Base oil prices are generally showing weaker numbers, with API Group l taking the brunt of price cuts. Group II markets across Europe, the Middle East and Africa are also starting to see chinks in the armor, where the differential between Group l and Group II price is becoming greater. This is leading to buyers requesting price reviews for purchasing quantities of Group II base stocks moving forward into December.

European sellers of Group II imports from the U.S. face another problem due a slide in the euro’s exchange rate with the U.S. dollar. Selling in euros and accounting in dollars is putting pressure on importers to maintain higher euro prices to maintain dollar margins. The exchange rate has moved downwards from €1.11 at the end of August to €1.04 this week.

The year end is expected remain quiet, with many operations throughout EMEA looking to take extended breaks around the Christmas and New Year holiday period. Some blending companies have advised that they will close for around three weeks to save costs, others until mid-January. Activity is not expected to pick up again until the spring season begins around the end of February in the northern hemisphere. Buyers are not rushing to build inventories ahead of the year end since availabilities of all types of base oil being described as excellent, hence there is no pressure to sink capital into stocks that may sit in tank for several weeks or even months.

Group III prices in Europe remain attractive to producers when comparing to price levels in the U.S. and other markets such as India. Prices remain under considerable pressure, although there have been some reports of 4 centiStoke grades becoming tighter. Replenishment cargoes expected prior to the New Year may remedy this situation.

Producers are keen to maximize sales and hence imports of Group III into markets such as Europe and the U.S. due to supply pressure coming about with new production facilities in China and other parts of Asia-Pacific. Supplies of Group III coming out of the Gulf and Malaysia are no longer required in quantities demanded previously.

Crude and feedstock prices have been steady over the past week, and with a measure of stability comes less expectation that prices are about to alter dramatically due to new geopolitical events happening. The major conflicts in Ukraine and the Middle East have largely been factored into current prices.

Dated Brent has remained around the same levels all week, currently posting at a level of $73.20 per barrel, still for January front month. West Texas Intermediate has also maintained levels around last week’s price at $69.25/bbl, now having moved to January front month.

Low-sulfur gasoil levels are also steady, only moving by around $3 per metric ton over the past week. This week’s price is at $680/t, for December front month. All of these prices were taken from London ICE trading late Nov. 25.

Europe

Motor Oil Hellas’ announced it will replace one of the vacuum distillation units at its refinery in Aghio Theodori, Greece, following a fire, and this may take some time to complete. Estimates are for the work to be finished around the third quarter of 2025. It has been established that by importing feedstock and amending production methods, base oil production should be maintained throughout the reconstruction process. There have been no further reported quick fire sales of Group l solvent neutrals at very low-price levels, following the sale of SN 150 at a level reported at $750/t FOB.

Prices for Group I sales in Europe continue to show weaker numbers on elusive demand. This market has completely changed from the summer period, when supply was tight, and buyers were looking to distant sources to cover anticipated requirements. Now material is freely available, and prices are coming off.

Availabilities from Poland and Hungary now have solvent neutral 150 around $925/t and SN500 at $980/t, on an FCA basis. Moving forward into December, there are no great expectations that demand will pick up, in fact the opposite is the case where most players are seeing further inactivity leading to a dull market.

Mediterranean prices are also weaker at $930/t-$945/t for SN150, while SN500/600 is being offered at $980-$1,000/t and bright stock at $1,180/t-$1,220/t. Even with a turnaround at Cepsa’s refinery near Algeciras, Spanish buyers do not appear to be showing concern with finding availabilities. Most have taken precautions to stock up prior to the maintenance if purchasing regularly from this source.

European FCA euro prices are moved down for December, with SN 150 at €900/t-€925/t, SN 500/600 at €940/t-€985/t and bright stock at €1,165/t-€1,225/t, depending on quantity and availability.

The dollar-euro rate has moved lower to $1.04910 Monday. The average price differential across all grades between Group I sales within Europe and any export market numbers, is reduced to €10/t-€25/t, with both sets of prices almost in line with each other.

European Group II prices have seen suppliers moving levels downwards trying to forestall buyers’ requests for discounts and total volume allowances to be applied. With the euro weakening against the dollar, importers relying on dollar-priced supplies from U.S. producers who are under pressure to maintain prices at current levels.

European Group II prices are taken lower moving into December, with levels at €1,085/t-€1,120/t for quantities of 110 neutral and 150N €1,125/t-€1,150/t for 220N and €1,175/t-€1,210/t for 600N. These prices apply to a wide range of Group II base oils from Europe, the U.S., the Red Sea and Asia-Pacific, imports coming in bulk.

The European Group III market remains popular with producers in the Middle East Gulf and Asia-Pacific, but with this added pressure to fit more cargoes into a limited market, distributors are finding it almost impossible to move quantities in tank. This has led to an oversupply situation that is creating price pressure on existing levels. Attempts to hike prices to reflect extra costs involved in shipping have been shelved by most suppliers, but with suggestions that 4 cSt grades could be starting to become tighter, there have been moves to mitigate increased shipping costs with some suppliers able to move numbers slightly higher.

As demand fails across Europe, prices are adjusted lower going into December. One seller is offering 4 cSt at €1,155/t, while other suppliers are offering 4 cSt at €1,220/t-€1,235/t, on an FCA basis ex Antwerp-Rotterdam-Amsterdam, and 6 cSt at about the same price.

There are reports of 4 cSt becoming short, but this seems to only apply to one Korean supplier, which is expecting another replenishment cargo to arrive at Rotterdam before year end. Presumably, this arrival will solve any potential shortage.

Overall European prices for Group III oils with partial slates of finished lubricant approval or no approvals are now assessed at €1,135/t-$1,250/t for 4 and 6 cSt and €1,225/t-$1,300/t for 8 cSt, all on an FCA basis ex Antwerp-Rotterdam-Amsterdam or Northwestern Europe.

Prices for rerefined Group III grades are unchanged at €1,135/t-$1,175/t, basis FCA ex rerefinery in Germany.

Prices for Group III oils with full slates of approvals are at €1,775/t-€1,810/t for 4 and 6 cSt and at €1,820/t-€1,835/t for 8 cSt, on an FCA basis ex hubs in Antwerp-Rotterdam-Amsterdam, Northwestern Europe and Spain.

Baltic and Black Seas

Frustration is the name of the game for tracing vessels loading out of the northern Baltic ports, with little information and data being published. It is not until a vessel arrives at her destination for discharge that it becomes apparent that she had loaded out of the Baltic Sea some weeks previously. FOB prices for Russian SN150 and SN500 ex-St. Petersburg or Vyborg, Russia, are calculated from prices being offered into Nigeria or Singapore, since cargoes for both destinations may load from the Baltic in addition to vessels loading from the Black Sea

Netting back from delivered prices into known ports, FOB Baltic numbers are assessed at around $765/t-785/t for SN150, $795/t-820/t for SN500 and SN 900, which will be blended specifically for Nigerian receivers, around $865/t.

European and other base oils are moving into Baltic ports in Lithuania and Latvia, where previously Russian Group l material was the staple blend stock. Greater quantities of both Group II and Group III base oils are being used now in the Baltic States than in previous times, with blenders taking the step to premium base oils for new formulations and specifications.

Another Tupras tender is being considered for December or January, but it is difficult to consider how a large quantity of three grades of Group l base oils can be made available following the fire at the refinery in Izmir.

On the offer for export barrels from Turkey, SN900 was priced at $1,100/t, basis ex-works Gebze. This grade will probably be blended using bright stock, hence the high price level. SN150 is being priced at $810/t and SN500 at $825/t. These grades are of Russian origin. The economics of the exercise means that given costs of storage, handling and a margin for the trader, the CIF-delivered prices for SN150 and SN500 would be around $740/t and $755/t, respectively. This extrapolates into an FOB price level below $650/t for both grades.

Tupras continues to quote prices for the local market, but there’s still uncertainty as to availabilities after the compressor fire. Also, if another tender is being considered for December, these barrels may not be available for local sales. Local prices are 35,462 lira per ton/t for spindle oil; Tl 31,593/t for SN150; Tl 33,721/t for SN500; and Tl 45,038/t for bright stock. Prices are in lira and are offered ex rack, plus a loading charge of Tl 5,150/t.

Group II FCA levels are at $890/t-$1,100/t  for 110N, 220N and 350N and at $1,300/t-$1,325/t for 500N. Higher spec 150N is also available at between $1,150/t-$1,175/t. The latter grades are thought to have been supplied from Yanbu, Saudi Arabia. Group II base oils are imported from the Red Sea, the U.S. and South Korea.

Partly approved or non-approved Group III base oils on an FCA basis include Tatneft’s 4 cSt grade, which was heard priced around €1,220/t. Quantities of fully approved Group III grades from Cartagena in Spain continue to be delivered into Gemlik. Prices are unchanged at €1,960/t-€1,995/t, on an FCA basis.

Middle East

Reports of large cargoes of Group l and II base oils loading out of Yanbu and Jeddah Saudi Arabia, continue to be big news for material going into Mumbai anchorage. It is considered that these quantities are all Group II since India is now producing excess Group l due to the large cargoes of Russian crude being processed through local refineries. Luberef has supplied Group II material to the Turkish market, and these stocks are being resold ex-tank.

Base oil trade to and from Middle East Gulf ports is being badly affected by the current situation in Iran, with some protection and indemnity clubs (insurers for vessels operating in the region) considering declaring parts of the Gulf a war zone – with all that implies for insurance costs for vessels. This may all change if an Israeli-Hezbollah agreement is finalized.

Prices for imported Group l arriving at Gulf ports, predominantly the United Arab Emirates, are maintained at $990/t-$1,020/t for SN 150, $1,035/t-$1,065/t for SN500 and $1,125/t-$1,180/t for bright stock, all on a CIF or CFR basis ex U.A.E. ports. These prices refer to imports from Thailand, India and Singapore. They do not apply to Russian imports of base oils, which are much lower.

Russian base oil cargoes continue to arrive at Hamriyah in the U.A.E., with the cargo for Nigeria transferred ship-to-ship by the original vessel, which had around 15,000 tons of Russian grades on board. The vessel delivering the cargo to Lagos is now reported off the coast of Angola enroute to Apapa port. The vessel left Durban after just one day and passed the Cape of Good Hope four days ago. The expected time of arrival at Lagos port is given as Nov. 29.

Russian prices basis Hamriyah anchorage, are estimated to have been around $785/t for SN150 and $795/t for SN500. SN900 could be priced at around $845/t. It is also assumed that the cargo was pre-blended, with the SN 900 grade already blended before the ship-to-ship operation. Assuming freight cost of around $200/t from Hamriyah to Apapa and a margin for the trader involved, prices delivered into Nigeria are estimated at around $995/t for the SN150, $1,025/t for the SN500 and $1,080/t for the SN900.

The Group III tender from Bapco’s Sitra, Bahrain, refinery has been awarded to a European trader who is reportedly taking the cargo to the European market. The extra costs of freight and extended voyage time will bring the costs of moving the material to around $135/t from Sitra to Antwerp-Rotterdam-Amsterdam. The quantity of thereunder is reported to be a total of 6,000 tons, made up of three grades – 4 cSt, 6 cSt and 8 cSt. The split of the cargo is not known.

Netbacks for Group III loaded from Al Ruwais, U.A.E., and Sitra, Bahrain, moving to Europe are unchanged at $1,125/t-$1,200/t for 4, 6 and 8 cSt grades.

Netbacks for Shell gas-to-liquids Group III+ base oils ex Ras Laffan, Qatar, are unchanged at $1,295/t-$1,325/t. Shell cargo economics and cost allocation are not disclosed; hence netbacks are on an indication basis only. Netback levels are assessed from distributor selling prices, minus estimated marketing, margins, handling and freight costs.

Group II base oils imported and resold ex-tank in the U.A.E. or on a truck delivered basis in the U.A.E. and Oman are priced at $1,600/t-$1,655/t for 100N, 150N and 220N and at $1,685/t-$1,725/t for 600N. These grades are sold in U.A.E. dirhams since the U.A.E. currency is pegged to the dollar. The highs of the ranges refer to RTW deliveries to buyers in locations in the U.A.E. and northern Oman.

Africa

The large cargo of mixed base oils previously reported to have loaded from Rotterdam and Fawley, U.K. should now be enroute to Durban and should be arriving in that port around the end of December. The quantity on board is given by shipping agents as 18,000 tons, consisting of several grades of base oils and a small quantity of easy chems, which may be Group IV or Group V base oils.

News from West Africa indicates that the cargo of 9,000-10,000 tons of Group l base oils from ExxonMobil, which loaded from Fawley, is believed to have discharged in Tema, Ghana. The vessel has sailed to Abidjan, Cote d’Ivoire, and then Conakry, Guniea, to complete the discharge of the total cargo. 

In Nigeria, exchange rates and finance continue to plague the market for base oils. The rate is now 1,750 naira to the dollar on the black market. This rate can change daily, making exchanging naira a risky and unpredictable experience for traders trying to balance a cargo in dollars.

Russian base oils sitting in tank in Apapa continue to almost control the base oil market in Nigeria. Russian prices have become the standard, with international traders offering barrels from the U.S. being expected to compete with Russian prices. The traders are also being asked for extended credit and flexible payment options in dollars and naira. When there is more than one receiver, which is normal for a large cargo of maybe 18,000 tons, the payments can be complex and risky.

Gone are the days of a letter of credit opened in Nigeria and confirmed by a first-class European bank. Payment was done on the basis of 30 days following date of bill of lading.

The FPMC 35, which loaded ship-to-ship at Hamriyah anchorage, is now reported to be off the Angolan coast, giving an ETA into Lagos of Nov. 29. Why the vessel entered Durban port for only one day is unknown, but local shipping agents suggested it may have been a crew change.

With FOB prices dipping in the U.S., values for theoretical shipments from that region to Lagos could be around $1,055/t-$1,085/t for SN150, $1,100/t-$1,120/t for SN500 and $1,145/t-$1,170/t for SN900. Russian- and U.A.E.-delivered prices for Russian barrels have levels indicated at $995/t for SN150, $1,035/t for SN500 and $1,085/t for SN900, all on a CFR basis ex Apapa.