The Middle East situation becomes less clear by the day, with claims and counter claims from U.S. and Iran during the negotiations which appear to be ongoing as this report is being written.
U.S. latest is that the Strait of Hormuz will be reopened with no tolls or payments being made by merchant vessels transiting the channel. Simultaneously, Iran edicts are that fees will be required on a ‘voluntary basis’ for all vessels moving through the strait, and that Oman and Iran between them, will have responsibility for vessel movements and for the collection of these tolls.
Iran has targeted strikes against U.S. bases dotted around the Gulf, whilst U.S. military has attacked Iranian positions around Hormuz, perhaps in retaliation for an Iranian strike on a merchant ship going through the strait.
The latest is that Trump has announced that a meeting between the two warring factions will be held in Qatar on Tuesday 30th June, but Iran has denied this arrangement.
Trump’s announcement on Monday came less than two hours after a top Iranian official said that technical talks over the memorandum of understanding between Washington and Tehran “are not planned” for this week. The Iranian Deputy Foreign Minister said the meeting would only take place after conditions are met, without providing further details.
In the ‘alternative’ conflict, Ukraine is piling pressure on Putin by targeting Moscow, where a refinery has been hit and set on fire, causing damages which will impede the production of petroleum products which would normally be used locally by Muscovites.
Supplies of gasoline and diesel are being severely interrupted bringing the effects of the war ever closer to Russian centres of population in cities such as St Petersburg and Moscow. The Kremlin has strongly denied that there are problems growing for Putin, but the evidence is plain for people to see on their doorsteps.
Ukraine has also targeted Crimea with drone attacks on Sevastopol, home of the Black Sea fleet, and the Kerch Bridge connecting the peninsula with the mainland. Tourism has been halted with many people trying to leave the region by air and sea.
Putin may yet come to the negotiating table seeking some sort of peace deal, which will be contrived to appear as a victory for Russia following its ‘Special Operation’ in Ukraine which started more than four years ago.
The latest outcomes from the two conflicts has done little to stabilise base oil prices although there are signs that Group I and Group II prices are calmer and in some instance have been seen to have dropped down from the giddy heights attained during the last three months.
Availability of Group I and Group II base oils across the European, Middle Eastern and African regions is described as more than adequate, with only definitive areas such as Middle East Gulf and Russian reporting shortages of base oils and additives leading to shortages of finished lubricants for local markets in those regions.
Group III remains a very different story, with global shortfalls being reported , but with serious problems in European markets where supplies from Middle East Gulf sources have all but been exhausted, causing customers of the distributors for thee grades to search the market for alternative supply options.
Prices for any available barrels remain sky-high, with bids being made for spot availabilities at prices in excess of $3500 per metric ton. There is simply no product available for spot sales with shortages causing a ‘merging’ of prices for partly-approved and fully-approved stocks of Group III base oils.
According to sources there will be no relief to replenishment barrels for many months, with the starting point being the free transit of the Strait of Hormuz, a peace deal between U.S. and Iran, leading to P&I clubs removing heavy war premiums on vessel insurances.
Only when the above have been achieved will Group III base oils start flowing from undamaged facilities in U.A.E.. In Bahrain and Qatar, damage assessment will have to take place at the respective refineries to define a timescale for production of API Group III base oils to restart
Crude and Gas Oil Prices
Crude and product prices are treading water at lower levels than at the height of the U.S. and Israeli strikes on Iran, and the ensuing responses to those aggressive acts from Iran.
Economists have forecast crude prices to move lower during the second half of this year, with levels of $71 per barrel average for the remainder of this year. These levels could be relatively accurate with levels dipping close to $73/bbl for of dated deliveries of Brent crude during the course of last week, and in early trading today.
What is interesting is the crack between the two marker crudes has narrowed to around $2.50/bbl, perhaps indicating a move towards possible backwardation for West Texas Intermediate crude, although why this would be happening in not at all clear.
Dated deliveries of Brent: $72.90/bbl, August front month
West Texas Intermediate: $70.45/bbl, August front month
European low-sulfur gas oil: $906/t, July front month
Prices were obtained from London ICE trading late Monday June 29.
Europe
Availability continues to improve for Group I base oils particularly for heavy neutrals, although light neutrals and bright stock remain much in demand, keeping prices for these grades buoyant.
Demand is weak, however, with buyers group I base stocks, believing that eventually prices will follow distillate levels lower. Many blenders consulted during last week confirmed that with buying small quantities to maintain finished lubricant production, they could probably wait until September before replenishing inventories.
Finished lubricant demand has taken a hit from the rising prices of base oils and additives which have necessarily been passed on to lube prices. Markets are waiting to see the reverse of the price hikes which came over the last three months.
Producers are between a rock and a hard place, with high value feedstock stocks having been utilised to produce Group I base oils over the last couple of months, and now with a potentially ‘fluid and adjusting’ market, it may be difficult to reconcile raw material costs versus current selling prices.
Buyers’ counter is that producers sold base oils ex tank at inflated prices immediately following the surge in crude and feedstock prices at the start of the war, and now there has to be a balancing act where selling prices should move lower.
Prices increases were partly caused by sudden increased demand and a lack of available material caused in part by prioritising distillate fuels production, and two refineries having downtime with production problems.
Export sales still remain elusive with the European Group I market returning to imports which are now being offered FCA from cargoes recently arrived from Yanbu.
A major continues to send large cargoes to affiliated companies in Singapore and South Africa, and to contracted buyers in West Africa. In other reports these large cargoes have been described as European exports moving into Nigeria, but this is not the case. No European barrels have entered the Nigerian market.
Prices are adjusted particularly at the high ends of the ranges, but the dreads remain wider than normal with various sellers adopting different tactics when offering prices.
Group I
European exports, FOB
No current market.
Northwestern Europe, FCA Antwerp-Rotterdam-Amsterdam
SN150 : $1,875/t-$1,965/t
SN500 : $1,895/t-$2,100/t
Bright stock 150 : $2,150/t-$2,485/t
Eastern Europe, FCA
SN150 : $2,120/t-$2,195/t
SN500 : $2,225/t-$2,310/t
Bright stock 150 : $2,385/t-$2,575/t
Mediterranean prices, FCA Spain, Greece, Italy
SN150: $2,120/t
SN600/500: $2,200/t
Bright stock: Only small quantities available. Prices on demand
Pan-European, FOB/FCA, unchanged
SN150: €1,670/t-€1,755/t
SN500/600: €1,775/t-€2,080/t
Bright stock 150: €2,175/t-€2,290/t
Pan-European prices are assessed on an aggregate basis using prices from Scandinavia, Poland, France, Germany, Benelux, Spain, Italy, Greece, the United Kingdom, and Baltic States.
The euro/U.S. dollar exchange rate is quoted at $1,4193 on Monday 29th June 2026.
European Group II base oil prices are stable with very little impetus for change. Major suppliers maintain ‘posted’ price levels, but there are reports of discounts and TVAs being offered applied to a wide range of customers for purchases of Group II base oils.
With crude and feedstock values lower this week, it is expected that the ‘postings’ may alter during the course of the week, with suppliers dropping price levels.
Demand remains positive, but with adequate stocks in tank, buyers are reluctant to purchase large quantities. Some buyers are forced to purchase relatively large quantities if delivery is by barge, but with some buyers opting to take smaller truck deliveries rather than tie up capital in large inventories.
Truck deliveries can be up to $75/t more expensive, depending on distance and location, but even with this large differential, some blenders are prepared to forsake the premium, just to maintain lower stocks.
One item is buyers’ favour is that the Rhine and Mosel water levels have fallen significantly during the latest dry spell and barges are running into draft restrictions for certain sections of the river system.
Buyers are claiming that prices should be brought into line with an acceptable premium over diesel. The average premium for all Group II grades prior to the Iran war was around $450/t-$500/t, whilst at the moment, the average premium over diesel is around $2,000/t.
‘Posted price’ levels seen during last week are at around $2,575/t in respect of the 150N grade, with 600N at $2,630/t. Prices are on the basis of FCA sales Antwerp-Rotterdam-Amsterdam.
PK Orlen will add to the number of Group II suppliers when this company commences production at Gdansk refinery towards the end of this year.
Supplies of Group II base oils are being imported from Saudi Arabia with cargoes from Yanbu. With the European market traditionally having typically higher prices than alternative markets such as India and South Africa, there is an appeal to Red Sea producers to target the European market.
Prices are moved slightly lower, with levels heard at around €2,375/t-€2,470/t in respect of the 100N and 150N grades, with 600N between €2,550/t-€2,620/t.
Group II, FCA basis
110N: €2,365/t-€2,450/t
150N: €2,375- €2,465/t
220N: €2,345/t-€2,455/t
600N: €2,510/t-€2,625/t
Prices refer to a wide range of Group II base oils which may be sourced from within Europe, and also imported from U.S., Red Sea and Asia-Pacific.
If Iran allowed free passage through the the Strait of Hormuz tomorrow there would be no chance to moving any Group III cargoes from Al Ruwais. The current situation remains too volatile for traders and vessel owners to engage in any trade in the Middle East Gulf.
No Group III base oils will be arriving from Sitra in Bahrain or from Ras Laffan in Qatar, due to damage to the facilities at those refineries. There was been a massive explosion at Ras Laffan, ten days ago damaging the LNG loading facility. This news may further delay any resumption to GTL base oil production.
One base oil trains is currently functioning, but loading and obtaining vessels to sail into and out of Middle East Gulf at the moment is nigh impossible. Economics in the form of war risk insurance premiums, and logistical nightmares in finding suitable tonnage to load and sail cargoes to AsiaPac, U.S. and Europe is beyond the Pearl operation at Ras Laffan right now.
European buyers are vainly searching for alternative sources of Group III base oils, but established suppliers who have stocks of Group III have their own portfolio of customers, many of whom have purchased Group III base oils from the same supplier for many years.
There are more rumors that some U.S. traders may look at the European market, but the U.S. is also net short of Group III base oils right now, and laying hands on barrels to form a cargo is a tough call. Prices are lower in the U.S., and with European price levels holding firm, there may be scope to pursue this avenue.
Fully-approved Group III cargoes have loaded from Cartagena in Spain. A vessel has loaded and will arrive in Antwerp later this week.
The facility in Cartagena, having delayed planned maintenance earlier this Spring, will go into turnaround in late summer. It is not known how long production will be out, but this operator has vast experience and will have assessed the necessary logistics to cover the maintenance period.
Group III prices in respect of partly-approved material, FCA Antwerp-Rotterdam-Amsterdam and northwestern Europe, are maintained on the basis of diminishing availabilities, but with no spot availabilities, distributors are honouring prices established for June.
One seller informed this report that they had received bid offers from a number of buyers looking for any available material, The offers were in excess of $3500/t in respect of 4 centiStoke. The offers were turned down, due to the remnants in tanks being supplied to contracted customers.
Group III
Partly approved, FCA
4 centiStoke : €3,395/t-€3,425pmt
6 cSt : €3,395/t-€3,430/t
8 cSt: €3,250/t-€3,295/t
Fully approved, FCA Antwerp-Rotterdam-Amsterdam, Northwestern Europe, Spain
4 centiStoke: €3,395/t/t-€3,445/t
6 cSt: €3,380/t/t-€3,420/t
8 cSt: €3,425/t/t-€3,460/t
All the above products sold on a delivered basis will be subject to transportation charges, added to the prices above.
Rerefined Group III prices are also maintained. Sellers are holding back from offering extra quantities of these grades, with buyers receiving allocations based on historical purchases.
Rerefined, FCA Germany
4 centiStoke : €3,120/t
5cst : €3,125/t
6 cSt: €3,125/t
Baltic and Black Seas
Russian domestic base oil prices have seemingly moved higher, which seems to be happening almost on a weekly basis, and with rumored reports of shortages of base oils and additives in the Russian market, it could be possible that suppliers have little choice other than to increase prices to recoup raw material costs.
Drone strikes on refineries deep within Russia are being stepped up by Ukrainian forces and there is ‘third hand’ news that production of base oils along with fuels have been severely disrupted, with rationing and shortages reported from a number of regions.
Although the refinery outside Moscow does not produce base oils, the scale of the drone attacks are not limited to this one refinery, and it can be assumed that Lukoil, Rosneft and Bashneft production will have been affected.
News that Volgograd refinery was hit during last week, and sustained major damage, may have further curbed Lukoil base oil production from that unit.
There remain no reports of Russian base oil exports loading or leaving Baltic ports, and following Ukrainian strikes on facilities at St Petersburg terminal there may be damage.
Rumors heard around the market were suggesting that trains taking base oils and other petroleum products from refineries to shore terminals were being targeted.
A cargo has loaded out of Ulsan in South Korea for receivers in Turkey. This cargo will comprise of Group II base oils and is believed to have been purchased from GS Caltex in South Korea.
It is not known how this operation is controlled, whether the cargo is delivered on a CIF basis from the sellers, or if buyers in Turkey assume the role of charterers and purchase the cargo on an FOB basis.
It will be fascinating to see if the vessel transits the Red Sea and Suez, otherwise it will take an inordinately long time for the cargo to sail around the Cape and through the Mediterranean. All depends on the vessel’s rotation and voyage instructions for other ports.
Base oil supplies into Turkey from Iran remain halted due to the war, and with no Russian base oils available for import. This is causing problems for Turkish blenders, who are constantly looking for sources for low cost Group I base oils.
Re-refined base oils from Greece and Egypt and being purchased in flexes moving into Turkish ports.
Blenders in Turkey are also looking to Azeri and Uzbek sources, but logistics are difficult and expensive, and the full range of Group I grades is not available, with heavier solvent neutrals missing from the Uzbek slate.
Black Sea trade includes base oils going into Ukraine, with Eastern European refiners selling material into this market, but at the same time an ’insider’ source has informed this report that Russian base oils are still being utilised by some Ukrainian blenders, along with supplies from Naftan in Belarus.
Turkish blenders also purchase Group I base oils from AMOC and APC in Alexandria. Turkish buyers are also looking to Algeria to see if they can source barrels from Sonatrach. Is it not known if this will be Algerian produced material or whether supplies may be considered from Augusta in Sicily.
The Augusta product has REACH, whilst material produced in Algeria does not hold this status.
Group I, ex rack Izmir
Spindle oil: Tl 77,857.00/t plus, VAT Tl 18,511.30/t
SN150: Tl 76,676.00/t plus, VAT Tl 17,364.50/t
SN500: Tl 78,411.00/t plus, VAT Tl 17,711.50/t
Bright stock: Tl 94,765.00/t, plus VAT Tl 20,982.30/t
Sales incur a standard loading charge of Tl 10,146.50/t and should be added to the prices above.
Traders in Turkey have advised no sale offers will be forthcoming for Group II.
One of the large blenders in Turkey accounted for around 9,000 tons of finished lubricants imported into Ukraine during 2025. These lubes were for automotive and Industrial.
Partly-approved Group III prices:
Tatneft 4 centiStoke FCA: no avails.
There have been no Turkish imports of Russian base oils, including Group I and Group III, for months.
Fully-approved Group III from Cartagena, Spain, is no longer entering the Turkish market through Gemlik. This business may be resumed some time in the future.
Middle East
Cargoes loaded from Yanbu during May have been arriving in Antwerp-Rotterdam-Amsterdam, with one cargo loaded around mid May and a further two parcels loaded at end May which are giving ETAs of later this week and second week of July .
A cargo of Group II base oils has loaded for discharge in Durban.
A number of smaller cargoes are in planning for Port Sudan, Mombasa and Alexandria.
The IDF continues to bomb Hezbollah targets in southern Lebanon, declaring at the weekend that a ceasefire negotiated between U.S. and the Lebanese government in Washington was ‘invalid’, and sending missiles into Israel to follow up this statement. Israel have responded with the attacks into Beirut. Tehran appears unable, or unwilling, to intercede between Hezbollah and Israel to defuse the situation with their proxy. Hezbollah continues to strike Israeli settlements.
The sixty day ceasefire between Iran and U.S. continues but with varied comments from Iran it becomes very difficult to gauge to reality of a move the a peace solution. Iran have made a number of demands on U.S. which will be totally rejected, and it is a measure of how much Iran wants the conflict to continue.
The process from U.S. includes the complete re-opening of the Strait of Hormuz to merchant marine traffic, but Iran seems to want to hold on to their ‘ace card’ by putting claims to tolls or fees to be paid by any foreign vessel making the transit. Iran realises that it holds a real weapon with the ability to close the strait whenever they want.
Even if cargoes are discharged into shore storage, assessing prices to be set on these supplies remains vague, with some companies stating that they are required to pay demurrage to vessel owners prior to cargoes being discharged.
These sums are not insignificant with one United Arab Emirates receiver advising that at the moment they would have to remit around $1.6 million before the cargo can be discharged into tank. The value of the cargo is assessed at around $11.5 million, so demurrage is an unwelcome penalty. Prices for the base oil on board would have been negotiated prior to the Iran war, hence levels may be lower than market at the moment, but how long high prices will continue is not known.
Supplies of Group II base oils which were in storage are long gone with prices suspended until new cargoes can be discharged. Small quantities in trucks are coming in to a limited number of blenders, arriving by truck from Fujairah, the quantities are not resold, and are used in blending to produce small quantities of finished lubricants for local markets, including contracts for U.A.E. military and civil government.
Group III base oils, FCA Hamriyah/Sharjah port, or delivered by RTW in U.A.E. and Oman, are available from Adnoc at Al Ruwais. Quantities are not large, but further difficulties are in finding any other base oils to use in blends with Group III, and also accessing supplies of additives required to meet formulations. Demand is slow with prices unconfirmed.
FCA prices are suspended for the moment.
Netbacks in respect of Group III base oils ex Al Ruwais, Sitra and Ras Laffan are suspended for the time being.
Africa
A cargo of Group II base oils arrived into Mohammedia in Morocco under the auspices of a U.S. major delivering Group II base oils into a distributor.
A cargo around 3,000 tons of bright stock was delivered into Alexandria under the EGPC contract. The cargo loaded out of Yanbu.
The large cargo of Group II base oils that recently loaded out of U.S. Gulf Coast for receivers in Durban has discharged the part-cargo for Durban and will now discharge the remainder in Mumbai. Another U.S. Gulf Coast cargo it noted to be loading during the next couple of weeks for receivers in Durban. More details will become available later this week.
A large composite base oil cargo loaded out of Rotterdam and Fawley, supplying distributors and affiliated companies in South Africa. The vessel should discharge in Durban during second half July AGW.
The supply to Ghana, Guinea and Cote d’Ivoire has completed from reports.
This cargo is being continually mis-reported, with another base oil publication stating that the cargo was for Nigeria. This is categorically not the case since the cargo forms part of the supply under the Ghana tender.
Nothing new activity in Nigeria, apart from the rain and having heard from two traders who had recently visited Lagos, there is very little appetite for looking at new possible cargoes.
The rainy season has started and business is slowing with all the logistical problems which the rains bring. Receivers in Lagos have been unable to raise local prices to realistic levels, to take ensure funds are available for replenishment cargoes in the future. Buyers in Nigeria have not woken up to the facts surrounding prices, and are clinging on the hopes that numbers will revert to pre-Iran war levels.
There are also an increasing number of negatives in trading base oils into Nigeria at the moment.
Receivers are unable to contemplate paying more than $1900/t-$2000/t CFR for SN500, which is currently too low for any trader to consider, given that current FOB, plus freight, plus margins would come out at around $2,750/t.
If SN900 were included in any cargo, using bright stock as a blend agent, then the price in respect of this grade would come out at around $3,000/t, which receivers in Nigeria cannot even contemplate.
When supplies become tight and stocks are low in tank then local prices stand a chance of moving higher, but probably not to the levels required.
Finance will be a major issue at the current inflated price levels, with the dangers of back-trading and non-performance leading to traders demanding full coverage for any cargoes under a letter of credit. Buyers have reacted with shock at this condition, have been spoilt over the past few years with some traders creating their own problems by offering open credit, payment in naira, and extended settlement terms.
The Nigerian market will have to adjust to international prices, and that is not happening a this time, hence traders will be extremely reluctant to enter into supply negotiations for cargoes at this time.
Also looking to the USG and USAC sources for Group I base oils, is nigh impossible right now, due the hurricane season approaching with refiners building inventories as insurance against possible supply interruptions.
So without availabilities, prices too low, and financial risks unacceptable, Nigeria is cancelled for the time being.
The Nigerian unofficial naira exchange rate is NGN 1,378 to the dollar Monday.
No new offers have been made, nor will be made.
For the sake of historical value, cargoes which arrived into Apapa, sold at prices valid prior to the Iranian war. Levels were around the following numbers.
Group I, FCA Apapa
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.