 cSt, on an FCA basis ex hubs in Antwerp-Rotterdam-Amsterdam, Northwestern Europe and Spain.

Baltic and Black Seas

Baltic regions have been quiet on the Russian export front, with few movements recorded in shipping reports, other than the possible Polish cargo from Lotos in Gdansk. That is believed to be quantity of around 5,000 tons, made up of three Group I grades – SN 150, SN 500 and bright stock – and has been offered to a trader who will possibly lift on a prompt basis, subject to shipping availability. The destination of the cargo is unconfirmed, but market suggestions are that this parcel may end up in the United Kingdom.

Following the Lukoil cargo loaded out of Svetly in Kaliningrad, there have been no further movements detected. That cargo was around 5,000 tons in total, comprised of SN 150 and SN 500 Russian export barrels.

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 buyers in Nigeria at around $720/t.

Further availabilities from Gdansk may go to receivers in Lithuania or Latvia who are looking to purchase EU quality Group I base oils, having previously relied solely on Russian material coming cross border by train prior to the European Union ban on the import all Russian hydrocarbon derivatives. Quantities of Russian base oils are still smuggled 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 EU-produced material. or used straight to manufacture finished lubricants at very low cost, which are then of EU origin.

Turkish base oil markets are starting to look up, with the importing of at least one, and possibly two cargoes from Livorno. The arrival of 7,000 tons of three Group I grades gives blenders access to European quality Group I material that, due to high prices, has been missing from the Turkish market over the last few months.

Greek sellers have also offered a cargo thought to be 4,000-5,000 tons of two Group I grades – SN 150 and SN 600. Prices are expected to be firmer than those for the Italian cargo but may still be competitive.

The Turkish economy remains dire, with further devaluation of the Turkish lira to the dollar, and with interest rates now at a staggering 30%. Inflation is rife with official published figures at around 48%, but with actual inflation coming in at around 72%-76%. The government appears to be in denial, with figures massaged and altered to suit reported stats.

It has been suggested that Russian base oil imports are being conducted on a Government to Government basis, with credits and debits arranged to suit the budgets. Russian sellers are being sponsored by their government to maintain exports of all petroleum products to Turkey – a NATO member – where there is now a legalized dumping ground for surplus Russian barrels that could not be sold or offered to any other market.

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 from Limas terminal in Turkey, but if the cargo is identified as Russian origin – with a “suitable” non-Israeli, non-U.S. and non U.K.-vessel – the rebel 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 changed its dollar prices for Group I base oils, assuming that it is producing, and is selling avails to regular lifters. Levels are now as follows: SN 150 at $814/t (Tl 24,519), SN 500 at $897/t (Tl 27,024) and bright stock at $1,101/t (Tl 33,167). Prices in Turkish lira are ex-rack plus a loading charge of Tl 5,150/t. The Turkish lira levels have remained the same, but with continuing devaluation of the Turkish lira, dollar equivalents have come down.

Group II prices ex-tank are maintained, 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 U.S., South Korea or Rotterdam.

Partly-approved Group III base oils on an FCA basis or sometimes on a truck-delivered basis have prices raised. Russian Tatneft 4 centiStoke grade moves up €1,465/t. Supplies that arrived from the U.A.E., Bahrain and Asia-Pacific in the past are assessed higher at €1,575/t-€1,620/t FCA. Replenishment cargoes are not booked as yet.

Fully-approved Group III grades delivered into Gemlik from Spain and resold on an FCA basis have prices rising this week to €1,895/t-€1,945/t FCA.

Middle East

The Red Sea ports of Yanbu and Jeddah are lifelines for the production coming out of the two refineries, and there must be shipping issues for chartering departments in Saudi Aramco and Luberef. Fuels and base oils will have to be moved from these facilities, although the refineries are connected to crude supplies by pipeline.  Presumably, petroleum products can be distributed in the same way to terminals inland and on the Gulf coast, such as Al Jubail.

Base oils, however, have to be transported by sea. With receivers in the west coast of India and the United Arab Emirates dependent on taking large cargoes of both Group I and Group II base stocks on a regular basis, the Houthi problems must be causing no end of trouble and strife. Available vessels are few. With parcel chemical tankers – 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, the problems are infinite.

Political problems for Saudi Arabia, which has had a long running battle over the past few years with the Houthis in Yemen, are also coming into play.

Middle East Gulf base oil sources are now desperate to book supplies of base oils and additives from usual and unusual sources. Some major additive companies are looking to satellite producers in Asia-Pacific that can temporarily aid supplies into receives in India and the Middle East Gulf. The shipping situation has become critical, with difficulty in moving material in and out of Middle East Gulf ports.

Supplies from Yanbu and Jeddah with Group I and Group II base oils are subject to delay and cancellation. Supply chain interruptions are causing some blenders in the U.A.E. to cut back on working hours due to lack of raw materials to manufacture finished lubricants,

The region is experiencing delays and cancellations from supply sources in the West, with U.A.E. companies looking to China, Singapore and South Korea sources for the supply of additives and packaging. Drums in 205-liter volumes and five-liter NRDs are becoming impossible to lay hands on and cartons and smaller tins are out of the question.  

Exports of finished lubricants coming out of the Middle East Gulf are being strangled. Blenders in the U.A.E. say that they cannot find space on vessels or in fact locate enough containers to load for East and South Africa, Europe and the United States. One option being tried is to load vehicles to truck overland into Turkey via Saudi Arabia, Kuwait and Iraq, but this transportation is expensive and risky, with bandits and pirates along the way. Vehicles must travel in convoys with armed protection.

Russian base oils delivered prices into the U.A.E. are indicated at around $835/t for SN 150, with $855/t for quantities of SN 500. It is 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 successfully loaded cargoes for the west coast of India and mainland China, with vessels which had been available for charter 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. In the case of base oils, this will apply and will include cargoes of Group III loading out of Ras Laffan in Qatar, and Stasco loading material out of Sitra for the European market. These moves will drive up the prices of landed Group III base oils into Europe, assuming of course that charterers can access suitable tonnage to convey the cargoes to the discharge port.

Netbacks for partly-approved base oils from Al Ruwais and Sitra are raised this week, in response to higher selling prices in the European market, and shipping costs will rise dramatically due to higher freight rates amid a dearth of vessels to load cargoes. It is assumed that suppliers of Group III base oils will have to pass on incremental costs to buyers, hence netbacks should be protected and will rise.

Netbacks are increased at $1,485/t-$1,525/t for the 4 centiStoke, 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 are pushed higher even after higher costs of freight and delays. Netbacks are revised upwards by $40/t-$65/t and are now put at around $1,485/t-$1,530/t.

Netback levels are established from distributors’ selling prices, less estimated marketing, margins, handling and freight costs. The new increased freight costs have not been assessed as yet and may have the effect of bringing down netbacks, at least in the short term. This situation will be constantly under review.

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 are now facing 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 revised upwards, with levels assessed at $1,620/t-$1,685/t for the light vis grades 100N, 150N and 220N, with 600N at $1,735/t-$1,795/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 inventories are lower than normal, with replenishment in doubt from suppliers such as Luberef.


South Africa shipping agency sources again mentioned a large base oil cargo loading on a prompt basis, 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 evaporated.

With diverted traffic from Red Sea transits, Durban ports started to calm down, with most vessels now fully bunkered and watered for the voyage around the Cape prior to leaving initial load ports. Shipping is still using Durban for crew changes and top-ups of stores etc, but delays are minimal now, with most vessels no longer berthing at the anchorage.

ExxonMobil may have loaded a vessel out of Fawley, supplying base oil requirements into Guinea, Cote d’Ivoire and Ghana. It is believed that the cargo comprises of around 8,500-9,500 tons of three Group I grades, to be delivered into Conakry, Abidjan and Tema. Five thousand tons of the three grades will discharge into Tema under the Ghana supply contract, with the remainder of the cargo split between the two other receivers. 

In Nigeria the cargo from Vyborg in the Baltic remains an enigma, with agency sources in Lagos unable to confirm details of a specific vessel. The latest news last week was that the cargo had loaded a few weeks back, but details were not available, hence the situation cannot be confirmed or verified. 

Financial hurdles continue to be the main reasons why some traders are taking a break from supplying base oil cargoes into Nigeria. One trader has not pursued any business for more than two years, with others thinking twice about rushing back into the Nigerian market. Financial problems are the central issues in Nigeria. Open credit is offered by some players, with payments made in naira, with the exchange problems and hassles that are involved. 

CFR Apapa prices are only indications with numbers a little firmer, at around $995/t for SN 150, $1,045/t for the SN 500 and SN 900 at around $1,165/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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