Weekly EMEA Base Oil Price Report

Iran attacked three vessels late last week, instigating the latest round of tit-for-tat strikes by both sides. Iranian missiles have targeted U.S. bases in Kuwait, Bahrain and Oman, whilst U.S. forces have struck IRGC positions around the Strait of Hormuz.

With the escalation in fighting, crude and product prices have firmed over the weekend and in early trading this week.

Suffice to say that should the conflict continue, prices will move higher over the next few days, reinforcing the fact that Hormuz effectively remains closed to vessels either entering or leaving the Middle East Gulf.

From one dependable source this report has learned the true facts regarding moving base oils out of the Gulf. There have been reports of a vessel being chartered to load out of Adnoc facilities at Al Ruwais with destination USG, but this news would require additional information such as the name of the vessel, and dates for loading for verification.

It is suspected that the above is unfounded and that even if charterers were able to locate a vessel with owners willing to send a vessel through Hormuz, which seems unlikely, then freight would be around three times the rate payable prior to the conflict.

Owners would also expect charterers to cover all insurance costs, estimated to be around $1.5/t-$2 million for an 18,000-ton vessel. Charterers would also commit to undertake to cover all/any demurrage costs should the vessel become stranded and unable to exit or enter the Gulf.

Traders/distributors cannot work on the above terms and conditions, hence it would seem that any meaningful attempts to move Group III base oils from Middle East Gulf are remote.

With other facilities in Bahrain and Qatar seemingly unable to load base oils at this time, the situation appears impossible, until such times as a resolution to the Iranian conflict and the Strait of Hormuz is found.

Latest news is that vessels prepared to make the transit through Hormuz will be escorted by U.S. naval warships offering protection from Iranian shore based missiles, and fast launches used by IRGC to attack vessels at sea.

In Ukraine, in the alternative war zone, there are reports that long range drone strikes have been able to penetrate some 1500 kilometres into Russia, with Kyiv starting to exert pressures on the Kremlin to come to the negotiating table. Omsk refinery has been hit and set alight in the last few days, with operators Gazprom Neft, the largest Russian refiner, now experiencing shortages of fuel supplies for the domestic Russian market.

Damage is assumed to have been caused to base oil production from this plant, where Group I and Group II grades are normally produced. This could shorten up the availability of base oils further within Russia, and will curb any ability to export material to earn dollars for Putin’s war chest.

Ukraine has targeted a number of refineries deep inside Russia and will continue to bleed supplies of fuels and lubricants to the population, which will increase pressure on Putin to look at reaching some sort of settlement with Kyiv.

The above may mark a turning point in the illegal invasion of Ukraine, with the licensing of Kyiv to produce Patriot missiles from the U.S. administration last week. These missiles will be used to protect Ukraine against missile and drone attacks.

The conflicts rumble on with no early signs of abatement in either arena. Both wars are affecting global base oil markets, with changing supply chains and alternative avenues being explored to cover demand in many regions.

Base oil prices across the European, Middle Eastern and African regions were continuing to soften during last week with sellers perhaps trying to maximise deliveries  prior to the seasonal slowdown which is starting now, and which will continue through August until early September.

In sub-Saharan African regions the rainy season has started, slowing activity in markets such as Ghana, Cote d’Ivoire and Nigeria. In Europe a heatwave has drained many waterways and levels are critical for barge traffic trying to negotiate deliveries of base oils, among other bulk liquid cargoes.

With pressure coming back to bear on crude and feedstock prices, base oil numbers may go into ‘pause mode’ with sellers ceasing to offer discounted prices. With crude edging towards $80 per barrel in respect of dated deliveries of Brent crude, whilst prices are not expected to rise imminently, should continuing U.S. / Iran relations disintegrate further, base oils may see firmer umbers appearing for Group I and Group II grades in the regions.

API Group III prices remain at peak levels due to current shortages in Europe and other markets previously reliant on supplies from Middle East Gulf sources.

Crude and Gas Oil Prices

Crude prices have vaulted higher following U.S. statements indicating that the peace negotiations had been halted, and whilst all out war has not returned to the Middle East, skirmishes between U.S. and Iranian forces have started to escalate in the past couple of days, and may continue along this course until some critical point is reached.

European values for low-sulfur gas oil jumped around $100 per metric ton since last week.

Dated deliveries of Brent: $80.05/bbl, September front month
West Texas Intermediate: $75.10/bbl, August front month
European low-sulfur gas oil: $1,086/t, August front month

These prices were obtained from London ICE trading late Monday July 13.

Europe

Group I base oil availabilities has improved with prices weakening as demand waned but over the next few days the situation may develop into a wait-and-see position before gauging producers’ reactions to higher distillate prices.

Perhaps because base oil have been slower to adjust lower over the past month, it may be judged that prices should remain around current levels. If demand rises as a result of possible higher price levels, then numbers may start to firm.

Demand is the key to what happens next in the European Group I market, and with the holiday season now approaching fast, there may not be any impetus for buyers to revisit the market, perhaps believing that September may bring lower numbers as was initially called.

Buyers of Group I base stocks are still holding back, still hopeful that prices will fall across the summer period, when typically demand disappears until September.

Blenders contacted confirmed that, they could wait until September before replenishing inventories, when, as they were previously emphasising, prices will be lower than current numbers. This forecast scenario may be changing as each day goes by, with crude and feedstock prices rising once again.

Export sales still remain elusive with the European Group I market returning to imports which are now being offered FCA Rotterdam, from cargoes arriving from Saudi Arabia.

A major continues to send large cargoes to affiliated companies in Singapore and South Africa, and to contracted buyers in West Africa. These relatively large cargoes have been described as European exports in other base oil reports, although the practise is really about rebalancing global hubs.

A further large cargo has loaded out of Rotterdam for Singapore, even if it was considered that demand in that region had been covered, and that no further cargoes from Europe would be required.

Prices are maintained at current levels, awaiting to see reactions to crude and product rises. 

Group I

European exports, FOB
No current market

Northwestern Europe, FCA Antwerp-Rotterdam-Amsterdam
SN150: $1,825/t-$1,920/t
SN500: $1,875/t-$1,965/t
Bright stock 150: $2,150/t-$2,395/t

Eastern Europe, FCA
SN150: $1,955/t-$2,025/t
SN500: $2,100/t-$2,225/t
Bright stock 150: $2,355/t-$2,415/t

Mediterranean prices, FCA Spain, Greece, Italy
SN150: $1,960/t
SN600/500: $2,075/t
Bright stock: $2,350/t

Pan-European, FOB/FCA
SN150: €1,600/t-€1,695/t
SN500/600: €1,735/t-€1,900/t
Bright stock 150: €2,175/t-€2,275/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’s exchange rate to the U.S. dollar was $1.13869 Monday.

European Group II base oil prices were steady with most buyers looking to obtain discounts from high numbers advocated from producers and importers. Major suppliers had been maintaining their high ‘posted’ price levels, but last week saw some announcements of $50/t discounts being included in offers for July delivery.

With crude and feedstock prices rising, things may change during this week. With the trend having being on prices coming off, a sudden reversal may be on the cards.

Rhine and Mosel water levels are now declared “critical,” with some barge companies suspending operations and deliveries to certain locations. All European waterways have announced draft restrictions.

Buyers remain convinced that prices should be brought into line with an acceptable premium over diesel, but with diesel prices firming across Europe, the ’Posted Price’ levels currently seen remain at around $2,575/t for 150 neutral, with 600N at $2,630/t, on the basis of FCA sales Antwerp-Rotterdam-Amsterdam.

Supplies of Group II base oils continue to be imported from Saudi Arabia with cargoes arriving from Yanbu.

Prices are unchanged this week with this report keeping a watchful eye on reactions during the course of this week.  Levels are around €2,285/t-€2,365/t for 100N and 150N and €2,395/t-€2,470/t for 600N.

Group II, FCA basis
110N: €2,325/t-€2,400/t
150N: €2,325- €2,410/t
220N: €2,295/t-€2,370/t
600N: €2,410/t-€2,500/t

These prices apply to a wide range of Group II base oils sourced from within Europe and imported from the U.S., the Red Sea and Asia-Pacific.

With the Strait of Hormuz remaining problematic and now with Trump issuing an edict that all vessels will be subject to a ’20% of cargo value’ toll to transit the channel. The percentage does not spell out what the basis for the charge actually is and is being taken as an insult by Iran, whose representative says that Iran would be much fairer and charge a much lower fee!

Moving Group III cargoes from Al Ruwais is impossible.  As mentioned earlier in this report there are many economic reasons, in addition to practical negatives. The current situation is too volatile for traders and vessel owners to engage in any movements from the Middle East Gulf.

There has been one report of a vessel being chartered to lift a cargo for distributors in U.S. but this is discounted as false, with lots of ‘noise’ and rumors being circulated around the market, none of which have any real substance.

Group III base oils will not be arriving into Europe from Sitra in Bahrain or from Ras Laffan in Qatar, due to Iranian missile damage. A massive explosion happened at Ras Laffan, two weeks ago, damaging the LNG loading facility. Reports are that one of the two base oil trains producing gas-to-liquids Group III+ grades is functioning, but availability of LNG feedstock and loading facilities at the terminal remain doubtful.

European buyers are vainly searching for alternative sources of Group III base oils, but established suppliers who are maintaining stocks of Group III base oils, have their own customers.

Fully-approved Group III cargoes continue to load from Cartagena, Spain, but quantities allocated to the European market do not go near to covering the shortfall caused by lack of supplies from Middle East Gulf. Another vessel has loaded during last week, and it would appear that the producers is targeting the European market rather than look to India.

Prices for Group III with partial slates of finished lubricant approvals are again unchanged this week on the basis of diminishing or diminished availabilities.

Group III

Partly approved, FCA Antwerp-Rotterdam-Amsterdam, Northwestern Europe
4 cSt: €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, Spain
4 cSt: €3,395/t-€3,445/t
6 cSt: €3,380/t-€3,420/t
8 cSt: €3,425/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 maintained. Sellers are resisting offering extra quantities of these grades, with some buyers receiving only allocations based on historical purchases. Demand is high, with one major blender tying up a large offtake contract based on distillate prices.

Rerefined, FCA Germany
4 cSt:  €3,120/t
5 cSt:  €3,125/t
6 cSt:  €3,125/t

Baltic Sea

Russian domestic base oil prices are moving higher, with less availability from refineries which have been targeted and hit by Ukrainian drones. The latest is the Gazprom refinery at Omsk, where massive damage has been caused by Ukrainian long range drones.

Drone strikes on refineries deep within Russia are being ratcheted up by Kyiv with news that production of base oils along with fuels has been severely disrupted, with rationing and shortages reported in a number of regions. Ukraine has the capability of drones with a range of up to 2,500 kilometers. This means that refineries and storage terminals deep within Russian territory can be hit, with supplies of fuels and base oils disrupted.

Lukoil, Rosneft and Bashneft production will also have been affected with strikes at Volgograd, Novokuybyshevsk and Ufa refineries respectively.

There are no reported Russian base oil exports loading or leaving Baltic ports, whether in bulk or in flexi-tanks.

Rumors heard around the market were suggesting that trains used to deliver base oils and other petroleum products from refineries to shore terminals are being targeted by Ukrainian drones. Shore terminals are also being hit with relentless attacks from Ukraine. The war may be turning against Putin and his cronies in the Kremlin.

Black Sea & Turkey

The cargo loaded out of Ulsan in South Korea for receivers in Turkey is on the high seas and this cargo will comprise of Group II base oils having been purchased from GSC. The vessel appears to be heading through Red Sea bound for Suez, with no reported Houthi interventions.

It would appear that the cargo is being delivered on a CIF basis, with the sale being made by GSC to receivers in Turkey.

Group I base oils into Turkey from Iran remain currently halted due to the war, and with no Russian base oils available for import, Turkish buyers have been relying on Turkmeni and Uzbek barrels for Group I imports.

It may only be question of time before Russian buyers emerge to lift from these same sources, as availabilities run short from within the Federation.

Re-refined base oils from Greece and Egypt are purchased in flexies, and are moving into Turkish ports such as Gebze, Turkey,.

Black Sea trade includes base oils which move into Ukraine, with Eastern European refiners in Poland and Hungary selling material into this market, but a source has confirmed that Russian base oils were being used by some Ukrainian blenders, along with supplies from Naftan in Belarus, but these supplies may now be restricted due to demand from the Russian domestic markets.

Turkish blenders are purchasing Group I base oils from AMOC and APC in Alexandria. Buyers are also looking to Algeria to see if they can source barrels from Sonatrach.

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 are available for Group II.

A large blender in Turkey accounted for around 9,000 tons of finished lubricants imported into Ukraine during 2025. These lubes were for automotive and Industrial end-use.

Partly approved Group III grades are entirely missing from the Turkish market, and tis report has tried to investigate how blenders in Turkey are adapting in light of the supply problem. So far, there has been no definitive answer as to how formulations are being met without Group III base stocks.

Group III

Partly approved
Tatneft 4 centiStoke FCA: no stocks available.

Fully approved
From Cartagena, Spain: Not available

Middle East

Base oil cargoes loaded during May have arrived in Antwerp-Rotterdam-Amsterdam. One cargo loaded around mid May and a further two parcels loaded towards the end May which have now arrived in port. The size of these cargoes in unknown, but the three cargoes may have been Group l/Group II base oils.

A cargo of Group II base oils has loaded for discharge in Durban. The vessel sailed from Yanbu around a week ago, and will discharge in Durban either end July or first part of August.

Smaller Group I cargoes are in planned for Port Sudan, Mombasa, Alexandria and Aqaba. these may be loaded out of both Yanbu and Jeddah. The Sudan cargo will be all grades of Group I base oils, whilst the Alex. parcel will be around 3,000 tons of bright stock ex Yanbu.

The situation in the Gulf becomes even murkier with no progress being made by either U.S. or Iran regarding a permanent ceasefire or a peace solution. The sixty day period is fast expiring with no progress being made by either side.

Trump appears to have lost his temper with Iran calling them “scum” and “liars” and announcing last week that the U.S. should no longer negotiate with this nation.

The ceasefire has been called off by Trump, and the region resorts to a period of limbo, expecting the worst should the war return in full.

Quite what this course of action will achieve is anyone’s guess. In the meantime, strikes and counter strikes from both sides are happening night and day, with no end in sight. Iran has targeted U.S. bases in Kuwait, Bahrain, Jordan and Oman, while U.S. forces have deployed strikes against IRGC strongholds in southern Iran, along the coast bordering Hormuz.

Negotiations hinge around the Strait of Hormuz opening for all merchant marine vessels transiting the channel, but now with Trump levying a 20% toll for all vessels transiting the strait, to pay for protection and safe passage? The picture becomes no clearer as to a solution to the conflict. The U.S. blockade on all Iranian vessels were due to be resumed from Tuesday of this week.

There have been no announcements on possible negotiations between GCC nations and Iran, without the U.S. being involved. It is believed from local sources in Dubai that this possibility is still on the table and that an announcement will be forthcoming in the next few days.

Supplies of Group II base oils which had been in storage in United Arab Emirates are exhausted and long gone, and FCA prices have been suspended until replenishment cargoes can be discharged. Small quantities in trucks are coming in to a few blenders, arriving from Fujairah. Quantities are not being resold, and are being used to blend small quantities of finished lubricants for local markets, including contracts for U.A.E. military, police 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 small, but difficulties in finding other base oils to blend with Group III are right at the forefront, in addition to accessing the additives required to meet formulations. This report’s listing of FCA Group III prices in the UAE are also for the moment suspended, as are netbacks for Group III base oils ex Al Ruwais, Sitra and Ras Laffan.

Africa

A cargo of around 3,000 tons of bright stock will be delivered into Alexandria under the EGPC contract. The cargo is loading out of Yanbu before the end of July according to shipping reports.

A Group II cargo from Luberef has loaded and will discharge in Durban later this month, or early in August. Another U.S. Gulf Coast cargo has loaded for receivers in Durban. The cargo size is not known but the vessel is a large 18,000-ton chemicals carrier. It probably will have other parcels of chems on board for other receivers in Durban or on the West Coast of India.

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.

Another composite Group I cargo is under enquiry for vessels for deliveries into Conakry, Abidjan and Tema. More details will be available following loading, but the inquiry is for a cargo of 10,000-11,000 tons of three Group I grades. It will be interesting to see if another report picks up this cargo as moving to Nigeria, as was reported previously in erratum.

In Nigeria, the rainy season is underway. There is very little appetite for looking at new possible cargoes, and it may be after the end of the rainy season before traders even look at possibilities to offer material into this market.

One offer was made for a cargo from the West Coast of India consisting of Iranian and Russian Group I grades, but for whatever reason, presumably too highly priced, even this card did not fly for receivers in Nigeria.

Traders have almost given up on this market, with some saying that they have more appealing regions in which to conduct business, and will not waste time and energy chasing shadows around the Nigerian market which is not prepared to pay for replenishment barrels.

There are the associated risks, with buyers not prepared to open letters of credit to cover the value of highly priced cargoes, Hence no deal from reputable traders.

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. When supplies start to become tight and stocks are getting low in tanks, 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 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. 

Without availability, high prices, and financial risks unacceptable, Nigeria is not a place to be doing business.

For those still collecting receipts for the last round of cargoes, the official exchange rate for the Nigerian naira was NGN 1,321 Monday, while the black market rate was NGN 1,412.

Only one offer has been made, for the Indian cargo, but with no takers on that cargo, anything else would appear to be impossible.

Traders inform this report that they have “better fish to fry” in other markets in alternative regions, where real business can be transacted in a secure, timely and professional way,

For the sake of historical value, the last 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.