Weekly EMEA Base Oil Price Report


Base oil trade in Europe, the Middle East and Africa is gathering pace with a few notable exceptions, such as West Africa, where the start of the rainy season which will naturally curtail activity.

Nigeria is running especially strong against the overall trend as there is every likelihood that base oil imports will totally cease unless the government sorts out the banking problems and payment issues that are plaguing the country.

In Europe demand is rising for API Group I and II base oils due to increasing demand for finished motor oils. Demand for industrial lubricants in the region remains subdued, perhaps due to sluggish economic recovery in economic centers such as Germany, the Benelux countries and France.

The United Kingdom is experiencing slight growth, but with a general election looming on July 4, the market is cautious. Mediterranean regions are showing increased demand for base oils and finished products.

The Middle East continues to be dominated by the conflict in Gaza. There is talk of an imminent ceasefire that would bring the release of a number of hostages and humanitarian aid to Gaza, but it is too early to say if that will come to fruition. The war between Russia and Ukraine also rages on.

These uncertainties are affecting all manner of trade and commercial activities, base oils being part of the larger picture. A demand rebound is being stymied by the collective conflicts. For example, Houthi rebels still control parts of the southern Red Sea, causing shipping detours that increase transportation times and costs for shipments between Asia and Europe.

Crude oil prices fell steeply since last week despite a decision by OPEC+ countries to extend production caps in an effort to prop up prices. Saudi Arabia and Russia persuaded other members to commit to maintain current cutbacks, which add up to 5.8 million barrels per day – some for an addition three months to the third quarter of this year, others through the end of 2025.

Despite the Opec+ announcement, dated deliveries of Brent crude dropped Tuesday to $76.85 per barrel, now for August front month settlement, while West Texas Intermediate declined a similar amount to $72.60/bbl, for July front month.

Low-sulfur gasoil prices are down almost $55 from the last report to $698 per metric ton, for June front month. This product is trading at the lowest premium to crude since before Russia’s invasion of Ukraine. All of these prices were obtained from London ICE trading Tuesday June 4.


Group I exports from Europe do indeed appear to be an aspect of the past as either the arbitrage has closed on former destinations or economics are no longer practical because of the extra cost of traveling around the southern tip of Africa to the United Arab Emirates or India.

Instead, imports of Group I cargoes have been noted from the United States, the Red Sea region and Egypt.

Nigeria, is currently out of bounds for any rational trader due to the financial situation in that country. To summarize, even if there were available quantities of Group I base oils within Europe, there would be few, if any, destinations to target. With the rainy season about to begin, things are only going to get worse in Nigeria.

One oil major continues to supply Group I base oils into receivers in Guinea, Cote d’Ivoire and Ghana under contracts, but these are term deals that cannot be truly designated as export sales.

Group I trade within Europe remains tight, with specific shortages occurring in a number of areas. There have been and still are, a number of planned maintenance turnarounds, including a six-month shutdown at Mol’s refinery in Szozhalombatta, Hungary. Apparently base oils may be produced after four weeks of downtime, but how this will happen without a ready supply of feedstock has not been declared.

A number of imported cargoes have eased the supply situation. After prices rose in May, there has been no notification of further markups this month, and with gasoil prices falling, upward pressure on base oil values has eased.

There is talk of a Group I cargo coming into the U.K. from a trader load the parcel out of El Dekheila port in Egypt. The trader reportedly chartered a vessel to carry a combined 5,000 tons of three grades of base oil, including bright stock that originated in the U.S. The origin of the other two grades is unknown.

The two fires that temporarily sidelined base oil plants in April and May have affected local supplies of Group I base oils. Production at ExxonMobil’s refinery in Port-Jerome, France, is due to resume around now, with material probably becoming available around mid-June. The interruption at Repsol’s refinery in Puertollano, Spain, is affecting supply to the local market and to blenders in Portugal and Italy.

Prices for Group I sales in Europe are unchanged at between €1,060/t and €1,150/t for solvent neutral 150, at €1,075/t-€1,175/t for SN500 and at €1,355/t-€1,425/t for bright stock. The dollar exchange rate to the euro was flat the past week, posting Monday at $1.08575.

Group II prices increased in April and remain strong. Group I price levels had closed the differential between the two base oil groups, but have now stopped rising, relieving some upward pressure on Group II values. The premium to diesel has improved significantly.

On the other hand, Group II prices have steadily risen in the U.S., a significant supplier to Europe. The forecast for hurricane season in the U.S. is severe, encouraging refiners on the U.S. Gulf Coast to lay away more inventory. The parties trying to look at purchasing cargo lots or flexies directly from U.S. sources have chosen a bad time to initiate this exercise and may now wait until later in the year before reopening discussions.

Group II prices are unchanged this week at €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 base oils from European, U.S. and Red Sea sources, all imported in bulk.

Attempts to raise Group III prices have met varying degrees of success with some suppliers able to apply not insignificant increases to most of their customers while other have struggled to push numbers higher. The market was oversupplied recently but stocks are now running down, and there are problems with replenishment cargoes arriving in time to take up the slack.

Suppliers of Middle East Gulf cargoes are having difficulty finding suitable vessels willing to make the detoured voyage to Europe without raising freight rates to unacceptable levels. There are also problems with persuading owners to allocate vessels for chartering, leading to a dearth of available tonnage to lift cargoes.

Demand remains sluggish, in part because of blenders switching to Group II formulations. Additive costs may be higher for such approaches, but the potential savings in base oil costs make it attractive.

The trader selling Chinese Group III base oils in the U.K. market has not confirmed whether there will be follow up deliveries of these base oils, and the quantity of material due to arrive this month is unknown. Specifications are lower than other Group III oils in the market, but prices are exceptionally low – reportedly $1,050/t-$1,085/t – and buyers plan to use them in applications where higher specs are not required.

European prices for Group III oils with partial slates of finished lubricant approvals or without approvals are slightly higher this week at €1,625/t-€1,655/t for 4 and 6 centiStoke grades and €1,595/t-€1,620/t for 8 cSt, all on an FCA basis ex Antwerp-Rotterdam-Amsterdam or Northwestern Europe.

Two suppliers continue to offer lower numbers – €1,425/t-€1,450/t on an FCA basis.

Prices have also risen on rerefined Group III – to €1,500/t-€1,535/t, 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 €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

No Nigerian cargoes have loaded out of the Baltic, with many of the traders engaged in supplying base oils to Nigeria taking a step backwards, due to the impossible payment situation happening in that country right now. Gone are the days of having a letter of credit opened by a local bank in Lagos, and then proceeding to have that instrument confirmed by a prime European bank, payment being guaranteed within the allotted number of days, normally 30 from date of bill of lading.

Nowadays, part payments for the cargo are made in naira, and the seller has then to go to the black market to exchange naira into dollars. This is also becoming difficult because even the black market does not have access to dollars. Hence, sellers could be waiting months for final payment for the cargo. The naira exchange rate is a disaster, and with payments in the hands of the buyers, there is no guarantee that the sellers will receive payment at all.

Even the bravest traders, armed with Russian barrels, are shying away from this market, since the risks are just too many.

Cargoes are sailing from the Baltic to India and Singapore with Russian export base oils on board, the vessels having safe passage through the Bab-al-Mandeb Strait. Seventy thousand tons of Russian base oils have been imported into India this year, part of this quantity having been loaded from Limas terminal in Turkey, using material from Volgograd refinery. Following the closure of Kaliningrad, Baltic cargoes tend to be loaded out of Saint Petersburg.

There may be more cargoes loading out of the Baltic, following the attack on Volgograd refinery, which may have caused damage to the base oil production. Supplies of Russian export barrels may be diverted to Perm refinery, which is closer to the Baltic terminals in St. Petersburg and Vyborg. With no Svetly terminal in operation, there are no trains transiting through Lithuania, which was always a contentious issue, following the European Union ban on Russian hydrocarbons.

FOB prices for of Russian SN 150 and SN 500 from St. Petersburg or Vyborg have risen, but not by much, although numbers are still at extremely low levels. From calculations done based on offered prices in Nigeria, levels would netback at $710/t-$735/t for SN 150 and at $740/t-$765/t for SN 500. SN 900 would be priced at around $795/t, since this grade would not be blended using bright stock, but would use SN 1200, which is much lower in price than bright stock.

Lotos and PK Orlen have no availabilities of Group I base oils for FOB Gdansk offers. All availability from that refinery are being ploughed into the local markets, where Group I is particularly short due to MOL going down in Hungary.

On talking to Turkish blenders, they have indicated that the lubricants market is on its knees, with a number of blending operations going to the wall. One source explained that they were unable to obtain any European quality base oil, since either suppliers had no availabilities, or the prices were so high that it would be impossible to lay hands on dollars to open the letter of credit. Russian base oils are flooding the market – discharging in Gebze and Aliaga – with each cargo being 5,000-10,000 tons, made up of SN 150 and SN 500.

Russian barrels are priced on a CFR basis into Turkey at around $825/t-$850/t for quantities of SN 150, with SN 500 only a few dollars higher at $835/t-$865/t. No European supplies can come near these prices. Hence, the market is run by Russian suppliers dumping base oils into a declining market.

Inflation – being at the root cause of many of the problems in Turkey – is coming lower, but having started from a very high point, is still very high compared to other European countries. The latest official level is published last week at 52%. Interest rates are also being pulled back, which may allow inflation to take hold again and start climbing back to the levels around 72%.

Because of high interest rates, private and corporate borrowing is almost impossible. With little or no investment taking place, several well-known blenders have gone bust.

From Izmir refinery, Tupras have the following prices, but it is not clear if availabilities are in place. Spindle oil (Tl 33,475/t), SN 150 (Tl 28,351/t), SN 500 (Tl 30,258/t) and bright stock at Tl 41,129/t. Prices in Turkish lira are ex-rack plus a loading charge of Tl 5,150/t.

Group II ex-tank prices are maintained at the new higher levels from June 1, with prices now at €1,290/t-€1345/t for the three lower vis grades – 100N, 150N and 220N – and 600N now at €1,475/t-€1,525/t.

Group II base oils were previously imported from the Red Sea, the United States, South Korea or Rotterdam sources, but now Russian Group II grades are offered into Turkey that are considerably lower in price than other imported material. Cargoes and flexies from South Korea are restricted due to Red Sea problems. The Petrofisi tender has apparently not been finalized, and it was not clear if any sellers had actually offered prices for the tender for 20,000 tons per annum of Group II base oils.

Partly-approved Group III base oils – sold on an FCA basis, including Tatneft 4 centiStoke – are priced at around €1,460/t. Supplies in tank that were previously imported from the U.A.E., Bahrain and Asia-Pacific have FCA prices at €1,625/t-€1,670/t.

Smaller quantities of 800-1,200 tons of fully-approved Group III grades from Cartagena refinery in Spain are being delivered into Gemlik. They are subsequently resold on an FCA basis to local blenders, with prices maintained at €1,960/t-€1,995/t FCA.

Middle East

Some vessels are being loaded in Yanbu and Jeddah for supplies of Group I and Group II base oils to the west coast of India and the U.A.E., but how only certain vessels are being utilized is not clear. Large cargoes of up to 18,000 tons of multiple grades are being delivered into Mumbai anchorage, Fujairah, Hamriyah and Jebel Ali. However, some cargoes are being delayed or cancelled, so quite how the system is working is an issue.

Regular receivers of Group I and Group II base oils in the United Arab Emirates, which are normally sourced from Yanbu and Jeddah, report problems getting deliveries. Luberef appears to have problems finding all the vessels required but is finding sufficient tonnage to keep supplies turning over. There are possibilities that Saudis have chartered vessels under the Chinese flag. Vessels flagged by Russia or China will not be targeted, this may be one method to have loaded parcels moving to India and the U.A.E. during the Houthi aggressions.

With a chance of a ceasefire between Israel and Hamas in Gaza, the Middle East is waiting with bated breath to see how this situation evolves. The U.S has been instrumental in pushing for the ceasefire, which would allow Israeli hostages to be released and humanitarian aid to get access to Gaza civilians, who are desperate to lay hands on food, water and medicines.

Houthi rebels in the Red Sea continue to affect container and tanker traffic, but if there were to be a ceasefire arrangement, this could allow vessels to transit the Bab-al Mandeb Strait in the southern Red Sea. This cessation of attacks could herald the end of the rerouting around the Cape of Good Hope, but whether Houthi rebels could be trusted to desist from attacking western vessels is unclear, and it may be down to the behest of their masters in Iran to advise. Indian-flagged vessels are rumored to also have been given safe passage through the Strait by the Houthis, but this information is unconfirmed at the time of this report. More details are being sought.

For Middle East Gulf companies, obtaining additives and base oils has been difficult at best and often impossible, with long delays and cancellations. In reverse, shipping Group III cargoes from Bahrain, Qatar and Al Ruwais has become harder because there are fewer vessels in the Gulf, with those available being expensive to charter, given the extra voyage time and operational logistics of the trip.

Iranian base oil producer Sepahan raised prices again for the SN 500+ grade, with numbers moving upwards by around $30/t. Prices already lifted by $50/t during May. Iranian-flagged or other vessels prepared to load Iranian base oils are not identifiable when delivering cargoes to the U.A.E. or the west coast of India, and other vessels based in the west will not offer to load out of Iranian ports.

Group I imports continue to arrive in Hamriyah and Ras al Khaimah from Thailand and Indonesia, where the 5,000-ton Group I sale tender was scrapped because prices bid were too low for acceptance.

Russian base oil cargoes are arriving into U.A.E. receivers with price indications heard from one source on a CFR basis at around $795/t for SN 150 and $810/t for SN 500. A number of parcels of 5,000-8,000 tons loaded out of Limas terminal in Turkey for receivers in Hamriyah, but this may start to change if the rumors of damage at Volgograd refinery are confirmed for base oils. Sellers may start to look for larger ships to take more material out of the Baltic, although that voyage would certainly be higher in cost.

Netbacks for Group III exports from the Middle East Gulf for partly-approved base oils from the U.A.E. and Bahrain are once again maintained at existing levels. That was following distributors having negotiated lower FOB prices from producers Adnoc and Bapco, which would go towards compensating for increased shipping costs due to the deviation around the Cape, avoiding 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-approved Group III grades.

Netbacks for Shell gas-to-liquid Group III+ base oils from Ras Laffan in Qatar also remain unchanged and are assessed at around $1,500/t-$1,560/t. Cost allocation aspects of these cargoes are not disclosed by Shell.

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. Traders are looking at alternative supply sources in South Korea or Singapore, to cover for uncertainties and the problems with cargoes coming out of Yanbu and Jeddah. Selling levels are put 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 remote locations in the U.A.E. and Oman.


The large cargo for Durban has arrived and discharge is believed to be underway. South African shipping agency sources in Durban confirmed this information during last week.

A further large cargo will be sent from Rotterdam and Fawley in June, although with maintenance starting in Singapore at Jurong, there may also be commitments to run material from Europe to Singapore to cover requirements during the turnaround. The South African parcel may be delayed but could include a quantity of Group I base oils, perhaps around 5,000 tons, for discharge in Mombasa. 

In Nigeria it would appear that almost everyone is getting cold feet when it comes to supplying cargoes of base oils into this market. Even the bravest of Russian and Belarus traders seem to be hesitating before making a commitment to deliver base oils into Apapa. Sources in Lagos confirmed that Russian price levels are setting the market, but it would appear that traders trying to offer have been told that they have to compete with the Russian prices, or no deal is possible. Given the payments situation, most trades are not wasting time on this market, which is in danger of receiving no base oils in the coming months.

The rainy season is about to get underway in the next few weeks, which will last through until September and will slow down the market even more than the current financial problems which are insurmountable.

The problems in Nigeria just keep coming, with access to dollars impossible, even on the black markets. Zero dollars are available, and local banks cannot apply to the Central Bank for foreign currency since none is available. The naira exchange rate is over 1,580 to the dollar, which would mean payments for cargoes possibly taking months, or sellers not being paid at all. There would be little comeback or redress if buyers held the upper hand when it comes to payments. An impossible situation, which if continuing, will end all supplies of base oil into Nigeria.

The cargo to be loaded out of either Alexandria or El Dekheila is comprised of 5,000-6,000 tons of bright stock, which was purchased from a U.S. Atlantic coast refinery. Some of this quantity formed part of a cargo that was sent to the U.K., but the remaining quantity would go into a blend with “other” base oils to produce a quantity of SN 900. Additional SN 150 and SN 500 would make up the balance of the parcel, which is due to be delivered into Apapa. Part of the cargo is sold to Nigerian National Petroleum Corp., but already there has been a delay to shipment of more than a month, with possible payment issues being at the core of the delay.

One trader investigating U.S. sources for a cargo appears to have given up. With at least two other traders taking a backseat for the time being – not interested in offering for material going into the Nigerian market – others will probably follow until the payments and banking system gets sorted out.

Without suitable payment terms, there are real risks in supplying base oil cargoes into Apapa. There are no payment guarantees, and with payments in receivers’ hands, it is not a situation to be in this country.

CFR Apapa prices for potential future trades, other than Russian barrels, are indicated at around $1,110/t-$1,145/t for SN 150, $1,175/t-$1,200/t for SN 500 and SN 900 at around $1,255/t-$1,235/t. But Russian offers are much lower. Levels remain indicated at $930/t for SN 150 and $970/t for SN 500, with SN 900 at $1,020/t. These levels cannot be matched.

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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