Weekly EMEA Base Oil Price Report


Sunday’s death of Iranian President Ebrahim Raisi raised levels of trepidation in the Middle East, leaving players in the region’s base oil markets – along with residents, governments and the overall business sector – conjecturing about potential impacts on the conflict between Israel and Hamas.

Raisi, who had been viewed by some as a likely successor to Ayatollah Ali Khameini, died in a helicopter crash along with the country’s foreign minister and other officials, possibly setting up a vacuum in the pecking order in Iran. An election is to be held within 50 days to select his replacement.

Iran announced five days of national mourning, but it is difficult to know how this event could impact or shape the current conflict in Gaza. Hamas is one of Iran’s proxy organizations, along with Hezbollah in Lebanon and the Houthis in Yemen.

It might have been expected for the accident to cause a spike in crude oil prices, but in fact there has been little economic reaction.

Meanwhile in Ukraine, the Russian military reportedly made inroads to territory that Ukraine had regained in recent months. As mentioned here previously, both conflicts affect base oil markets, along with economies at large and geopolitics.

While crude prices remained static, base oil prices are rising due mainly to limited availabilities and an upswing in demand that caught some players off guard. API Group I and Group II prices increased across Europe, the Middle East and Africa, incentivizing refiners to increase base oil runs. 

Group III values are being pushed slightly higher by distributors who cite higher costs incurred by detouring around the Cape of Good Hope to reach Europe from the Middle East and Asia. Estimates are that rates have increased by between $70 and $100 per metric ton.

Crude oil prices flatlined over the past week in spite of current events – possibly in part because demand remains weaker than normal for this time of year. Russia is exporting large swathes of crude to India and China at discounted prices due to war sanctions imposed by the European Union and a number of nations.

Dated deliveries of Brent crude ended Monday at $83.40 per barrel for July front month settlement, while West Texas Intermediate crude was little changed at $79.50/bbl, still for June front month.

Low-sulfur gasoil prices were at $759 per metric ton, just $3 higher than a week ago, now for June front month. This product is at its lowest premium to crude for some time, and with demand muted, the premium may not improve for a while.

All of these prices were obtained from London ICE trading late May 20.


No suppliers in Europe have sufficient surplus quantities available to offer to export markets, and many traditional destinations have been taken over by alternative sources. India and Middle East Gulf markets are being supplied more and more from Asia-Pacific suppliers – from markets such as Singapore, China, Thailand and Indonesia. 

Another past European favorite – Nigeria and other parts of West Africa – are in a dreadful state now because traditional suppliers from other places have stopped sending cargoes due to finance problems. With no access to dollars and a deteriorating exchange rate, business is impossible.

A number of major maintenance turnarounds are underway or looming, and these will further constrict the Group I market.

Within Europe, Group I is becoming tighter after fires at plants in France and Spain and the shuttering of a large plant in Livorno, Italy. Prices have stayed steady since increases of up to €75/t a few weeks ago, with no reports of discounting. Light neutrals and bright stock remain exceptionally tight, with more reports of buyers trying to source from distant suppliers and a number of large blenders looking to purchase cargo-sized parcels.

Some traders are actively looking to take material into Europe and resell to smaller buyers unable to handle larger parcels – whether because of financing or storage constraints.

A major Spanish producer has only small quantities of solvent neutral 150 and bright stock available for May. Italian buyers are encountering difficulty covering requirements after the closing in Livorno.

Prices for Group I sales within Europe are now assessed at €1,030/t-€1,075/t for SN150, €1,055/t-€1,095/t for SN500 and €1,325/t-€1,365/t for bright stock. The dollar exchange rate to the euro rose marginally to past week to $1.08632 Monday.

Group II prices have also increased, but their premium over Group I prices has narrowed. Group II prices increased by around €40/t-€50/t earlier. Larger buyers have approached sources in the U.S. to buy cargo lots in bulk, and some others are looking to purchase quantities in flexi-tanks.

Sources suggested last week that these importers would buy for their own use, but also offer material on a resell basis to smaller blenders, literally becoming new traders. This practice could be economically efficient, and whilst capital would be tied up in stock, savings could be enough to offset this cost. With interest rates forecast to come down in Europe during the next few months, there could be further advantages to be exploited.

European demand for Group II base oils is rising, partly due to increased requirements for passenger car motor oils.

Group II prices rose slightly the past week to €1,075/t-€1,100/t ($1,170/t-$1,195/t) for 100 neutral and 150N, €1,125/t-€1,155/t ($1,220/t-$1,255/t) for 220N and €1,235/t-€1,290/t ($1,340/t-$1,400/t) for 600N. All of these prices apply to a range of Group II oils from European, United States and Red Sea sources, all imported in bulk.

Group III imports being sold in Europe have incurred extra costs for the detour around Africa’s southern tip, thanks to attacks by Yemen-based Houthi rebels on commercial shipping in the Red Sea. These cost increments are causing some upward pressure on prices, but that pressure is being offset by plentiful availabilities from a growing number of suppliers – some offering quite low prices.

Demand is not at peak level because some blenders have worked with additive suppliers to enable switches to Group II grades. Such an approach requires some time and expense, so not all lubricant companies are adopting it.

One base oil trader has offered supplies of Group III froom China into the United Kingdom market, selling to a limited number of receivers that can use the lower specification material. Prices are exceptionally low at $1,050/t-$1,085/t, but quality and specs are not prime.

European prices for Group III grades with partial slates of finished lubricant approvals or with no approvals are unchanged at €1,595/t-€1,635/t for 4 and 6 centiStoke 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 heard offering €1,375/t-€1,410/t.

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 proposed cargo of Russian export barrels for Nigeria still appears to remain in tank or at the refinery, and still has not been shipped. The cargo would load out of either Vyborg or Saint Petersburg, with a previous cargo January loaded from Vyborg with 6,000 tons of three Russian grades – SN 150, SN 500 and SN 900. No current vessel has been identified.

Russian cargoes are moving from Baltic to India and Singapore, with safe passage granted through the Bab-al-Mandeb Strait by the Houthi rebels. This year, 40,000 tons of Russian base oils were imported into India, an increase of around 30,000 tons when compared with the same period in 2023. Most of this quantity is believed to have been loaded through Limas terminal in Turkey, using material from Volgograd and Perm refineries. With the closure of the Kaliningrad operation in Svetly, Baltic cargoes would have loaded from St. Petersburg. It is not known how many cargoes were loaded out of the Baltic. Vessels frequently took large parcels from the Baltic to receivers in Singapore, prior to and following the European Union ban on all Russian base oils and other hydrocarbons.

FOB prices for Russian SN 150 and SN 500 from St. Petersburg or Vyborg are maintained, although numbers are still believed to be at extremely low levels. Working on a netback basis from offered prices into Nigeria, levels are assessed at $690/t-$720/t for SN 150 and at $725/t-$735/t for SN 500. SN 900 would come out at around $785/t.

Lotos and PK Orlen have no availabilities of Group I base oils for offers to load for “export” to the U.K. or northwest Europe. From local reports, all availabilities are being channeled into local markets which are relatively short of Group I grades. Prices are higher, giving better returns.

Turkish base oil markets remain dull, with no reported cargoes from any European source making their way into the Turkish ports. A Russian cargo moved from the Baltic to Gebze, with around 5,000 tons of SN 150 and SN 500.

Inflation in Turkey keeps coming down, but it is still relatively high compared to European standards, with the new official number at 58%. High interest rates of around 50% may be starting to control inflation but with talks to lower rates, due to the negative impact on the larger economy. Borrowing is out of the question for companies and individuals, hence little or no investment has been made in capital projects. With maintenance and repairs kept to a minimum to keep costs down, several blenders are looking at rundown equipment and facilities, while trying to keep turning over trades for finished lubricants. 

Still no information has been received from sources regarding the processes by which the government-to-government petrochemical supply scheme running between Russia and Turkey for the importation of petroleum products into Turkey, including base oils.

Turkish base oil markets are almost totally reliant on Russian base oil imports, which are much lower in price and specification than Mediterranean-sourced products. Sellers such as Motor Oil Hellas, ExxonMobil, Repsol and Cepsa receive requests for offers. Often, availabilities are poor, and offers cannot be made, but when anything is available, delivered prices are too high for Turkish buyers.

Tupras at Izmir refinery re-issued prices: spindle oil (Tl 32,966/t), SN 150 (Tl 27,669), SN 500 (Tl 29,434/t) and bright stock (Tl 39,142/t). Prices in Turkish lira are ex-rack plus a loading charge of Tl 5,150/t.

Group II ex-tank prices remain unchanged, with levels at €1,265/t-€1,300/t for the three lower vis grades – 100N, 150N and 220N – and 600N at €1,425/t-€1,495/t.

Group II base oils may be sourced from the Red Sea, the U.S., South Korea or Rotterdam, although supplies from South Korea may currently be restricted due to Red Sea problems. Petrofisi issued a buy tender for around 20,000 tons of Group II base oils over a year. This has occurred previously, and nothing ever came of the tender, with many saying that they were merely price-checking. 

Partly-approved Group III base oils, sold on an FCA basis – which include large quantities of Russian Tatneft 4 centiStoke grade – are priced around €1,460/t. Supplies in-tank that imported from the United Arab Emirates, Bahrain and Asia-Pacific have FCA prices maintained at €1,575/t-€1,620/t, but stocks are low and may not be replenished due to shipping and logistical problems.

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

Reports from U.A.E. receivers of Group I and Group II base oils that would be sourced from Yanbu and Jeddah continue to report problems for Luberef finding ships to load large cargoes for the west coast of India and the U.A.E. In the past, large cargoes delivered base oils into receivers in Fujairah, Ras al Khaimah, Hamriyah and Jebel Ali, but these are few and far between these days. The Houthis are still controlling the southern Red Sea and will attack merchant ships if trying to run the gauntlet through the Bab-al Mandeb Strait.

Cargo numbers were vastly reduced from the Saudi ports, with vessel owners and operators declining to send vessels into the Red Sea with no protection and indemnity insurance club coverage for hull and crew. Cargoes belonging to Russia or China will not be targeted, with parcels moving to India and the U.A.E. during the last few months. How this works remains unknown.

Northbound vessels – having made the Suez transit – can be chartered to load parcels of base oils, such as the S-Oil Group I cargo that went into Antwerp-Rotterdam-Amsterdam.

Worries in Middle East Gulf regions have been ratcheted by the Sunday night helicopter crash in Iran that killed the country’s president, Ebrahim Raisi, along with his foreign minister, the helicopter’s crew and other passengers, casting the country into a period of uncertainty while the leadership positions are filled. There is no indication of foul play, but conspiracy theories can take off, and there are concerns that Iran or a proxy such as Hezbollah in Lebanon could respond with an action against Israel, potentially escalating conflict in the region to another level.

The Houthi problems in the Red Sea continue to limit the shipping opportunities from, and to, Middle East Gulf ports. Supply and shipping problems remain to be solved. For example, obtaining supplies of additives and base oils can be problematic if supplies are coming from the West, and shipping of Group III cargoes from Bahrain, Qatar and Al Ruwais has become a major headache with a shortage of suitable vessels willing to make the extra long voyage around the Cape.

It has been reported that Iranian Sepahan prices for SN 500 have been raised by another $10/t during last week, but where any FOB sold cargoes are moving is not common knowledge. Iranian-flagged or other vessels prepared to lift Iranian base oils are not identifiable when delivering cargoes to the U.A.E. or the west coast of India.

Group I imports continue to arrive in Hamriyah and Ras Al Khaimah from Thai Lube in Rayong and from Pertamina in Indonesia, where a 5,000-ton Group I sale tender closed, with this quantity perhaps going into a U.A.E. port.

Russian base oils are being delivered into U.A.E. receivers with price indications CFR around $785/t for SN 150 and $800/t for SN 500. A number of parcels of 5,000-8,000 tons loaded from Limas terminal in Turkey for receivers in Hamriyah. Vessels are granted safe passage by the Houthi rebels.

A trader offering for a base oil cargo to be delivered into Apapa in Nigeria, has shied away from the cargo from the U.A.E. It may still be feasible to make this delivery, but some receivers in Lagos are reticent to accept Russian barrels even with a U.A.E. certificate of origin.

Netbacks for Group III exports from the Middle East Gulf for partly-approved base oils from the U.A.E. and Bahrain are maintained at existing levels. Distributors have negotiated lower FOB prices from producers to be able to cover part of the increased shipping costs due to the deviation around the Cape of Good Hope to avoid Houthi attacks in the Red Sea.

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

Netbacks for Shell gas-to-liquid Group III+ base oils from Ras Laffan in Qatar also remain unchanged, estimated at around $1,500/t-$1,560/t. The transportation of base oils from Ras Laffan is an internal company transaction, with cost allocation details kept property and casualty. GTL base oils are used almost exclusively within Shell’s blending system around the globe.

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

Group II base oils sold ex-tank in the U.A.E., or on a truck- delivered basis in the U.A.E. and Oman have prices maintained this week. Buyers are looking at alternative supply sources, such as South Korea or Singapore, to cover requirements. Selling levels are relatively high and 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 confirmed that they are expecting the arrival of the large base oil cargo, which should be docking in Durban imminently. The cargo will discharge the full cargo quantity in Durban.

A further large cargo may be dispatched from Rotterdam and Fawley in June. This parcel could perhaps include a quantity of three grades of Group I base oils, around 5,000 tons, for discharge in Mombasa.

According to sources in Lagos, Russian prices are the talk of the town, keeping supplies from other sources – such as the United States – out of the equation due to higher prices. The sad truth is that Nigeria has a huge problem region right now, with no dollars available and the naira exchange rate up at 1,580 to the dollar. This would mean payments being delayed, with hassle trying to find dollars on the black market to ship back to “base.”

Talk of a Russian cargo from the Baltic keeps going around Lagos, but there is no evidence that a cargo actually exists and that shipping was planned. No vessel has been chartered to take a quantity to Nigeria, hence it is impossible to speculate on quantities, arrival dates, etc.

Traders and blenders in Apapa are running a risk of getting no supplies of base oil in the near future. Other responsible traders are opting out of supplying base oils into this market because of the low prices being talked by suppliers reliant on Russian material.

One trader is investigating U.S. sources for a cargo. Without getting suitable payment terms, and having to grant extended payment times, there is real risk in supplying base oil cargoes into Apapa at this time. That is because there are no payment guarantees that can be put into place.

The naira exchange rate is rising again and is currently at 1,580 to one dollar. It is unpredictable and is moving all the time against the dollar. It is involving many millions of naira being exchanged into dollars on the black market, which takes time and effort. This process cannot be completed in one transaction and may take many days to finalize. Currently, dollars are not available, and this could delay payments for months.

CFR Apapa prices for potential future trades from the U.S. are indicated 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. But price ideas are being beaten down, with Russian numbers pushed around that are of course are much lower. Levels are heard at $930/t for SN 150, $970/t for quantities of SN 500, and SN 900 at $1,020/t. These levels are unachievable from any other source, such as Asia-Pacific or the U.S.

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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