The ceasefire between the United States and Iran was holding tenuously this week after the U.S. began providing information for commercial ships to pass through the Strait of Hormuz.
Iran fired at and harassed ships including American naval vessels — which President Donal Trump’s administration denied, apparently so it could avoid resuming attacks against land-based assets in Iran. U.S. officials did say its Operation Freedom destroyed Iranian boats involved in the aggression.
The operation is Washington’s attempt to reopen the strait in spite of Iranian claims that all vessels transiting the waterway can only do with permission from the Islamic Revolutionary Guard Corps. A number of ships moving under flags friendly to Iran have been traced moving through Hormuz, and what is happening was not yet clear.
Had Iran succeeded in striking U.S. naval vessels, the U.S. probably would have immediately attacked Iranian targets, constituting a sobering escalation of the conflict. The above background does not bode well for the base oil and lubricants industry — especially lube blenders in countries bordering the Middle East Gulf, which have mostly been cut off from base oils, chemical additives and packaging supplies since the war started.
In many cases the above has resulted in operations closing down or working with small quantities of base oil which have been transported into the region by road. Some additives have been air freighted into the region at vast expense to meet local demand for finished lubes, which have been prioritized for defense units in the United Arab Emirates, Bahrain, Kuwait and Qatar.
Commercial activity has become severely restricted since consumer goods are likewise prevented from reaching the region. Food and medicines are running short, and the region is experiencing real hard times right now.
Some container traffic is being unloaded in ports such as Muscat, Oman, and Fujairah, UAE — both outside the strait — but these are mere token amounts, meeting only basic needs compared with normal supplies of imported goods.
Distribution of basic materials has been delegated to the relevant military in Gulf states, with requisitions being imposed on distributors and sellers of essential products around the region.
Exports of API Group III base oils from the gulf have been halted for two possible reasons. First, the blockade of Hormuz made transportation impossible. Second, all three of the region’s Group III plants were attacked by Iran. At least one and possibly two suffered damage that needs to be repaired.
The Adnoc plant in Abu Dhabi, UAE, appears to have not been damaged, but limitations to shipping and obtaining vessels to charter are going to be problematic even following the opening of Hormuz. Some sources have indicated that they expect supply problems from Adnoc for at least the rest of this year, at best. This will affect supply chains moving into Europe and the U.S., where Middle East Group III is a significant portion of consumption. Additional barrels from Asia-Pacific will not be sufficient to cover the missing supplies from Middle East Gulf sources.
Some enterprising blending operations in Europe are looking to use polyalphaolefins as alternatives to be able to produce 0W and 5W automotive lubricants, but PAOs are scarce and where available are now commanding prices often in excess of $4,000 per metric ton, making their use uneconomic in most cases.
All base oil prices have surged as a result of the Iranian war, with Group I becoming extremely tight and in short supply throughout Europe and parts of Africa. Group II production within Europe has been cut back to optimize distillate output, putting a strain on availably of these grades. Major Group II suppliers have issued notices of seven price increases since the war started Feb. 28.
Those Group II hikes have not been minor, usually ranging between $150/t and $250/t. The sum result is values never witnessed previously, and blenders have had to raise their own prices for finished products. Some question, however, whether base oil prices are moving towards levels that would be impossible to absorb.
Crude oil and feedstocks are having an extremely volatile ride, with items of news from either Trump or Iran alternately spooking or calming the markets. Last week saw crude numbers for dated deliveries of Brent approaching $120 per barrel, thereafter falling back below $110/bbl, with the crack between dated Brent and West Texas Intermediate at one point as high as $12/bbl.
Markets are concerned about supplies of jet fuel, particularly around Europe, which is net short of all distillates and imports large quantities of kerosene and gas oil from Middle East Gulf sources. In addition, some refiners are becoming concerned regarding crude stocks; if those reach depletion it could shorten distillate production to a greater extent.
Most refiners have reduced base oil production in favor of optimizing distillate output, and this has had the effect of tightening the supply scene for Group I and Group II base oils in Europe and elsewhere, on top of the disruption of Middle East Gulf Group III supply.
Crude and Gas Oil Prices
The news from last week that the UAE was leaving OPEC surprised many around the world, but representatives in Abu Dhabi said that this move had been on the cards for some time. Pressure will now build on members such as Saudi Arabia and Kuwait to maintain OPEC as a force for controlling crude prices.
Markets are searching for any signs of positive news coming out of the Middle East Gulf war, with Asia-Pacific being greatly affected by the lack of crude supplies moving out of the gulf. For example, China is reliant on vast quantities of crude from Middle East Gulf sources, and even maximizing the intake of Russian supplies, the Chinese economy is stuttering and slowing. This may indirectly suit Donald Trump, but the prospect of global recession is potentially disastrous for many countries.
The effects of such an outcome would be calamitous for Asia-Pacific and also Western markets, so much hinges on a relatively rapid outcome to the Iranian war and the reopening of the Strait of Hormuz.
Prices for oil remain extremely volatile and are responding to pieces of news emerging from U.S. and Iran.
Dated deliveries of Brent: $113.70/bbl, July front month
West Texas Intermediate: $105.35/bbl, June front month
European low-sulfur gas oil: $1323/t, May front month
Source: London ICE late pm, Monday 4th May 2026.
Europe
Group I base oil in Europe has moved even tighter, with refiners cutting base oil output whilst optimizing distillate output. Base oil prices continue to face upward pressure, and many blenders are scrambling around the market searching for any availabilities. Many buyers who had been reliant on a limited number of suppliers for Group I supplies have been disappointed by the limiting of supplies from sources, but many sellers have acknowledged that they do not have sufficient barrels to cover total demand at this time of year.
Some buyers are trying to establish new relationships with rerefiners, which recently have been getting second looks in European markets. New supplies are being set up from Red Sea and Greek rerefiners, who are moving into relatively distant destinations to supply buyers in Northwestern Europe and the United Kingdom, for example.
Group I base oil prices distanced themselves from any correlation to gas oil prices, with numbers escalating on almost a daily basis, purely reflecting high demand and scant availability. A rather strange conundrum is evolving in some parts of the market with a number of blenders shying away from hiking prices on their own finished lubes to pass on increasing raw material and operating costs. Some have been reticent out of concern for protecting market share. But costs are running up so much that they could soon threaten viability of some businesses if relief is not found on the revenue side.
There are no possibilities for export sales at this time, with all available European barrels of Group I base oils being taken by buyers looking to protect their operations.
Erratic supply chains continue, but some wholesale buyers of finished lubricants have announced that they cannot access quantities of material to cover demand.
Group I
European exports, FOB
Prices not quoted
Northwestern Europe, FCA Antwerp-Rotterdam-Amsterdam
SN150: $2,025/t-$2,095/t
SN500: $2,250/t-$2,365/t
Bright stock 150: $2,450/t-$2,600/t
Eastern Europe, FCA
No prices available from PK Orlen or Mol
Mediterranean prices, FCA Spain
SN150: $2,055/t
SN600/500: $2,250/t
Bright stock: $2,650/t
Pan-European, FOB/FCA
SN150: €1,895/t-€1,975/t
SN500/600: €1,995/t-€2,100/t
Bright stock 150: €2,365/t-€2,485/t
Pan-European prices are assessed on an aggregate basis from values in Scandinavia, Poland, France, Germany, Benelux, Spain, Italy, Greece, the U.K. and Baltic States.
The euro’s exchange rate with the U.S. dollar was $1.16955 Monday.
Having previously considered that European Group II base oil prices might have reached a plateau, this idea is withdrawn following yet another round of increases imposed by major suppliers around the European market. Last week saw majors announcing further large increases with $250/t be applied to light grades, whilst the heavier 600N had levels of $150/t added to already sky-high levels.
Many buyers believed that the price spike would be short lived, but this belief has been shaken by the announcements that it could take months before supply chains can revert to pre-war normality, and now, with buyers taking a more pragmatic outlook, finished lubricant prices are seeing major increases in price.
Availability of Group II base stocks was previously declared adequate, but buyers are reporting wobbles appearing as some sellers limit quantities available. There is word of allocations being brought introduced to protect regular buyers.
Price levels are once again very much subject to change. Levels are increased to reflect the latest round of increases advised to the market last week. Prices are now assessed at around €2,050/t-€2,175/t in respect of the 100N and 150N grades, with 600N between €2,255/t-€2,320/t.
Group II, FCA basis
110N: €2,050/t-€2,100/t
150N: €2,085- €2,175/t
220N: €2,025/t-€2,070/t
600N: €2,255/t-€2,320/t
These values apply to a wide range of Group II base oils that may be sourced from within Europe or imported from the U.S., the Red Sea and Asia-Pacific.
Many Group III buyers are looking to additive suppliers for formulas allowing them to replace Group III oils if they become unavailable. Middle East Gulf supplies appear to have been dealt major blows due to fire and water damage to source plants in Ras Laffan, Qatar, and Sitra, Bahrain – plants damaged by . These units will to be producing base oils for some time to come, the exact extent of damage is still not assessed and may take some months before expert evaluations can be made of the destruction to systems and storage.
From sources local to United Arab Emirates, and from one distributor, even if damage to the Adnoc refinery in Al Ruwais is slight, the plant may not be able to ship base oils for quite a while due to anticipated difficulties finding vessels and arranging cargoes after Hormuz reopens.
Europe is expected to use up existing inventories of Middle East Gulf Group III in around four weeks. Some blending operations are looking at using PAOs to replace Group III and Group III+ base stocks, but PAOs are not prolific in the market, and due to demand for these products, prices have leapt and one reported offer last week was quoted at $4,170/t.
The SK Enmove-Repsol joint venture Group III plant in Cartagena, Spain, reports that it will delay a planned maintenance shutdown, perhaps due to the potential supply situation in Europe. Group III sources in South Korea also have turnarounds scheduled, and these could exacerbate the supply shortage depending on timing.
Prices for Group III oils with partial slates of finished lubricant approvals rose again from May 1, but distributors had advised that since May will be the final month of supplies, they will price accordingly and will respond to demand for the material currently in tank.
Storage contracts may have to be cancelled, and this will be an expensive and costly exercise, but it could still be the most practical course given how long it may take before shipments from Middle East Gulf sources resume.
Producers of rerefined Group III oils raised prices again but are holding back from offering extra quantities of these grades. Buyers are receiving allocated quantities based on historical purchases.
Group III
Partly approved, FCA Antwerp-Rotterdam-Amsterdam, Northwestern Europe, Spain
4 cSt: €2,260/t-€2,325/t
6 cSt : €2,275/t-€2,335/t
8 cSt: €2,225/t-€2,295/t
Fully approved, FCA Northwestern Europe
4 cSt: €2,480/t-€2,525/t
6 cSt: €2,490/t-€2,545/t
8 cSt: €2,525/t-€2,580/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: €2,025/t
5 cSt: €2,040 /t
6 cSt: €2,055/t
Baltic Sea
Russian domestic base oil prices are being reported as rising again during the past week, but selling prices in rubles are not published.
There are no reports of Russian bulk cargoes leaving Baltic ports, although with so-called shadow fleet vessels being used for other products, base oils could be moving without detection. There are suggestions that Russian export barrels are being exported in flexes in containers, but quantities are vague, and it is also unclear what the destinations would be.
Some commentators have said that quantities could be going into African receivers, but this possibility is difficult to assess, without detailed shipping information, which is certainly not available from any reliable source.
Black Sea & Turkey
Turkish buyers are scouring the European market for any chances to purchase European quality Group I base oils, but the possibilities are few, with the Greeks turning down the “offer” to supply a cargo into Gebze or Derince, Turkey.
Russian barrels remain missing from the base oil supply scene in Turkey, with some players offering material that could be of either Uzbek or Iranian origin. The quality is nothing special and could only be used with considerable quantities of viscosity index improvers.
Turkish blenders have purchased Group I base stocks from AMOC and APC in Alexandria, along with quantities of base oils from Luberef ex Yanbu, which has sent Group I and Group II into Gebze.
Domestic prices for Group I oils from the Tupras refinery in Izmir rose again the past week.
Group I, ex rack Izmir
Spindle oil: Tl 82,410.00/t plus, VAT Tl 18,511.30/t
SN150: Tl 78.933.00/t plus, VAT Tl 17,815.90/t
SN500: Tl 80,668.00/t plus, VAT Tl 18,162.90/t
Bright stock: Tl 99,318.00/t, plus VAT Tl 21,892.90/t
Sales incur a standard loading charge of Tl 10,146.50/t, which remains unchanged and should be added to the prices above.
Traders in Turkey have advised that no sale offers will be issued relating to material recently arrived from Taiwan. Traders are holding on to stocks, but prices heard ex tank have been elevated to new European levels for Group II, with the traders involved netting a margin of around €1,250/t-€1,500/t.
Due to volatility of prices, the local trader will not offer any availabilities for export.
Group II, ex-works
110N and 220N: no offer
350N: no offer
150N: unavailable
500N/600N, ex Taiwan: no offers
Group III, FCA
Partly approved
Tatneft 4 cSt: no availabilities
Fully approved, CIF Gemlik
From Cartagena, Spain: €2,625/t-€2,670/t
The latter is supplied by Repsol in cargoes ranging from 800-1,200 tons.
Middle East
Luberef is looking to the European market for cargoes of Group I and Group II base oils out of Yanbu. It is unclear as yet which company will be controlling this business, since previous cargoes of Group I base oil that were delivered into Antwerp-Rotterdam-Amsterdam were loaded under the auspices of S-Oil, but cargoes of Group II were delivered by Luberef.
As part of the Saudi Aramco group, it may make more sense for S-Oil to organize this operation, with operational capability in the European market, having been supplying Group II cargoes into Europe for around 30 years.
Cargoes have loaded for Indian receivers in Mumbai and Chennai, but also for buyers in Fujairah, where some of the material may be loaded into trucks and bridged across to blending plants in Sharjah and Dubai to bolster stocks while Hormuz is closed.
A number of buyers in the UAE are looking at the possibility to truck quantities of Group II base oils across Saudi Arabia and into the UAE to continue blending operations, albeit on a low key basis, but keeping staff, plant and machinery working.
UAE blenders continue to operate as best as possible with some companies on a part-time basis. A few have closed down until supplies of base oils and additives arrive into ports such as Jebel Ali and Hamriyah, although most have maintained a skeleton staff to keep premises and storage tanks up to standard.
Companies have been trying to arrange to access base oils from storage in Fujairah or Muscat in Oman. Base oils would be loaded in trucks with the vehicles then driven across to Sharjah and Jebel Ali. Storage is at a premium in Fujairah, and the blending operations based in that location have been supplying finished lubricants to UAE markets, maintaining a supply of lubes for continuous operations.
With Luberef delivering into Fujairah bridging supplies of Group I and Group II base oils is a feasible option to keep operations ticking over, but these supplies are in no way a substitute for a number of cargoes that are waiting offshore outside the Gulf.
Some vessels have now been at anchor for almost 10 weeks and may have even longer to wait if they are to discharge cargoes into Middle East Gulf ports. Crews remain onboard, but launches have been used to rotate people, maintaining crew numbers for safety and security. Water, victuals and fuel have been delivered to vessels waiting at anchorage by ships’ agents who have played a pivotal role in the waiting game.
Talking to agents in the UAE, it would appear that there are around 14 cargoes of base oils “swinging at the hook” awaiting to discharge in ports such as Hamriyah and Jebel Ali. Cargoes are from South Korea, U.S. Gulf Coast, Thailand and Singapore. Most of the vessels arrived just as the war commenced and have been advised by owners to await orders for discharge. Some vessels were diverted to alternative ports such as Mumbai and Karachi, where cargoes were sold to new receivers.
A speciality oils producer blending transformer oils and white oils, has suspended operations due to having no base oils, additives or packaging for finished lubricants.
Receivers in the UAE will continue to have discharge and berthing problems when Hormuz reopens, since there will be major congestion in UAE ports. Ships’ agents in Sharjah have commented that it may take weeks or even months following the opening of Hormuz before all cargoes can be discharged. Owners are in constant contact with masters and crew regarding options and insurance coverage for any attempted transit of Hormuz.
Base oil prices in the UAE have risen, but with little product left in storage FCA sales are few.
Latest prices are shown below since these were confirmed during last week, but there are doubts regarding the availability of some base oils.
Group I, CIF/CFR UAE ports,
SN150: $1,965/t-$1,995/t
SN500: $2,150/t-$2,185/t
BS 150: $2,400/t-$2,475/t
Group II base oils are basis FCA or on an RTW delivered basis UAE and Oman. Supplies of Group II in storage are all depleted, and prices have been suspended until new cargoes are discharged. There are small quantities arriving by truck from Fujairah, but these quantities are not being resold, rather they are utilized by blenders who have organized a very expensive and costly project.
Group II, FCA UAE or RTW UAE and Oman
110N, 150N and 220N: Prices suspended
600N: Price suspended
Group II base oils were/will be imported into the UAE and other Middle East Gulf ports in Qatar, Bahrain and Kuwait and were supplied from a number of sources from the Red Sea, the U.S., South Korea, Singapore and Europe. Cargoes were discharged into storage in the UAE, then smaller parcels were transshipped to ports around Middle East Gulf or delivered by RTW.
There are no new updates or reports from either Ras Laffan or Sitra. The base oil plant at the Adnoc refineries at Al Ruwais has not experienced damage, and Group III base oils could be produced, but what to do with the quantities of Group III grades is another problem, since they cannot be loaded from storage due to no vessels and no transit through Hormuz.
Group III base oils, FCA Hamriyah/Sharjah port, or delivered by RTW in the UAE and Oman, are no longer available due to the shutdown at Sitra, and it would appear that no product is coming out of Al Ruwais.
The distributor in the UAE has temporarily ceased selling product and will only restart as and when material is forthcoming from Adnoc. With the news that Adnoc base oil plant is unaffected by the Iranian strikes, supplies from this source may be reinstated sooner than imagined earlier.
UAE Group III prices are suspended for the moment, as are netbacks for Group III base oils exports ex Al Ruwais, Sitra and Ras Laffan.
Africa
The Moroccan requirement was covered by a cargo of Group I base oils that loaded out of the U.S. and has arrived in Mohamedia, comprising of three grades, SN150, SN500 and bright stock. The cargo is thought to have been around 5,000 tons in total.
The bright stock cargo mentioned previously discharged in Alexandria for EGPC, under the supply contract held by Luberef in Yanbu.
A large cargo of Group I and Group II base oils loaded out of the U.S. Gulf of Mexico coast for discharge in Durban, South Africa. The cargo will be discharged in Durban restocking inventory for representatives of a U.S. major, and the cargo is believed to have arrived a couple of weeks back and has completed discharging.
A European major has loaded a 10,000-ton Group I cargo comprising three grades of base oils out of Fawley, U.K., for receivers in Conakry, Guinea; Abidjan, Cote d’Ivoire; and Tema, Ghana. The cargo is underway, and will probably arrive into the first port which will be Tema in a few days time. With 5,000 tons going into Tema, the remainder of the cargo will be split between the other two ports. SN150, SN500 and bright stock will be delivered in each port.
No more cargoes are expected to arrive into Nigeria for some time, but receivers in Lagos will have to procure their next shipment at prices three times higher than the most recent arrivals, all of which were consigned prior to the Iran war.
Traders say the Nigerian market is not interesting right now, and more attention will be paid to realistic business, where receivers are prepared to face up to paying market rates for base oils. Nigerian buyers would be facing having to pay around $3,000+/t for quantities of SN900 delivered into Apapa. Resellers will merely walk away from base oils until prices return to levels considered to be competitive.
Nigerian resellers have increased prices locally as much as possible in line with other international numbers that have been advised using weekly base oil reports.
All recent arrivals had been fixed and contracts issued before the Iran war, therefore resellers in Lagos will be making considerable margins on new sales, where they can.
The exchange rate for the Nigerian naira was NGN 1,376 to the dollar Monday.
CFR prices in Apapa remain valid since no new offers have been made or received since the start of the war in Iran. All cargoes recently arrived into Apapa, were sold at prices valid prior to the Iranian war. Levels will be reflected around the following numbers.
Group I, CFR
SN150: $885/t
SN500: $925/t
SN900: $1,035/t
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.
Historic and current base oil pricing data are available for purchase in Excel format.