Weekly EMEA Base Oil Price Report

Simultaneously a large API Group I cargo will load out of Italy and proceed in an easterly direction for receivers in Singapore. This cargo is probably an inter-affiliate trade, with three Group I grades to supplement production from Jurong refinery in Singapore. The cargo will load from Augusta in Sicily, where a major retains drawing rights under the operation controlled by Sonatrach.

From Far East sources Group II and Group III availabilities appear to be the main axis for supplementary barrels moving to Europe and the U.S., but a rather oddball cargo may be on the cards for receivers in Nigeria, with around 10,000 tons of heavy Group II base oils loading out of a South Korean supplier.

From Far East sources Group II and Group III availabilities appear to be the main axis for supplementary barrels moving to Europe and U.S., but a rather oddball cargo may be on the cards for receivers in Nigeria, consisting of around 10,000 tons of heavy Group II base oils loading out of a South Korean supplier. This cargo is fascinating first insofar that primarily Group II base oils will again be entering the Nigerian market, and secondly, presumably at prices that will have to be competitive against Group I barrels recently loaded out of the U.S. Gulf for the same market.

Whether or not Group II base oils will command a premium over the Group I grades remains to be confirmed from sources in Nigeria. The cargo will load during the second half February and will sail directly to Apapa port in Lagos. What is not confirmed at this stage is the vessel and whether any of this parcel will proceed onward for the European market. Berth and draft restrictions at Apapa would suggest that this is a stand-alone cargo.

Meanwhile, Group I and Group II cargoes from points east and west are being aimed at receivers in India and the United Arab Emirates, with a number of vessels engaged in two-port discharging, accommodating receivers in both countries.

Demand in the Middle East Gulf appears to be extremely positive, with cargoes from the U.S. combining with Asia-Pacific arrivals. The mechanics of the region support large quantities of base oils being employed in the production of finished lubricants, which in turn are exported on the global stage, covering requirements in all continents. Products being exported include automotive and industrial lubricants along with specialty grades such as white oils and electrical oils, covering literally all types of lubrication.

Looking around the regions, Europe is still waiting for growth to kick in, and major markets are still seeing sluggish demand for lubricants and hence base oils, although there are areas of positive activity where premium base oils are making inroads to traditional blending operations. This scenario is forecast to continue for the foreseeable future.

Africa reports exponential growth in certain markets where development has pushed new technologies in agriculture, mining and infrastructure development in terms of communications and connectivity. Base oil markets are changing within the African continent, moving at pace toward modern development that spurs new lubrication demands.

Whilst Middle East regions are experiencing high demand for base oils and additives, there remains an undercurrent of uncertainty around negotiations between Iran and the U.S. Tensions and uncertainties constantly affect trade and commerce, causing cautious approaches to investment in new projects around the regions.

The positive news is that Saudi Aramco will upgrade its refinery complex at Yanbu, Saudi Arabia, adding a Group III base oil stream to the Luberef production. Trading in base oil supplies of Group I and Group II continues to grow, with large cargoes of both types of base oils being loaded during February for receivers in India, the UAE, Pakistan and Africa.

Crude and Gas Oil Prices

Moving behind the scenes, last week saw an easing of crude and petroleum product prices, with the International Energy Agency reporting that crude supplies are increasing as forecasted last year, and with demand remaining sluggish markets could face a glut of crude supply later in the year, which could in turn push prices to new recent lows.

News this week has Russian Urals crude being heavily discounted to existing customers in India and China, reportedly approaching $37.50 per barrel on a delivered basis into buyers in India. Additional sanctions are being prepared by Western nations that could affect refiners of Russian crude and the subsequent production of hydrocarbon derivatives that have been exported to the European Union and allied countries. The financial screws are tightening on Russia’s war machine, which relies heavily on crude oil sales to fund its war against Ukraine.

Looking specifically at base oils, Russian refineries previously exported large quantities of material to receivers in the Middle East, Asia and Africa, but these exports have recently been curbed and appear to have totally ceased at this time.

Any base oil being produced in Russia, appears to have been diverted to domestic markets, which are now wholly dependent on Russian refineries not been damaged by Ukrainian strikes. Pressure is building on the Kremlin to look after the local economy rather than generating revenue from sales of crude and petroleum products to outside markets.

Crude and gas oil prices
Dated deliveries of Brent crude: $68.50/bbl, April front month
West Texas Intermediate: $63.65/bbl, April front month
European low-sulfur gas oil: $677/t, March front month

Source: London ICE trading late Monday Feb. 16

Europe

Group I base oil activity around Europe has become a little labored, with buying interest subdued to the point of sellers contacting potential buyers with offers of available material. Buyers are aware that they can choose what and when to purchase, depending on finished lubricant demand for grades which can be blended using Group I base oils. Prices are now under pressure, and given the poor state of demand, weaker numbers are becoming more prevalent around the markets.

Sellers may eventually be tempted to look to export markets to move substantial quantities of Group I base stocks, but currently not many producers have sufficient quantities for such trade. If the decision to export is made, then prices would have to be reduced considerably and might cause pressure in local markets.

Group I prices are now weakening. Bright stock has been relatively tight over the past few months, but availabilities have improved and are now good for quantities of up to 1,000 tons.

Prices shown below for Eastern Europe will remain valid for up to the start of April as Mol is still drawing on purchases from the PKN Orlen plant in Gdansk, Poland, to fulfill its sales.

Group I

Exports from Europe, FOB (levels necessary to make such sales)
SN150: $625 per metric ton/t-$650/t
SN500: $675/t/t-$695/t
Bright stock 150: $1,055/t-$1,075/t

Northwestern Europe, FCA basis Antwerp-Rotterdam-Amsterdam
SN150 : $760/t/t-$785/t
SN500 : $825/t/t-$855/t
Bright stock 150: $1,200/t-$1,230/t

Eastern Europe,  FCA
Supplier A
SN150 : $995/t-$1,000/t
SN500 : $1,020/t-$1,070/t
Bright stock: $1,475/t

Supplier B
SN150: €680/t
SN500 : €770/t
Bright stock: €1,255/t

Mediterranean, FCA Spain
SN150: $815/t
SN600: $925/t
Bright stock: $1,310/t

Pan-European, FOB/FCA
SN150: €600/t-€645/t
SN500/600: €675/t-€710/t
Bright stock 150: €1,010/t-€1,035/t

Pan-European prices are assessed on an aggregate basis from prices obtained from Scandinavia, Poland, France, Germany, Benelux, Spain, Italy, Greece, the United Kingdom and Baltic States.

The euro exchange rate with the U.S. dollar was $1.18495 Monday.

European Group II base oil prices remain relatively stable on steady demand. Current levels seem acceptable to buyers – around $1,010/t for 150 neutral and $1,175/t for 600N. Sellers are not keen to enter into negotiations on prices following the adjustments instigated a few weeks back, and there seems to be little downward pressure being brought to bear from buyers. Similarly, there is little sign of pressure to push numbers higher, leading to an almost eerie air of acceptance between buyers and sellers.

The EU duty of 3.7% for Group II base stocks imported from nations without fair trade agreements with the bloc was to be eliminated in January, but given threats of U.S. tariffs the levy is still in place and may remain so until mid-2026.

A number of Asia-Pacific Group II producers may be targeting the European market with surplus product that may be difficult to place in local markets. Group II prices in Europe remain higher than in other regions, so there is every incentive for spot sales, and the market could become very competitive in coming months. Parcels from Taiwan and South Korea are reportedly being loaded now for shipment to Europe.

Group II, FCA basis
110N: €825/t-€860pmt
150N: €825/t-€865/t
220N: €820/t-€850/t
600N: €890/t-€960/t

Prices refer to a wide range of Group II base oils which may be sourced from within Europe, the U.S., the Red Sea and Asia-Pacific.

A Group III base oil cargo that loaded from Sitra, Bahrain, during January will arrive into Rotterdam imminently. Another cargo is loading around now out of Al Ruwais, UAE, for the distributor in Europe. The cargo will sail around the southern tip of Africa and should arrive into Dordrecht, Netherlands, around the end of March or early April. Another cargo already arrived from Al Ruwais some weeks back, and regular shipments are now programmed to lift product around every six to eight weeks.

When Group III base oils start arriving from new production in the U.S. and Red Sea, the European market will be optimally supplied with these grades.

European Group III prices are unchanged this week, both for grades with full slates of finished lubricant approvals and for those with partial slates or no approvals.

Group III

Partly approved grades, FCA Antwerp-Rotterdam-Amsterdam and Northwestern Europe
4 cSt: €1,195/t-€1,225/t
6 cSt : €1,185/t-€1,210/t
8 cSt: €1,165/t-€1,190/t

Fully approved, FCA Antwerp-Rotterdam-Amsterdam, Northwestern Europe, Spain
4 cSt: €1,595/t-€1,620/t
6 cSt: €1,585/t-€1,610/t
8 cSt: €1,565/t-€1,590/t

All the above products sold on a delivered basis will be subject to transportation charges, added to the prices above.

Rerefined, FCA Germany
4 cSt:  €1,030/t
5 cSt: €1,020/t
6 cSt: €1,075/t

Baltic Sea

No Russian base oils appear to be leaving from Baltic supply points in St. Petersburg or Vyborg, Russia, as available barrels of base oil are being channeled to the domestic markets. With financial sanctions hitting Lukoil and Rosneft and continuing Ukrainian drone strikes on a number of refineries, including one operated by Bashneft at Ufa, there are no signs of base oils leaving Russia.

Lukoil and Rosneft are busy disposing of foreign assets. From gas stations to storage terminals, all foreign assets must be sold according to new sanctions on the companies. This may explain the mothballing of the Limas terminal in Turkey, which was being utilized by Lukoil to bridge cargoes to receivers in the UAE and India.

It was reported in another base oil report that a large Russian base oil cargo had been delivered into Indian receivers, but no records or shipping details have been found to corroborate this event. It would seem strange for Indian buyers to accept Russian Group I base oils at this stage given the surplus of Group I grades being produced within India and being offered to buyers in the UAE and other Gulf Cooperation Council locations. The report is taken as unconfirmed and dubious.

Export destinations such as Turkey, the UAE and Nigeria have not received any offers from traders who specialize in Russian barrels.

Notional export prices are still reported here for the sake of good order.

Group I, FOB St. Petersburg, Vyborg (notional)
SN150: $610/t-$640/t
SN500: $650/t-$675/t

Black Sea & Turkey

Once again during last week Turkish traders and blenders who were approached reconfirmed that no Russian base oils have been landed in Turkey for the past few months. From comments received, it looks like it would take some time to restart base oils supplies into Turkish buyers, due to storage facilities being reallocated, and alternative arrangements put in place for supplies of Group I base oils.

Turkish blenders have turned to purchasing Group I base stocks from Sonatrach out of Augusta, Sicily, and from AMOC and APC in Alexandria. There have been requests for ExxonMobil to offer cargo lots to bolster Group I supplies, but prices are deemed too high according to traders. Motor Oil Hellas have also been approached, but after two 5,000-ton cargoes of heavy neutrals going to India, the Greeks have little or nothing to offer right now. These two cargoes by-passed the Bab-al Mandeb Strait in the Red Sea without any apparent problems from Houthi rebels in Yemen.

Additional cargoes of Group II may be forthcoming into Turkey from Taiwan.

Group I
Tupras, ex rack Izmir refinery
Spindle oil: Tl 31,224.00/t plus, VAT Tl 8,274.60/t
SN150: Tl 28,185.00/t plus, VAT Tl 7,666.30/t
SN500: Tl 34,864.00/t plus, VAT Tl 9,002.10/t
Bright stock: Tl 50,823.00/t, plus VAT Tl 12,163.40/t

Sales also incur the standard loading surcharge of Tl 10,146.50/t

Group II, ex works offered through Turkish traders
110N and 220N: no availabilities
350N: no offers, assuming no avails
150N, ex Taiwan or Saudi Arabia: $995/t
500N/600N, ex Taiwan or Saudi Arabia: $1,195/t

Group III

Partly approved
Tatneft 4 centiStoke FCA: €933/t ( last known price, currently no avails. )

Fully-approved from Cartagena, Spain, CIF Gemlik
€1,655/t-€1,680/t.

Middle East

The price for SN500 out of Yanbu did fall by $5/t during early days of February. This is now confirmed.

Large cargoes of around 18,000 tons-20,000 tons of Group I and Group II base oils are being loaded for receivers in India and the UAE. Cargoes mainly of Group II base oils are going into Chennai and Mumbai anchorage, whilst others are being split between Mumbai anchorage and UAE ports such as Fujairah and Hamriyah.

Smaller cargoes are also being organized out of Yanbu and Jeddah, with receivers in Aqaba, Jordan, Durban, South Africa, and Alexandria taking delivery of various quantities of Group I base oils from both Yanbu and the other Luberef refinery in Jeddah, Saudi Arabia, according to shipbrokers’ reports.

News gathered last week suggested that the Yanbu development for Group III production was some way off in time, but confirmation was received during the past few days that initial production will be in place around the end of 2026. The refinery will have a major maintenance turnaround during late summer to undertake work involved in the start-up of Group III production.

Ramadan began Feb. 17 and will continue until about March 19 or 20. Following Ramadan will be the Eid-al-Fatr holiday. There may be a slowing down in activity during the Holy Month, but operations will continue as normally as possible.

With the approach of Ramadan, receivers in the UAE were trying to purchase cargoes of Group I and Group II base oils in case of conflict between Iran and the U.S. Cargoes are arranged to cover against any problems with supplies, but progress will slow during Ramadan, and it is considered that negotiations between Iran and the U.S. my drag out until the end of Ramadan.

It was reported during last week that Iranian FOB prices for premium SN500 were decreased by $5/t, but no cargoes have been identified coming out of Bandar-e Emam Khomeyni, according to shipping reports.

In the UAE there is a reported shortage of 20- and 40-foot equivalent shipping containers for finished lubricants destined for export markets such as East and South Africa. Fewer vessels are calling at UAE container ports such as Fujairah and Jebel Ali. Liner vessels such as APL still call at Fujairah but will no longer enter the Gulf. Feeder vessels will be used to move freight containers into and out of ports in Middle East Gulf.

UAE-bound cargoes continue to arrive from the U.S., South Korea, Thailand and Indonesia, discharging in Fujairah, Hamriyah and Jebel Ali. Base oil prices in the UAE are unchanged from last week except for Group III grades, which fell slightly.

Group I, CIF/CFR UAE ports
SN150: $890/t-$925/t
SN500: $955/t-$980/t
BS 150: $1,245/t-$1,275/t

Group I cargoes are supplied to receivers in the UAE by traders based in the U.S., but also through companies based in Switzerland. Some direct sales are initiated through Luberef in Yanbu and with a number of suppliers and traders in Thailand.

Group II, FCA or RTW UAE and Oman
110N, 150N and 220N: $1,275/t-$1,325/t
600N: $1,385/t-$1,420/t

Group II base oils imported into the UAE and other Middle East Gulf ports in Qatar, Bahrain and Kuwait are supplied from a number of  sources, Red Sea, U.S., South Korea, Singapore and Europe. Cargoes are discharged into storage in the UAE, and then smaller parcels are transhipped to various ports around the Gulf. High ends of the ranges refer to material being delivered by RTW in the UAE and into the Omani exclave north of Khorfakkan and Fujairah.

Group III, FCA Hamriyah or Sharjah, or RTW UAE and Oman
4 cSt: $1,225/t
6 cSt: $1,235/t
8 cSt: $1,255/t

Middle East Gulf Group III base oils produced in Al Ruwais and Sitra are delivered in smaller parcels of around 3-4,000 tons by local Middle East Gulf vessels going into Hamriyah and Jebel Ali, UAE. Prices for Group III prices above include a revised reseller’s margin of around $105/t to cover storage, handling, insurance and a margin. RTW deliveries from distributors can incur a further charge of between $20/t/t-$65/t, depending on delivery location and quantity.

Large Group III cargoes are reported loading out of Al Ruwais for distributors in the U.S. A vessel loaded around 12,000 tons of three Group III base oil grades and recently sailed for U.S. Gulf Coast. Netbacks for Group III base oils ex Sitra and Al Ruwais for distributor sales into Europe, U.S., India, China and Thailand, are maintained at $1,075/t-$1,095/t for 4, 6 and 8 cSt Group III grades. Netbacks for gas-to-liquid Group III+ base oils ex Ras Laffan, Qatar, remain at $1,125/t-$1,165/t. Levels are indications only since no distributors or third parties are involved in these cargoes, which are mainly retained by Shell affiliates for in-house blending.

Middle East Gulf Group III netbacks are assessed using selling prices in known markets, less estimated marketing costs, margins, handling, storage and freight.

Africa

Turkish buyers are looking for Egyptian and Algerian supplies of Group I base oils as the busy time of year starts in the Turkish market. Blenders in Turkey have commitments to distributors for supplies of finished lubricants in Syria, Lebanon and around the Black Sea regions such as Georgia.

Turkish finished lubricants are also supplied back into countries such as Egypt and Libya.

The Moroccan requirement still seems to remain uncovered.

Another large base oil cargo will load out of Rotterdam and Fawley, U.K., for Durban, this cargo will possibly load during March, with an estimated arrival around the end of April.

This report continues to attempt to contact receivers in Guinea, Cote d’Ivoire and Ghana, to try to establish a major’s selling price levels but so far this has not been successful. It is anticipated that delivered prices into those countries will be substantially higher than those for Group I base oils going into Nigeria.

Nigerian cargoes of Group I base oil continue to be nominated from suppliers along the U.S. Gulf and East coasts, but an unusual cargo has been spotted being sourced from an Asia-Pacific supplier, with around 10,000 tons of Group II 600N being sought for shipment into Lagos. The voyage will be long, and if payment is effected up front or by letter of credit, then credit will play a major part in this transaction. Freight will be high for this quantity, hence the cargo will have to be sold into receivers at a premium to Group I base oils coming in from the U.S. Gulf Coast.

Prices have been suggested and are seen to be extremely low for Group II base oils. It is not fully understood as yet why a trader would want to offer Group II base oils into Nigeria, presumably at prices that will have to compete with Group I levels currently being offered by the same trader.

A vessel has not been fixed as yet, but shipbroker reports will be checked this week to try to identify the ship concerned.

Also it is not known if this parcel will be a partial cargo on a vessel carrying other material to Europe. More information is being collected.

Another trader is loading around 18,000 ton cargo out of the U.S. Gulf Coast in February, with the trader mentioned above taking 10,000 tons around the same time. 

Bids to European suppliers are being met with no offers from suppliers, who may be in the market to offer FOB prices at levels enabling export cargoes to be purchased. Prices requested by receivers in Lagos still reflect the last Russian material to arrive in Apapa, which is now many months ago. It will be impossible to offer at the levels requested, on the basis that that Group I FOB prices remain where they are today.

Bid levels are still heard at $800/t for SN150, $870/t for SN500 and $990/t for SN900. These numbers are incredibly low, and if freight, margin and other expenses are added, these levels establish FOB levels at around $630/t, $700/t and $820/t, respectively.

The black market exchange rate for the Nigerian naira was NGN 1,425 to the dollar Monday.

Group I
U.S. origin, CFR Apapa
SN150: $800/t
SN500: $870/t
SN900: $990/t

The above prices are the lowest heard in the market and may not be achievable for all cargoes arriving into Apapa. It is to be considered that reasonable selling levels could be at least $50/t-$75/t higher.

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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