Weekly EMEA Base Oil Price Report


Across Europe, the Middle East and Africa base oil prices are generally firmer thanks to upticks in demand caused by various factors in each region.

In Europe, API Group l supply has tightened due to a number of maintenance turnarounds, fires at two refineries and the closure of a large Group l source in Livorno, Italy. These factors have combined to make two significant effects: the cancellation of any Group l exports from Europe and a ramp-up of domestic markets, causing higher demand for finished lubricants, particularly in the automotive sector.

Although the rainy season has started in sub-Saharan African states, demand is high for last-minute purchases of lubricating oils in Ghana, Guinea and Cote d’Ivoire. Nigeria is the rogue in the pack, with no imports of base oils taking place due to the financial problems in that country. There appears to be no end in sight for the governmental and banking crises that have hit foreign currency payments for imported commodities.

Other parts of Africa are showing increased demand for Group l, II and III base oils upon the onset of cooler winter months in the continent’s southern and eastern regions.

In Middle East Gulf regions, the effects of the war in Gaza are still being felt, although many players have taken the bull by the horns and sorted out alternative supply arrangements for base oils and additives after a spell of shortages. The markets are settling down into new routines, with local demand for finished lubricants both in the region and surrounding markets building before the hot summer months.

There are fewer arbitrage opportunities open at this time as rising prices in Asia-Pacific and the United States limits availabilities from those regions. Storm seasons are starting in the U.S. and Asia, producers are building inventories as insurance against potential damage to refineries and stock points, further limiting the availabilities for cross global arbitrage.

Crude oil prices recovered during the past week to move around $3 per barrel higher than posted last week. The OPEC+ cartel’s agreement to cut crude output has had to effect since demand is still assessed as slow from major buyers such as China and India – markets that increasingly rely on discounted Russian imports. Sources in India suggested a purchase of Urals crude was made for less than $40 per barrel, on a CFR basis ex main Indian ports. 

Dated deliveries of Brent crude rallied to post at $83.30/bbl, still in for August front month settlement, while West Texas Intermediate climbed to $79.20/bbl, still for July front month.

Low-sulfur gasoil prices gained around $40 last week to $770 per metric ton, now for July front month. This commodity continues to trade at a low premium to crude, incentivizing base oil production, especially in a short market.

All of these prices were obtained from London ICE trading late June 17.


There still is no market for European Group l exports, other than one international oil major moving large parcels of all types of base oil to various destinations in the African continent. No European producer has surplus barrels for export sales of Group l.

There have been imports of Group l cargoes from the U.S., the Red Sea and Egypt, and more cargoes are planned by traders taking advantage of the relatively tight regional markets within Europe. Most of the imports are headed to northern Europe, although there have been suggestions to deliver material into the Mediterranean, either to Italy or Spain. A previously mentioned cargo from Yanbu has been delayed but is thought to have been loaded and to be en route to Antwerp-Rotterdam-Amsterdam.

Group I markets in Europe remain relatively tight, but availabilities are now returning to northern France following a fire in April at ExxonMobil’s Port Jerome refinery. Mol has commenced a turnaround at its refinery in Szazhalombatta, Hungary, but there is still confusion as to whether that extended closure will affect base oil production and availability.

Prices remain firmer, with one or two suppliers appearing to take advantage of the short market by advertising limited availabilities at prices deemed high for the current market. These levels have been incorporated into the spreads detailed below.

The fire at the Repsol’s refinery in Puertollano, Spain, has affected local supplies, but full base oil production will resume soon. The company has announced availability of limited Group I stocks from storage, these being offered at $1,162 per ton for solvent neutral 150, $1,298/t for SN500 and $1,390/t for bright stock, all on an FCA basis ex Puertollano.

Overall, prices for Group I sales within Europe are adjusted to take account of recent moves with FCA levels now assessed between €1,013/t and €1,150/t for SN150, at €1,075/t-€1,215/t for SN500 and at €1,385/t-€1,445/t for bright stock. The dollar exchange rate to the euro flatlined last week, posting on Monday 3rd June at $1.07145 on June 3.

Group II prices are rallying as more expensive imported material arrives from the U.S., exerting upward pressure on levels transacted in Europe.

With U.S. producers preparing for the imminent start of the hurricane season, large stocks of Group II base oils have been put into storage. Weather forecasters have warned that the season could be severe this year. One of the main base oil producers in the U.S. has completed a maintenance turnaround, so the supply base is running at full throttle.

New prices have been heard from one importer last week, with 100 neutral at €1,090/t, 220N at €1,120/t and 600N priced at 1,220/t, all on an FCA basis ex Antwerp-Rotterdam-Amsterdam.

The range of values in the Group II segment are adjusted to take account of recent changes with 100N and 150N assessed at €1,090/t-€1,135/t, ($1,170- $1,215), 220N at €1,120/t-€1,155/t ($1,200/t-$1,235/t), and 600N at €1,220/t-€1,265/t ($1,305/t-$1,355/t). These prices apply to a range of Group II oils from European, U.S., Red Sea and Asia-Pacific sources, all imported in bulk.

Previous Group III price hikes have not really worked as sellers are being pressured to adjust prices on an almost ongoing basis. Availability remains excellent from a buyer’s point of view, and there are no reported shortages due to replenishment cargoes taking extra time to arrive into Antwerp-Rotterdam-Amsterdam. Shipment delays may yet start to impact the market because a number of cargoes from the Middle East Gulf have yet to load.

Group III demand remains weak, but some blenders have revised forecasts for finished lubricant demand to predict an upswing, particularly for automotive engine oils. Such a development could boost requirements for Group III base stocks.

European prices for Group III oils with partial slates of finished lubricant approvals or no approvals are lower this week for 4 and 6 centiStoke grades at €1,460/t-€1,495/t, while 8 cSt is at €1,435/t-€1,455/t, all on an FCA basis ex Antwerp-Rotterdam-Amsterdam and Northwestern Europe. Some suppliers maintain lower numbers with FCA offers for 4 cSt at €1,260/t-€1,270/t.

Prices for rerefined Group III are also trimmed to €1,425/t-€1,455/t, on an FCA basis ex rerefinery in Germany.

Values for Group III oils with full slates of approvals remain stubbornly high compared to partly approved grades and 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. The sole seller of fully approved grades has acknowledged that its sales volumes may have slipped, but it maintains that margins have not. 

Baltic & Black Sea

It appears that no reported Russian cargo has yet loaded out of the northern Baltic for Apapa port in Lagos, Nigeria. Payment problems probably exist for the sellers of this potential cargo, with the situation so dire that traders are not willing to risk payments in naira, now that there are no dollars available even on the black markets where naira would have to be exchanged.

That exercise could potentially take months, which is plainly unacceptable. Any seller would have to maintain a presence or have representation in Lagos to achieve the conversion to dollars. This could completely eliminate margins on the cargo.

Another report from Lagos has suggested that Nigerian blenders are unhappy with Russian base oil quality, particularly on SN900, which would be blended using SN1200 rather than Western quality bright stock. The resulting SN900 would have a lower price but a higher color and lower viscosity index.

However, cargoes with Russian base oils are loading from the Baltic bound for India, and Singapore and are delivering into Gebze, Turkey, at a rate of around one 5,000 ton cargo every two months. Some 75,000 tons of Russian base oils have been imported into India this year – the most ever to that country. Prices are exceptionally low, and now India has become the largest destination for Russian base oil cargoes, taking in quantities similar to what Europe received before the invasion of Ukraine.

FOB prices for Russian SN150 and SN500 ex St Petersburg or Vyborg are said to have risen, although they are still at extremely low levels compared to mainstream European numbers. Working back from the last offered prices into Nigeria, and taking estimates on freight, prices could netback to $710/t-$735/t for SN150 and $740/t-$765/t for SN500. SN900 may be priced at around $795/t.

PK Orlen reports no availabilities of Group l base oils FOB Gdansk. Any availabilities from the refinery are being directed into local East European markets, where Group l is short due to a turnaround begun at Mol’s refinery in Szazhalombatta.

Sources in Turkey said two more lubricant companies have gone into liquidation, in addition to the three blenders reported last week. The economic situation shows no signs of uplift, and one source said they were unable to obtain European quality base oil, either because suppliers had no availability or offered prices were more than $350/t-$400/t higher than Russian barrels, which are available ex-tank on a load-over-load basis.

Russian Group l continue to flood the Turkish market. These base oils are priced around $825/t-$850/t for SN150 and $835/t-$865/t for SN500, on a CFR basis into Turkey. Even if there were availabilities, European barrels could never compete with these prices.

Tupras has re-issued prices for base oils from its Izmir refinery, but it is not clear if any or all grades are available. Spindle oil is at 34,326 lira per ton, SN150 at TL 29,745/t, SN500 at TL 31,829/t and bright stock at TL 43,036/t. Prices in Turkish lira are offered ex rack with a loading charge of TL 5,150/t added on.

Group II ex-tank values are maintained at levels which came into effect on June 1 – at €1,290/t-€1,345/t for 100N, 150N and 220N and at €1,475/t-€1,525/t for 600N. These grades were previously sold in dollars, but dollars are now unavailable, hence reversion to euros.

Group II base oils were previously imported from Red Sea, U.S., or South Korean sources but have been replaced by Russian Group II grades being offered at considerably lower prices. Cargoes and flexi-tanks from S. Korea are no longer available due to Red Sea problems.

Russian imports are also muscling in on Turkey’s Group III market. Four cSt oils from Tatneft’s refinery in Russia are being sold on an FCA basis at around €1460/t. Supplies in tank, imported previously from the United Arab Emirates, Bahrain and Asia-Pacific, had FCA prices of €1,625/t-€1,670/t, but these stocks are largely gone, and Red Sea problems are preventing replenishment. A vessel delivering either bulk or flexies in containers would have to sail into the Mediterranean and deviate to discharge in a Turkish port, making the delivery uneconomic.

Smaller quantities of fully-approved Group III grades from Cartagena, Spain – 800 tons to 1,800 tons – are being sold after delivery into Gemlik. Prices are unchanged at €1,960/t-€1,995/t, on an FCA basis.

Middle East

Red Sea reports suggest that the delayed S-Oil cargo of Group l grades for Northwestern Europe has been loaded on a northbound vessel and is en route to Antwerp-Rotterdam-Amsterdam. Voyage time should be around three weeks including the Suez transit. In the ports of Yanbu and Jeddah, Saudi Arabia, operations are badly affected by Houthi rebel actions in Yemen.

However, southbound vessels have been loaded in Yanbu and Jeddah with cargoes of base oils for receivers on the West Coast of India and the U.A.E. Again, this report has tried to check how these vessels are being chartered and are given safe passage by the Houthis. If anyone can throw any light on this subject, please email your correspondent with any information.

It looks as if Indian flagged vessels may be given safe passage, perhaps at the insistence of Iran, exerting pressure on their proxy.

In Israel Monday, Prime Minister Benjamin Netanyahu dissolved his war cabinet, spurring some hope that the end may be in sight for the conflict in Gaza, though it is too early to predict the outcome. All of the Middle East remains on high alert, but Iran remains exceptionally quiet, perhaps giving reason for hope at the end of a long and dark tunnel.

For Middle East Gulf blenders, problems getting hold of additives and base oils appear to be improving, with life entering to “a new normal.” Players in the U.A.E. have been nothing less than very resourceful when adapting to different sources for base oils and new supply chains put into place to work around shipping disruptions caused by the Houthi shipping attacks in the Red Sea’s Bab-al-Mandeb Strait. There are still obstacles to overcome, such as laying hands on containers, which are either in short supply or in the wrong location.

Shipping Group III cargoes from Bahrain, Qatar and Al Ruwais, U.A.E., is difficult because fewer vessels are available in the Gulf, and those that do become available are very expensive to charter given the extra voyage times and additional logistics involved.

Iranian base oil are prices higher after Iranol and Sepahan imposed markups across all Group l grades, so trade out of Iran has slowed. Export quantities are apparently moving out of Bandar Bushehr and Bandar Khomeini in southern Iran.

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

Russian base oil cargoes discharge into U.A.E. receivers with price indications heard from a U.A.E. source of $795/t for SN150 and $810/t for SN500, on a CFR basis. A number of 5,000-8,000 ton parcels have loaded out of Limas terminal in Turkey for receivers in Hamriyah.

This report is trying to establish the quantities of Russian base oils imported into the U.A.E. over the past few months. The damage at Lukoil’s Volgograd, Russia, refinery is not yet assessed, and there is no news as to how base oil production or storage will be affected. It is assumed that Limas terminal will continue to act as a bridging point for cargoes moving to U.A.E. and to India. Lukoil may reroute supplies of Group l base oils from its Perm refinery if Volgograd is out of action.

Netbacks for Middle East Gulf exports of Group III oils with partial slates of approvals are unchanged after distributor negotiations with producers Adnoc and Bapco. These netbacks are indicated at $1,425/t-$1,475/t for 4, 6 and 8 cSt.

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

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

Prices are unchanged for 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. Traders are looking at alternative supply sources in South Korea or Singapore to cover for problems with cargoes coming out of Yanbu and Jeddah. Singapore may be a long shot due to a major turnaround starting at a refinery there.

Selling levels are relatively high and are assessed at $1,685/t-$1,725/t for 100N, 150N and 220N and at $1,775/t-$1,825/t for 600N. The high ends of those ranges refer to RTW deliveries to buyers in remote locations in the U.A.E. and Oman.


Another large cargo will load from Rotterdam and Fawley, United Kingdom, after the refinery at the latter location completed a turnaround last month. The Rotterdam refinery also is now back after major maintenance. The timing of the cargo is not yet disclosed since it may depend on vessel and product availability, but the parcel of multi grades will sail before the end of August. It also has not been disclosed to agents in Durban, South Africa, whether this cargo will include material to be delivered to Mombasa, Kenya.

The Nigerian base oil market is essentially closed, with no planned cargoes or even offered prices, even for Russian material. This is principally due to the complexities of receiving payment for any cargoes in a timely and efficient manner. No contracts can be finalized with receivers regarding payments and whether these payments will be made in dollars or in naira, the latter causing real headaches given the expense of expediting on the local black market.

The problem now is that no banks or unofficial markets have any access to dollars. Government must step in to alter this dire situation, which is starting to cause blenders to run out of base oils for basic everyday operations.

Given the payment situation, traders have been visiting their receivers in Nigeria but are not actively seeking cargoes from sources in the U.S. or anywhere else for that matter. The market is in a precarious state and is in danger of receiving no imported base oils in the near future. With no other sources for base oils, this market could cease to exist.

The rainy season is starting and will last through September, slowing the movement of goods and services due to roads being flooded. One trader said they will not participate in the Nigerian market until the country gets its banking system back into some manageable shape.

The naira exchange rate is at 1,493 to the dollar, fluctuating so much daily as to make it impossible to gauge how many naira are required to exchange into dollars. This is not a problem at the moment, since there are no dollars.

A cargo was to be loaded out of either Alexandria or El Dekheila, Egypt, comprising 4,000-5,000 tons of bright stock and other grades from elsewhere. The bright stock was purchased from a refinery on the U.S. East Coast. The bright stock was to be blended with “other” base oils to make a large quantity of SN900. SN150 and SN500 would make up the balance of the cargo.

This parcel remains in tank and has not been loaded and is now some six weeks late. Payment issues may be the reason for the delay since the cargo was sold in a tender to Nigeria’s NNPC.

For the sake of good order and to keep the information flow moving, this column for now continues to show prices for CFR sales in Lagos’ Apapa port. Prices in for possible ”future” trades, other than Russian barrels, are indicated at around $1,110/t-$1,145/t for SN150, $1,175/t-$1,200/t for SN500 and $1,255/t-$1,235/t for SN900.

Russian offers had been much lower and were indicated at $930/t for SN150, $970/t for SN500 and $1,020/t for SN900.

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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