Weekly EMEA Base Oil Price Report


Conditions for base oil markets are now diverging across Europe, the Middle East and Africa, with availability for API Group I and II oils tightening in some regions while becoming plentiful in others.

The difference depends on where material is being sourced; Middle East Gulf buyers are looking more to Asia-Pacific for these two base oil types, whilst Europe is being topped up with imports from the United States. Prices are rising in the latter market, which could lead to upward pressure on values across the Atlantic.

The scene in Africa is mixed. Some West African markets are being attended to by contracted supplies of Group I from a specific international oil major, whilst in Nigeria, problems continue unabated, and the market is now being starved of supplies because receivers are unable to properly satisfy seller payment terms due to the banking system and government ineptitude.

In South Africa and East African markets, demand is increasing, and some buyers are turning to alternative supply sources such as South Korea, China and Indonesia for both Group I and II. With a major maintenance turnaround taking place in Singapore, Group II availabilities going into East Africa are tighter than previously seen, although some of the slack is now being taken up by South Korean suppliers that have completed their turnarounds and are back competing for new market shares.

Markets are in a state of flux for many reasons – some stemming from the conflicts in Ukraine and Gaza, others down to changes in supply patterns such as dwindling Group I production in Europe, where further capacity reductions seem likely.

Group III trading patterns are also evolving as new production facilities continue to come onstream, affecting opportunities available to existing suppliers. New production from China is affecting market shares in such as India, which is important for Middle East Gulf producers and their local distributors.

The economies of the various regions are playing a major part in the demand cycle for base oils. Sluggish growth in the Eurozone, the rainy season in sub-Saharan Africa and the summer hot season starting in Middle East Gulf regions are all expected to cause declines in demand. Recent interest rate cuts in the European Union have generated some hope. It appears that banking systems in the United Kingdom and other major markets could follow suit, perhaps leading to lower inflation and a period of stability for the markets.

Elections are on the horizon in U.K. and the U.S., meaning directions of industry conditions could shift significantly later this year and into 2025.  

Crude oil markets endured a volatile week but ended up where they were a week ago. Dated deliveries of Brent crude dropped as low as $76 per barrel early last week, with other crudes following similar tracks, despite the announcement of further production cuts from members of the OPEC+ cartel, who hope to push up prices.  

Values did rise the past several days, with Brent hitting $80.25 per barrel, for August front month settlement, and West Texas Intermediate rising to $76.25/bbl, still for July front month.

Low-sulfur gasoil prices are almost identical to the last report, at $729 per metric ton, still for June front month. This product continues to trade at a low premium to crude, in some ways benefitting base oil production by diverting feedstocks from the distillate pool into pushing out larger quantities of base oils.

The above prices were obtained from London ICE trading late May 10.


There is no discernible export market for European Group I oils, other than ExxonMobil moving large quantities of various grades to different parts of Africa. No other European producers have adequate surplus quantities to offer, even if there were receivers to accept.

Imports of Group I cargoes are arriving from the U.S., the Red Sea and Egypt, and an S-Oil cargo is now planned to arrive during July from Yanbu or Jeddah, Saudi Arabia. This delivery may have encountered delalys due to issues accessing suitable tonnage to carry what is thought to be around 5,000 tons of Group I grades. If bright stock is to be included, then the loading will have to be in Yanbu.

Group I producers in Europe are concentrating on markets within the region, where prices are yielding margins that would not be possible for exports.

Group I demand-supply balances within Europe remain snug, and were it not for imports, the market would be short. There continue to be a number of planned maintenance turnarounds, including Mol’s refinery in Szozhalombatta, Hungary, which apparently will close for around six months. News heard last week suggested base oil production might resume after four weeks, but it is unclear where feedstock would come from.

Group I prices within Europe rose in May, but upward pressure on them appears to have eased now that feedstock costs are relatively low and stable.

Repairs appear to have been completed at ExxonMobil’s refinery in Port-Jerome, France, where a fire broke out in April, and base oil production is believed to have resumed. Availability is not yet ready, but word is that regular lifters from this source will be able to resume purchasing around mid-month.

Another fire at the Repsol refinery in Puertollano, Spain, has affected supplies in the local market, but news is that production should restart in a few weeks.

Prices for Group I sales within Europe are unchanged from last week at between €1,060 per ton and €1,150/t for solvent neutral 150, €1,075/t-€1,175/t for SN500 and €1,355/t-€1,425/t for bright stock.

The dollar exchange rate to the euro rose the past week to $1.07386 on June 3.

In the European Group II market, upward pricing pressure is starting to build due to sustained demand growth and upward price movements in the U.S. Apart from one producer in Rotterdam, the vast bulk of Group II material for the European market is imported from U.S. producers, though suppliers from other countries such as South Korea play a smaller role.

Meteorologists have issued severe warnings for the hurricane season in the United States, leading Group II producers there to lay away large quantities as a precaution. This has shortened up supply in that market.

Group II prices in Europe are assessed now at €1,075/t-€1,100/t, ($1,170/t-$1,195/t) for 100 and 150 neutrals, while 220N is at €1,125/t-€1,155/t ($1,220/t-$1,255/t) and 600N at €1,235/t-€1,290/t ($1,340/t-$1,400/t). All of these prices apply to a range of Group II oils from European, U.S., Red Sea and Asia-Pacific sources, all imported in bulk.

Group III prices rises have met varying degrees of success with some suppliers able to apply increases to some of their customers while other sellers have struggled to achieve higher numbers. The Group III market, having experienced a period off freely available material, is now facing delays for replenishment cargoes due to a lack of suitable vessels in Middle East Gulf and of course, the extra voyage time and costs attached to the longer trip around the Cape.

Current stocks are depleting quickly, and unless replenishments are soon to arrive, the market could swing from one where plentiful availabilities prevailed, to a short and tighter scene, waiting for material to arrive.

Luckily demand is not strong, but some blenders are commenting that over the next few weeks, they can see an upswing in demand for finished lubes, particularly PCMOs and HDMOs, although industrial lubricants are still not recovering. This situation could accelerate requirements for Group III base stocks and could create pressure on availabilities across Europe.

European prices for Group III grades with partial slates of finished lubricant approvals or without approvals are unchanged at €1,625/t-€1,655/t for 4 and 6 centiStoke oils and at €1,595/t-€1,620/t for 8 cSt, all on an FCA basis ex Antwerp-Rotterdam-Amsterdam and Northwestern Europe. Some suppliers continue to offer lower numbers of €1,425/t-€1,450/t for 4 cSt, again on an FCA basis.

Prices for rerefined Group III oils are also unchanged at €1,500/t-€1,535/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, on an FCA basis ex hubs in Antwerp-Rotterdam-Amsterdam, Northwestern Europe and Spain.

Baltic & Black Sea

Still no Russian export cargo appears to have loaded out of the northern Baltic bound for Apapa in Nigeria. It would appear that they payment situation is so dire that even traders’ arms are not willing to take the risks with payments in naira, which have to be exchanged into dollars on the black market. This exercise can take months to complete the deal, due to the lack of access to dollars. Sellers would have to maintain a presence or have representation in Lagos to achieve the conversion to dollars. This becomes too expensive and costly, and it can wipe out any and all margins on the cargo.

Cargoes are loading and sailing from the Baltic to India and Singapore with Russian export base oils on board, in addition to delivering into Gebze port in Turkey. Some 70,000 tons of Russian base oils were imported into India this year, making this the largest quantity ever delivered into that country. Following the closure of Kaliningrad, deep-sea Baltic cargoes tend to be loaded out of St Petersburg, where tankage and the rail connections are ideal for transporting 3,000-ton trains from the refineries.

There is insufficient reports to assess the damage to Volgograd refinery, caused by Ukrainian missiles attacking key fuel supply points within Russia. It is not clear whether base oil production has been interrupted by the strike. As a stopgap measure, supplies of Russian export barrels may be diverted from Perm refinery to the south to load out of Azov.

FOB prices for Russian SN 150 and SN 500 from Saint Petersburg or Vyborg are said to have risen, although numbers are still at extremely low levels compared to mainstream European levels. Working back from offered prices into Nigeria, numbers would netback to $710/t-$735/t for SN 150 and $740/t-$765/t for SN 500. SN 900 may be priced at around $795/t.

This latter grade would not use bright stock in the blend but would probably use SN 1200, which is lower in price than Russian bright stock. There are also various heavy neutral grades produced in Russian refineries that may be used, but the specifications will be much lower than the SN 900, which is blended and imported into Apapa from the United States.

Lotos and PK Orlen still report no availabilities of Group I base oils for FOB Gdansk offers. All avails from the refinery are being directed into the local markets, where Group I is short due to MOL going into turnaround in Hungary.

Turkish blenders reported that at least three blenders have gone bankrupt and have closed down. This is the latest in the “disaster” reporting from Turkey, with the economic situation not showing any real signs of improvement. A source confirmed that they were unable to obtain any European quality base oil. That was because either suppliers had little availability, or the prices offered were more than $300/t higher than Russian barrels that are available ex-tank all the time.

Russian Group I base oils continue to flood the Turkish market, discharging cargoes from Baltic into Gebze and Aliaga, with each cargo 5,000-10,000 tons of combined SN 150 and SN 500.

From sources in Istanbul reports are that Russian barrels are being priced on a CFR basis into Turkey at around $825/t-$850/t for quantities of SN 150, with SN 500 higher, at $835/t-$865/t. Even if there were availabilities, European barrels could never compete with these prices. 

Inflation, being at the root cause of many of the problems in Turkey is reported “officially” as lower, but having started from a very high point, it has along way to go compared to other European countries. Last week’s official level was at 51%. Interest rates are also being pulled back, which may give inflation another boost taking the level back up into the 70% range. 

At Izmir refinery, Tupras have issued the following prices, but again, it is not clear if availabilities are in place for all grades. Spindle Oil is at Tl 34,326/t, SN 150 at Tl 29,745/t, SN 500 at Tl 31,829/t, with bright stock at Tl 43,036 Prices in Turkish lira are offered ex-rack, plus a loading charge of Tl 5,150/t.

Group II ex-tank price levels continue to be maintained at the new levels that came in on June 1, with prices at €1,290/t-€1,345/t for the three lower vis grades – 100N, 150N and 220N – and 600N now at €1,475/t-€1,525/t. Sometimes, these grades were sold in dollars, but dollars are unavailable now, hence the reversion to euros.

Group II base oils were previously imported from the Red Sea, the United States, or South Korea, but now Russian Group II grades are offered into Turkey that are considerably lower in price. Cargoes and flexies from South Korea are restricted due to Red Sea problems.

Partly-approved Group III base oils are sold on an FCA basis, including Tatneft 4 centiStoke, which is priced at around €1,460/t. Supplies in tank that were previously imported from the United Arab Emirates, Bahrain and Asia-Pacific had FCA prices at €1,625/t-€1,670/t, but these stocks are largely gone, with zero replenishment due to the Red Sea problems.

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

Middle East

In the Red Sea in ports such as Yanbu and Jeddah, operations are being badly affected by the Houthi rebels in Yemen. However, a few southbound vessels are being loaded in Yanbu and Jeddah with cargoes of base oils for receivers in the west coast of India and the U.A.E. This report has tried to ascertain how only some vessels can be used to take cargoes and beat the Houthi strikes, and unless these vessels are either Russian or Chinese flagged, it was confirmed that all other vessels are liable to be attacked.

One source in the U.A.E. indicated to this report that Indian-flagged vessels may be granted safe passage through the Bab-al-Mandeb Strait by the Houthis, but this has yet to be confirmed from Indian shipping circles. This may be an “unofficial” edict from the Houthis, but it is impossible to inquire and get an answer from that source.

Fighting in Gaza continues, and hopes for a ceasefire plan pushed by the United States are starting to fade.

Bosses at container lines have announced last week that the diversion around the Cape of Good Hope in South Africa will continue at least until the end of this year, and possibly beyond. Container rates have tripled since the Red Sea problems evolved and will continue to weigh on trade moving in both directions, east and west. 

For Middle East Gulf blending companies, getting hold of additives and base oils has been difficult. It is becoming more of a lottery, with sellers unable to find containers to load and unable to find space on ships calling at the correct ports. Long delays and cancellations are common.

Shipping Group III cargoes from Bahrain, Qatar and Al Ruwais has become harder because there are fewer vessels available to charterers in the Gulf, and those available are very expensive to charter, given the extra voyage times and the operational logistics.

Iranian base oil producers Iranol and Sepahan have raised their selling prices again across all the Group l grades, with numbers moving upwards by around $25/t. Prices were already lifted by $50/t during May. It is not clear if these increases apply to Iranian domestic prices, or if they also apply to export quantities that apparently are moving out of Bander Bushire and Bander Khomeini in the south of Iran.

In the U.A.E., Group I imports are arriving in Hamriyah and Ras al Khaimah from Thailand, Indonesia and India.

Russian base oil cargoes discharge into U.A.E. receivers, with price indications heard from a U.A.E. source on a CFR basis at around $795/t for SN 150 and $810/t for SN 500. A number of parcels of 5,000-8,000n tons loaded out of Limas terminal in Turkey for receivers in Hamriyah. The rumors of damage at Volgograd refinery are not yet confirmed for base oils, so it is assumed that Limas will continue to act as a bridging point for cargoes moving to the U.A.E. and to India.

Netbacks pertaining to Group III exports from the Middle East Gulf for partly-approved base oils ex-U.A.E. and Bahrain are maintained at existing levels, following distributors negotiations with producers Adnoc and Bapco.

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 GTL Group III+ base oils from Ras Laffan in Qatar are unchanged and are estimated at around $1,500/t-$1,560/t. Cost allocation aspects of these cargoes is 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. Singapore may be ruled out at the moment, with a major turnaround at Jurong refinery taking place. 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 Durban cargo arrived and discharged. South African shipping agency sources in Durban added extra news during last week.

A further large cargo will be sent from Rotterdam and Fawley, but the timing of this cargo is not yet disclosed because it may depend on vessel availability. The parcel of multiple grades will sail before the end of the summer from Europe. A South African parcel may be delayed but could include a quantity of Group I base oils for discharge in Mombasa. 

Nigerian markets for base oil have basically closed, with no offers, even for Russian material, due to the complexities of receiving payments in a timely and efficient manner. No agreements can be reached with receivers regarding the timing of payments and whether these payments will be made in dollars or in naira. That causes a great deal of trouble and expense to expedite on the local black market. The problem right now is that none of the banks and the “unofficial” markets have access to dollars.

Given the payments situation, most traders are not wasting time on this market, which is in danger of receiving no imported base oils in the near future.

The rainy season is getting underway, lasting through until September. This will slow down the market even more than the current finance problems, which are insurmountable. All in all, one trader has commented that they will not be participating in the Nigerian market until the rain stops and the country gets it banking system back into some shape.

The naira exchange rate is over 1,590 to the dollar, which would mean payments for cargoes possibly taking months, or sellers even not being paid at all. There would be little comeback or redress, with buyers holding the upper hand when it comes to payments. An impossible situation, which if continuing, will finish supplies of base oil going into Nigeria.

A cargo that was to be loaded out of either Alexandria or El Dekheila was comprised of 4,000-5,000 tons of bright stock, which was purchased from a U.S. Atlantic coast refinery. The bright stock 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. This parcel has still not been loaded and is now over a month late. Possible payment issues may be the reason for the delay.

For the sake of good order and to keep the information flow moving, it is decided to continue to show CFR Apapa prices. The number for potential future trades, other than Russian barrels, would be 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.

Russian offers have been much lower. Levels remain indicated at $930/t for SN 150, $970/t for SN 500, with SN 900 at $1,020/t. These levels cannot be matched from any other source.

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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