EMEA Base Oil Price Report


Base oil and finished lubricant markets from the Americas to Asia are feeling impacts of the ongoing attacks on shipping through the Red Sea.

Receivers in Europe and the United States are preparing to ride out cost increases caused by many vessels detouring around South Africa’s Cape of Good Hope, while others in India and the United Arab Emirate are trying to cope with delays and postponed cargoes from the U.S. and Red Sea sources.

The delays and cancellations to deliveries of base oils and additives are also disrupting finished lube supplies to countries around the Middle East Gulf regions and to East and South Africa.

The Argus Global Base Oils Conference in London last week heard talk of Russian base oils shipped to the United Arab Emirates being blended into finished lubricants that are then shipped to the European Union and the United Kingdom – allegedly to skirt bans that those entities have imposed on imports of Russian petroleum products.

Critics complain that such products are being offered below the costs at which they can be produced in the EU and the U.K. British lube blenders have lobbied local ministers of parliament to raise the problem with the British and EU governments, and companies are also requesting help from the United Kingdom Lubricants Association and the Union of the European Lubricants Industry.

Base oil prices have not yet been affected by the conflict in the Middle East. API Group l and Group II supplies in Europe should be relatively unaffected by that situation, but Group III imports from Southeast Asia and the Middle East Gulf will certainly be affected by the added time and cost of reaching Europe. The effects may not become clear until replenishment stocks finally arrive into storage.

Base oil demand remains dull as many prime economies have either slipped into recession or are on the edge of doing so. Without a boost to trade and commerce, demand will stay on the low side, since demand for automotive and industrial lubricants and process oils is negative.

Crude oil costs are still hovering around the low $80s level. Dated deliveries of Brent crude crested $83 per barrel the past week before falling back to $81.90/bbl, for April front month settlement, a little lower than last week. West Texas Intermediate followed a similar track to $76.95/bbl, now for April front month.

Low-sulfur gasoil was also little changed, though it remains well above the level where it was in mid-December, in the mid-$700s. On Monday it came in at $843 per metric ton, down around $15 from a week earlier, for March front month. All of these prices were obtained from London ICE trading late Feb. 26.


Group I exports from Europe continue to trade in a wide range of prices, from very low numbers for bulk cargoes from Eni’s refinery in Livorno, Italy, to much higher rates for smaller sales in flexi-tanks from Spain. The latest news from Livorno is that base oil production will cease during March, although manufacturing of the Eni range of branded lubricants will continue, presumably with supplies of base oil being procured from the open market.

This will turn what was a large Group I supplier into a large purchaser, which it is assumed will continue to use Group I and III base stocks. It will be interesting to see if the company transitions to Group II in the future.

One or two “final” base oil cargoes will be made available for loading between now and mid-March when production ceases.

Other availabilities are noted from Lotos in Gdansk, Poland, although every time a cargo is offered from this source the prices tend to be too low for sellers to consider a prompt cargo loading.

In Hungary, the local producers of Group I base oils, Mol plans a maintenance turnaround from the beginning of June until mid-July. This event could shorten supply of Group I in Eastern Europe, although sufficient stocks will be laid away to cover regular customer requirements during the turnaround.

European export prices are once again unchanged at between $645 per ton and $810/t for solvent neutral 150, $725/t-$930/t for SN50 and $945/t-$1,195/t for bright stock.

Prices for Group I sales within Europe are under considerable downward pressure, with buyers demanding reviewed levels from March 1. January prices were maintained for February, but now purchasers are perhaps looking to restock for Spring and may be looking for lower numbers. One problem for sellers is that diesel prices remain relatively high, keeping pressure on them to maintain a positive margin for base oils above diesel.

Buyers continue to prefer buying on the spot market rather than tying themselves contracted monthly procurements. Term contracts may never make a return to the Group I base oil markets, unless the market goes tight, though numerous attendees at the Argus conference said they might shift to Group II in such an event.

Prices 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 exchange rate to the euro has firmed to $1.08407 Monday. The average price differential between Group I sales within Europe and exports from the region remains between €155/t-€245/t, exports being lower.

European Group II prices are also under pressure since demand has not returned as forecast by producers at the end of 2023. Availabilities remain good even with the interruption to production at ExxonMobil’s facilities in Rotterdam. Imports from the U.S. may increase since that market is experiencing poor demand right now, and U.S. producers are keen to export barrels to Europe. Even with the import levy at 3.7%, U.S. imports are competitive and remain a primary source for the European market.

Imports from Asia-Pacific sources have been cancelled for a number of reasons. First, the European market probably would have difficulty absorbing a large influx of additional Group II barrels. Second, and probably more important, is the situation in the Red Sea, with vessels having to re-route around the cape, which might undercut the pricing edge of imports from Asia-Pacific.

Also, any products arriving to the EU from China would qualify for import duty, piling on additional costs to the operation. Singapore and South Korea would be exempted under free trade agreements.

Prices for Group II grades are higher this week at €1,030/t-€1,075/t, ($1,110- $1,160/t) for 100, 110 and 150 neutrals, at €1070/t-€1,120/t ($1,155/t-$1,210/t) for 220N and at €1,180/t-€1,255/t ($1,275/t-$1,355/t) for 600N. The lows pertain to one particular U.S. importer.

These prices apply to a wide range of Group II base oils from Europe, the U.S. and Red Sea sources, all imported in bulk. In the European Group II market, 100N and 150N grades can sometimes be priced higher than 220N due to demand.

The effects of the Red Sea interruptions are now being quantified as more cargoes are making their way towards Europe from Southeast Asia and the Middle East Gulf. The final costs will not be calculated until the material is safely discharged into tanks in Antwerp-Rotterdam-Amsterdam but estimated costs have suggested that freight rates could be as much as 50% higher than before the conflict. This would mean an approximate increase in delivered cost of around $50/t-$85/t, depending on the size of the parcel. Availabilities remain good at this time, with distributors issuing reassuring comments that supplies will be arriving to cover requirements in the European market.

Some producers are looking to put more product into Europe, since they are facing steep competition from new Chinese capacity for sales in that market. Some Asia-Pacific suppliers continue to offer lower prices than the mainstream European market, although in some cases quality is lower than material from the Middle East Gulf and Malaysia.

An example gleaned from last week’s conference was that prices in the U.A.E. for ex-tank supplies of 4 centiStoke product are at all-time lows, with offers for material at $950/t. This shows how competitive the Group III market has become.

European prices for Group III grades with partial slates of approvals or with no approvals are unchanged at €1,555/t-€1,595/t for 4 and 6 centiStoke oils and at €1,565/t-€1,600/t for 8 cSt, all on an FCA basis ex Antwerp-Rotterdam-Amsterdam or Northwestern Europe. Rerefined 4 cSt is also unchanged at €1,485/t-€1,520/t, on an FCA basis ex rerefinery in Germany.

Prices for Group III oils with full slates of approvals are assessed at €1,735/t-€1,770/t for 4 and 6 cSt and at €1725/t-€1755/t for 8 cSt, on an FCA basis ex hubs in Antwerp-Rotterdam-Amsterdam, Northwestern Europe and Spain.

Baltic and Black Seas

This report received news last week that the Lukoil terminal in Svetly in Kaliningrad closed, and that no supplies of Russian base oils are now moving through Lithuania into Kaliningrad. This was reported from a reliable source, but no confirmation from Lukoil has been possible as yet. This would mean that all Russian exports are now being effected through the Black Sea, although supplies from the northern refinery at Perm can still be routed by rail to the Black Sea and onwards to buyers in Singapore and the United Arab Emirates. Other supplies would come out of Volgograd refinery and would either by shipped down the Volga River system or transported overland to ports such as Novorossysk before being loaded for deep-sea destinations, or transit through Limas terminal in Turkey.

It was learned and confirmed last week that Russian cargoes will be given safe passage by Houthi rebels through the Bab-al-Mandeb Strait in the Red Sea. Cargoes will have to be indentified as Russian origin and need to apply for safe passage in advance of a vessel’s arrival in the Strait. Therefore, it will be possible for Russian cargoes from the Baltic and Limas terminal to economically supply receivers in the U.A.E. How the cargo is identified is not known, but vessels’ owners or operators will have to liase with Houthi agents in Hodeidah to arrange passage. it is thought that Turkish flagged vessels will be favored for these trades.

Polish produced material is available in Gdansk, but quantities are not confirmed, although it was talked last week that a parcel of three Group I grades was to be around 5,000 tons in total. it is not thought that this product will be tendered but will be sold to favored traders who can be relied upon to load the material on a timely basis.

With the closure of Svetly, Russian export barrels are being delivered through Saint Petersburg and Vyborg, so there is still potential for Lukoil to load large cargoes for receivers in Turkey and Singapore.

Russian FOB prices for SN 150 and SN 500 from Saint Petersburg are indicated at low levels around $620/t for SN 150, with SN 500 around $635/t. SN 900 can be made available at around $675/t, using SN 1200 and SN 500 to blend to obtain the required viscosity. These levels are assessed on the basis of landed prices in various locations such as Singapore, Turkey and Nigeria.

In Turkey there are damning reports of inflationary levels discussed in government circles, with the interest rate for the Central Bank now moving upwards to around 50% per annum. With Russian base oil imports being conducted on a Government to Government basis, meaning the Turkish market is awash with Russian material.

The two Livorno cargoes were delivered into Gebze, and it is possible that one or more parcels may follow before the refinery closes in March. The same trader will probably sell the material to the same buyers in Turkey, who were desperate to lay hands on European quality Group I base stocks.

Russian imports of SN 150 and SN 500 now moving from St Petersburg are maintaining the flow of material into the Turkish market through Gebze port.

Imported Russian Group I base oil prices remain indicated on a CIF basis for SN 150 at around €785/t, with SN 500 around €795/t.

Turkey’s only indigenous producer of base oils is Tupras at Izmir refinery. It has maintained prices now for some four months with levels as follows from the refinery: SN 150 is at $728/t (Tl 24,519), SN 500 at $807/t (Tl 27,024), with bright stock at $1,015/t (Tl 33,167). Prices in Turkish lira are ex-rack plus a loading charge of Tl 5,150/t. The U.S. dollar prices are falling due to the Turkish lira being devalued on a daily basis, while the lira prices remain unchanged.

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.

Partly-approved Group III base oils are available on an FCA deal, or a truck-delivered basis, where an extra charge of around €35/t for local deliveries will apply. Russian Tatneft 4 centiStoke grade is 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 is unclear if it will be uneconomic for vessesl carrying cargoes  to re-route around Africa before delivering Group III base oils into Turkey. This market may be fed from Antwerp-Rotterdam-Amsterdam, folowing discharge of the main cargo.

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

In the Red Sea there are reports that cargo movements during January and February from Yanbu and Jeddah were significantly lower than previously managed. These cargoes would have been moving into India, the U.A.E. and Pakistan, but have presumably been delayed or cancelled due to the potential Houthi attacks on shipping. Comments received last week were interesting, on a suggestion that Saudi cargoes of base oil would be targeted by the rebels. This was refuted, with one commentator saying that the Saudis had already threatened Houthi rebels that if anything happened to a Saudi vessel in the Red Sea, then there would be hell to pay, and action would be taken against Houthi bases by the Saudi military.

Some smaller vessels are making the trip through the Suez Canal to discharge chemicals into Yanbu and Jeddah, and are then returning by the same route, taking base oils into ports in Sudan, Jordan and Egypt.

In Middle East Gulf regions there are reports from the U.A.E. that suggest that Luberef is experiencing shipping problems for large cargoes going into ports such as Fujairah and Jebel Ali. This may be due to a dearth of available vessels prepared to make the transit through the Bab-al-Mandeb Strait.

Russian base oils have delivered prices landed into the U.A.E. that are indicated at around $795/t for SN 150, with $810/t for quantities of SN 500, with a large parcel of up to 10,000 tons either being loaded out of St Petersburg or Limas terminal in Turkey for receivers in Hamriyah. With safe passage from Houthi rebels in the Red Sea, Russian sellers such as Lukoil and Litasco will be able to continue to sell cargoes into the U.A.E. for blending purposes. It is also rumored that Russian base oils were re-loaded out of Hamriyah and delivered into Apapa in Nigeria. The base oils would have been declared as U.A.E. origin, since they would have been imported, then re-exported.

Group III suppliers Adnoc and Bapco have loaded cargoes for Mumbai anchorage and mainland China. The main concern for U.A.E.-produced Group III barrels is that foreign imports from South Korea are ruining the local markets, with prices for 4 cSt material confirmed last week to be $950/t FCA Hamriyah. The specification of the offered 4 cSt product has not been declared, so no comment can be made regarding the spec or quality.

Mainland China is becoming more and more competitive for Middle East Gulf Group III suppliers, with the advent of new production coming on-stream in the past few months. Producers in the U.A.E. have been actively promoting extra barrels aimed at the European market, but distributors are resisting these moves, having enough problems moving existing stocks at reasonable margins, without flooding the European markets further.

Netbacks for partly-approved base oils from Al Ruwais and Sitra are maintained, with selling prices remaining in the ranges for the moment. When new stocks arrive around the Cape, either netbacks will drop, or prices will have to rise – the latter being almost impossible in the market as it stands today.

Netbacks are indicated at $1,510/t-$1,565/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 $1,525/t-$1,575/t.

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

Group II base oils can be sold ex-tank in the U.A.E., or on a delivered basis by truck within the U.A.E. and Oman. Prices remain unchanged, with levels 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.


South Africa shipping agency sources confirmed the large cargo has loaded for Durban. This cargo will be comprised of around 18,000 tons of various base oils and easy chemicals. Suppliers are currently looking at a Singapore option for Mombasa and Dar-es-Salaam.

West Africa reports contain news of an imminent arrival of a cargo that will supply receivers in Conakry Guinea, Abidjan in Cote d’Ivoire, and Tema in Ghana. The vessel loaded around 10,000 tons of three grades of Group I base oils out of Fawley.

Cargoes have been arriving into Apapa from a number of sources during the last few months, with Singapore and the U.A.E. being nominated in addition to the U.S. Gulf Coast and U.S. Atlantic Coast. The cargo that loaded out of Hamriyah was thought to be comprised of Russian material, because the only other source for Group I material locally would have been Iran. Iranian refineries are not known to be able to blend SN900 for the Nigerian market, so the cargo may have been specifically purchased to be able to re-load to deliver into Lagos.

The trader responsible for the Far East and U.A.E. cargoes just discharged another parcel last week in Apapa. It is believed that this trader only deals on the basis of payment in dollars in advance.

Another large 18,000-ton cargo is on the water en route to Apapa from the U.S. with traders selling to multiple receivers in Nigeria. The cargo will arrive in the next couple of weeks for discharge.

With the naira exchange rate now above 1,550 to the U.S. dollar, trading in this region gets harder and harder. With access to dollars very difficult, often traders have to accept naira payments and the exchange on the black market to obtain dollars. The naira numbers are becoming huge, with the exchange rate at current levels.

Some traders are hell bent on offering discounted low prices, which are destroying the market for others to participate. The reasons behind these actions are indeterminate.

CFR Apapa prices are given as indications only. They are 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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