Weekly EMEA Base Oil Price Report


Geopolitical events have fundamental effects on energy prices, and ultimately the prices applied to petroleum products such as base oils, hence this report will continue to address important international issues that to a large extent, control the day-to-day prices for crude and refined products.

This week began with Israel directing large numbers of civilians to move out of Rafah in Palestine’s Gaza Strip as Israeli Defense Forces started their ground invasion of the region. Rafah is crammed with people who fled there to shelter in one of Gaza’s last refuges.

Most anticipate a fierce and bloody battle, with the Israelis committed to eradicating any Hamas resistance while also trying to free hostages taken during Hamas’ October 7 massacre. An invasion of Rafah is expected to further raise tensions between Israel and the various Iranian proxies operating in the region, such as Hezbollah and Houthi rebels. There are reports that Iran has been training Hezbollah drone pilots in a secret location deep inside Iran, suggesting a possible shape of response to the invasion.

In terms of economic impact, one main concern has been that the war in Gaza, along with the one in Ukraine, could drive up energy costs, although that has not happened since Israel invaded. Some theorize that powers such as China and the United States have applied leverage to keep crude prices at sensible levels.

With the Houthis still attacking merchant marine vessels in the Bab el-Mandeb Strait in the southern Red Sea, one the largest global container shipping corporations – Maersk – stated that vessel diversions around the Cape of Good Hope will continue at least until the end of this year, maintaining the higher costs and longer delivery times for goods moving both east and west between the Asia-Pacific and Europe and the United States.

Base oil prices have seen a round of increases for API Group I and II grades, resetting the premiums which these carry over diesel and crude prices. Group III prices have so far stayed stable for the moment. Incremental shipping expenses have certainly affected supplier costs, but Europe is so flush in material that it is difficult to impose markups.

Crude oil prices dipped the past week, with dated deliveries of Brent crude falling more than $5 per barrel. Demand remains subdued for exports from Saudi Arabia, Kuwait, Iraq and the United Arab Emirates. Several Far Eastern economies are experiencing problems, and this is holding down demand.

Large quantities of discounted Russian crude continue moving to India and China, dampening demand from traditional sources.

Dated deliveries of Brent dropped to $83.40/bbl, now for July front month settlement, while West Texas Intermediate slid to $78.60/bbl, still for June front month.

Low-sulfur gasoil prices drifted around $40 lower the past few days to $745 per metric ton, still for May front month. All of these prices were obtained from London ICE trading late May 6.


Europe is moving from being a net exporter of Group I base oils to moving towards importing more and more Group I grades. Traders have brought in a number of cargoes from Red Sea and U.S. sources. The European market is probably net short of Group I grades.

One European producer continues to ship cargoes to West and East Africa and South Africa, but they are not considered true exports since the shipments are delivered to affiliates or to long-term contracted customers. Prices associated with those shipments are not representative of true export destinations, which are being supplied by Russian traders and others able to access Russian barrels.

Group I markets around Europe remain snug due to supply chain interruptions from normal events such as maintenance turnarounds and problems such as a fire at a refinery in northern France. Production from the latter facility is not expected to be restored before June.

Prices for Group I sales in Europe firmed recently as many suppliers imposed hikes of €45/t-€75/t, effective from May 1. One Spanish seller raised prices by larger amounts — €90/ton for solvent neutral 150 and €200/t for bright stock – but those markups only brought that supplier into line with others.

The increases and latest developments in the Middle East sparked some buyer concerns of a summer run-up, but the past week’s retreat by crude oil prices may have allayed those worries, though few energy analysts expect that slide to continue.

Mediterranean producers are struggling to meet increasing demand, so some finished lubricant blenders are casting their supply nets wider, trying to establish new supply lines from unlikely sources such as Saudi Arabia.

Prices for Group I sold within Europe are maintained this week at the new higher levels of €1,000/t-€1,055/t for SN150, €1,025/t-€1,080/t for SN500 and €1,265/t-€1,325/t for bright stock. The dollar exchange rate to the euro remains around last week’s level, posting Monday at $1.07822.

European Group II prices have risen across the market as all suppliers followed ExxonMobil’s lead with hikes around €40/t-€50/t on all grades. Buyers had been trying to lock in extra supplies of Group II base oils at the lower rates, but most will now have to pay higher numbers.

The price increases took effect May 1 for most sellers, who cited rising costs for wages, commercial insurance and business rates.

The Group II premium to diesel doubly improved following a decrease in diesel prices, and some buyers now contend that Group II margins are excessive and that Group II values should be trimmed. Taking the average Group II price across all grades, the premium is now above $400/t.

Group II prices are maintained at the increased levels of €1,060/t-€1,095/t ($1,145/t-$1,190/t) for 100 neutral and 150N, €1,100/t-€1,145/t ($1,190/t-$1,235/t) for 220N and €1,210/t-€1,275/t ($1,300/t-$1,395/t) for 600N. These prices apply to a range of Group II oils from European, U.S. and Red Sea sources, all imported in bulk.

Group III cargoes from Asia-Pacific and the Middle East Gulf have arrived in Europe. Suppliers are trying to pass on increases in their own costs, but buyers are resisting, and many sellers have backed down to protect market share. Comments were heard that once a buyer switches suppliers, it is extremely difficult to win them back.

A European trader continues to offer imported Chinese Group III base oils to prospective buyers in the United Kingdom. Offered prices are exceptionally low – reportedly around $1,050/t-$1,085/t for 4 and 6 centiStoke grades.

The first flexi-tanks have been delayed by the 30-day detour around South Africa. The quality of this supply is not on a par with other Group III base oils being offered in the European arena.

The European Group III market could move swiftly into an oversupply scenario with one Middle East Gulf source encouraging their distributor to move at least one extra cargo into the market.

Prices for Group III oils with partial slates of finished lubricant approvals or without approvals rose slightly May 1. These increments appear to have held, but downward pressure appears to be building.

Prices are now at €1595/t-€1635/t for 4 and 6 cSt and at €1,585/t-€1,605/t for 8 cSt, all on an FCA basis ex Antwerp-Rotterdam-Amsterdam and Northwestern Europe. Two suppliers are offering lower numbers of €1,325/t-€1,385/t, again on an FCA basis.

Prices for rerefined Group III are unchanged at €1,475/t-€1,525/t for 4 and 6 cSt, on an FCA basis ex rerefinery in Germany.

Prices for Group III oils with full slates of approvals are unchanged at €1,785/t-€1,820/t for 4 and 6 cSt and at €1,825/t-€1,835/t for 8 cSt, all on an FCA basis ex hubs in Antwerp-Rotterdam-Amsterdam, Northwestern Europe and Spain.

Baltic and Black Seas

The cargo of Russian export barrels remains unconfirmed from either Vyborg or Saint Petersburg. There are rumors from Lagos that offers have been accepted by two buying parties, and that vessel details are being awaited.  No ships have been identified from shipping lists published during last week, and nothing was seen prior to beginning of May.

Russian cargoes can move from Baltic to the United Arab Emirates and Singapore – with safe passage granted through the Bab-al-Mandeb Strait by Houthi rebels – with one cargo of 8,000 tons loaded for receivers in Singapore during the last few days of April. This cargo was loaded out of Saint Petersburg and is believed to have sailed during the last ten days.

Lotos and PK Orlen have little or no availability for “export” outside the Baltic, with all available spot material being supplied into the local markets in Poland or nearby markets.

FOB prices for Russian SN 150 and SN 500 from St. Petersburg have increased again, possibly from May 1. Prices remain at extremely low levels, with numbers assessed at $690/t-$725/t for SN 150 and at $700/t-$750/t for SN 500.

Turkey remains in the doldrums, but there are signs that inflation may be starting to fall. Starting from such a high point, it will take some months – if not years – for the rate to fall to comparative European levels. The high interest rates may be the weapon to control inflation, but should they be cut or withdrawn, then a reversal may occur in the downward trend. One basic problem still exists – that of the devaluation of the Turkish lira – which continues to be eroded against all major currencies.

Sources trying to enlighten this report regarding the government-to- government operation re the import of Russian petroleum products into Turkey – including base oils – have not replied or responded to emails and telephone calls. It is almost as if they have been “warned off” discussing internal government matters outside Turkey.

Turkish base oil markets are awash and almost totally reliant on Russian base oil imports, which are much lower in price than any possible Mediterranean-sourced products. Sellers, such as Motor Oil Hellas and ExxonMobil, either do not have the availability to offer cargoes into Turkey, or their delivered prices are too high for Turkish traders and blenders to consider.

Local supplier Tupras at Izmir refinery still maintain prices, but it is not clear if availabilities of product actually exists. Levels from the refinery are as follows. Spindle Oil $965/t (Tl 31,116), SN 150 $907/t (Tl 29,269), SN 500 $861/t (Tl 27,784) and bright stock at $1,028/t (Tl 33,167). Prices in Turkish lira are ex-rack plus a loading charge of Tl 5,150/t.

Group II ex-tank prices are maintained following recent rises, with levels of €1,265/t-€1,300/t for the three lower vis grades – 100N, 150N and 220N – with 600N now at €1,425/t-€1,495/t. The recent 600N small 2,000-ton cargo from Korea was sold below these prices at $1,260/t but was sold as a single parcel of 2,000 tons to one buyer. Thus the price was CIF, not ex-tank.

Group II base oils may be sourced from the Red Sea, the United States, South Korea or Rotterdam, although supplies from South Korea may currently be restricted due to the Red Sea problems.

Partly-approved Group base oils are sold on an FCA basis, including Russian Tatneft 4 centiStoke grade priced around €1,460/t. Supplies which had previously arrived from the U.A.E., Bahrain and Asia-Pacific, and which remain in stock, are maintained at €1,575/t-€1,620/t FCA.

Fully-approved Group III grades from Cartagena refinery in Spain, delivered into Gemlik and resold by traders on an FCA basis to local blenders, have prices maintained at €1,960/t-€1,995/t FCA.

Middle East

Shipping problems continue to hold and prevent the movement of base oil cargoes from Yanbu and Jeddah. Many vessel owners remain out of the market, with protection and indemnity insurance clubs not permitting vessels to enter designated waters where Houthi strikes have targeted merchant ships, which are not registered in China or Russia. It has been announced from Yemen that cargoes belonging to Russia or China will also not be targeted, but quite how this works remains a mystery.

Sources in the U.A.E. have again told this report that Saudi representation has been made to Yemeni government, to allow vessels safe passage through the Strait, but no absolute confirmation of this activity has been established. 

Northbound vessels that have sailed south through the Suez can be chartered by Luberef, but there are not many vessels prepared to make the Suez transit and then make the return voyage. Cargoes are loading, but these are smaller and fewer than the large 18,000-20,000-ton parcels that ideally would load out of Yanbu and Jeddah for the west coast of India and the U.A.E.

Middle East Gulf regions remain on edge, with the new developments regarding the proposed Israeli ground invasion of Rafah in southern Gaza. Many are trying to move on in business but are constantly reminded that Iran – or one of its proxies – could go into action against Israel, sparking a new round of aggression in the region.

Tensions remain high in and around the Middle East Gulf, but there are supply and shipping problems to be solved. It can be obtaining supplies of additives and base oils to maintain blending plants and keep a workforce employed. Or it can be finding containers and vessels to make deliveries to customers outside the region.  

Further reports of Iran’s predicament are being aired daily in the press and media. Inflation is running at very high levels above 35%, with prices for some goods leaping by more than 300% in one year. Western sanctions have blocked oil revenues, and these crucial economic events have wiped out middle class wealth, which was a cornerstone of Iran and its economy. Government debt is enormous, and unemployment and corruption are at an all time high.

The Iranian currency, the rial, is being devalued every day.

Russian base oils continue to be delivered into U.A.E. receivers, but now with higher prices, with indications CFR at $775/t for SN 150 and $795/t for SN 500. A parcel of around 5,000 tons loaded from Limas terminal in Turkey for receivers in Hamriyah. The delivering vessel apparently had no problems going through the Bab-al-Mandab Strait. The vessel used to deliver the Russian cargo expressed interest to take a Group III cargo back to Turkey, but the vessel was declined as unsuitable.

An international trader, with people based in the U.A.E., offered a base oil cargo into Nigeria, with what is thought to be Russian base oils on board. The cargo would be imported into the U.A.E. and then re-exported to Nigeria, accompanied by a U.A.E. certificate of origin. Prices are lower than other traders would appreciate and are contributing to pulling the Nigerian market down.

Netbacks for Group III exports from the Middle East Gulf for partly-approved base oils from Al Ruwais and Bahrain are lower. Distributors are negotiating lower FOB prices from producers to be able to cover the increases in shipping costs that have come about due to the avoidance of Houthi activities in the Red Sea.

Netbacks are now indicated at $1,425/t-$1,475/t for the 4 centiStoke, 6 cSt and 8 cSt partly-proved Group III grades.

Netbacks for gas-to-liquid Group III+ base oils from Ras Laffan in Qatar are maintained and are estimated around $1,500/t-$1,560/t. This is mainly due to the transportation of base oils from Ras Laffan, which is an internal company transaction, and this report is not aware of how the cost allocation process is conducted for these movements. The GTL base oils are used almost exclusively within Shell’s blending system.

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

Group II base oils selling ex-tank in the U.A.E., or on a truck- delivered basis in the U.A.E.  and Oman, have prices maintained. Less material is available from Luberef, with fewer cargoes arriving from Yanbu, leaving a tighter market situation. Buyers are presently looking at alternative sources, like South Korea or Singapore, to cover requirements. Selling levels remain unchanged at $1,685/t-$1,725/t for 100N, 150N and 220N, with 600N at $1,775/t-$1,825/t.

The high ends of the ranges refer to road tank wagon deliveries to buyers in the U.A.E. and Oman.


South African shipping agency sources in Durban are awaiting the arrival of the latest large cargo, which should be arriving around the end of May. This cargo will only discharge into Durban. 

Information is that a further large cargo will be dispatched towards the end of June, and it may include the delivery of a quantity of base oils into Mombasa. 

The 8,000-10,000 tons Russian cargo has not yet loaded out of the Baltic with three Russian base oil grades – SN 150, SN 500 and SN 900. There may be shipping problems in arranging a vessel to take the cargo. The trader in question is negotiating with suppliers in Russia to put together the cargo, but when this will be completed is pure guesswork. Prices were offered to two receivers in Lagos. The cargo will ideally load out of either Vyborg or St. Petersburg in the Baltic. A Minsk-based trader will probably charter a vessel and deliver to two receivers in Lagos. How payment will be made is not known, but extended credit and at least part payment in naira are possibilities.

More problems are moving against traders doing business in Nigeria. The naira exchange rate is unpredictable and weakening all the time against the dollar. It is involving many millions of naira exchanged into dollars on the black market, which takes time and effort. It also poses a risk that dollars are not available and that delays to payments can run to months.

The banking system is totally broken and doesn’t work, with little access to dollars. Receivers are paying when they can, with no guarantees of all payments being made. Demurrage and often detention are facts of doing business in Apapa, with claims hardly ever being paid, adding extra costs that can be ascertained following the discharge of the cargo.

No further cargoes are currently being sourced from the U.S. for the Nigerian market. Traders are opting to take a break from the market, citing the difficult trading and accounting situations that present themselves in doing business in Nigeria.

CFR Apapa future prices are indicated in higher ranges at around $1,055/t-$1,085/t for SN 150, $1,120/t-$1,145/t for SN 500 and SN 900 at around $1,175/t-$1,190/t. Prices reflect higher FOB levels and increased freight and finance costs.

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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