Europe, the Middle East and Africa are witnessing a degree of strength in base oil prices, even in the API Group III camp, where maintenance schedules have broken into the constant flow of cargoes from Middle East Gulf and from Asia-Pacific. These turnarounds are necessary for continuing efficient running of refineries, providing petroleum products and necessary feedstocks for the production of base oils from these units.

European Group I numbers are leaning towards stability, and even perhaps firmer prices to come in the coming weeks and months, and with the number of imports of Group I base oils continuing and increasing, there appears to be a keen market for incoming material. Group II prices around the regions are certainly not weakening but are steady at levels that have been established over the first months of this year. There continue to be rumored moves to apply increases to these grades, particularly in Europe, where demand is picking up prior to the Spring and Summer peaks for finished lubricants.

Arbitrage opportunities remain open for a flow of base oils from U.S. to both Europe and Middle East, with Far East sources moving shorter due to heavy maintenance programs in many of the refineries producing base oils, which in turn has limited the opportunities to move large cargoes into regions such as Middle East Gulf and India.

Crude prices have surprised many, with positive moves to slightly higher levels during last week. This is a strange outcome since OPEC+ members and other producers have all agreed that the will start to increase production which theoretically should have a diluting effect on global markets, putting pressure on prices to remain lower, or indeed to fall from current levels. This is clearly not happening as yet, with crude numbers firmer this week.

Dated deliveries of Brent crude is being quoted at $73 per barrel, still for May front month settlement, around two dollars higher than one week ago. West Texas Intermediate crude levels are also higher by around $2, currently pricing at $69.20/bbl, now for May front month.

European low-sulfur gasoil prices are firmer by more than $20 per metric ton from last week’s levels, now posting at $673/t, for April front month. Prices are taken from London ICE close, on Monday 24th March 2025.

Europe

The European Group I market is attractive to traders and majors who are sourcing material from U.S. and Middle East, since with a number of major turnarounds starting and planned for European refineries, there appears to be ample scope and opportunities for imported Group I grades which being resold on an FCA or delivered basis. Most of the supplied cargoes have arrived into Antwerp-Rotterdam-Amsterdam, with another couple of smaller parcels moving into the United Kingdom ports. Heavy neutrals, and especially bright stock, are being requested for European markets, since there appears to be a growing dearth of supplies from traditional producers of this grade.

Group I grades have arrived into northwestern Europe from U.S., Red Sea and ‘Egypt’ and following discharging in Antwerp-Rotterdam-Amsterdam and U.K. are being touted around the market.

Group I base oil prices continue to maintain acceptable premiums to distillates, and with less price erosion now evident as availabilities have tightened, prices may be expected to hold firm at leats at current levels, and may show signs of starting to rise should demand return as has been forecast by a number of players.

Overall demand may not actually be increasing, but what the European markets are seeing is a move to replenish stocks and inventories which were left at very low levels over the winter months. Buyers were of the opinion that availabilities were adequate to cover immediate requirements and rather than using working capital to cover large quantities of base oils, blenders were inclined to work from ‘hand to mouth’ by purchasing only necessary requirements.

European prices for Group I base oils are stable to firm with some regional availabilities for heavy neutrals and bright stock remaining tight.

This report has been fortunate to have heard prices offered by a major who imported material from USAC with numbers being offered FCA out of Antwerp-Rotterdam-Amsterdam at around $930/t (€860/t) for solvent neutral 150, $1,000/t (€925/t) for SN500 and $1,450/t (€1,345/t) for bright stock, although some bright stock suppliers around Europe were heard to offer above $1,500/t or euro equivalent.

Pan European ranges for euro priced material are therefore assessed at €840/t-€880/t for SN150, €890/t-€940/t for SN500 and €1,325/t-€1,420/t for bright stock, depending on quantity being purchased and availability.

The euro exchange rate to the dollar retreated a little to $1.07931 on Monday.

Upward pressures are being brought to bear on European Group II prices, particularly with imports from the U.S., where temporary maintenance shutdowns are shortening availabilities for exports. The tariff scenario could influence markets greatly over the next few months, with the EU and the U.K. awaiting the decision from the Trump administration as to tariffs which will be applied to U.S. imports of metals such as steel and aluminum, and other goods.

The tariff picture has not been properly analyzed yet, and depending on retaliatory tariffs coming into force from countries such as Mexico and Canada, there could be huge changes to base oil market dynamics over the coming months.

Group II demand is heard to be increasing around Europe, whilst at the same time blenders in Europe are weighing up options to increase usage of Group III grades rather than persist solely with Group II base oils. This is due to a crazy situation where prices for the range of Group III grades with partial slates of finished lubricant approvals are lower than Group II.  Adjustments are not feasible in all blends but can yield substantial savings when prices for some 4 centiStoke Group II grades some €150/t lower than light-viscosity Group II product.

European Group II prices are unchanged after rising last week. Prices are placed at €1,100/t-€1,125/t for 110 neutral and 150N, while 220N is at €1,140/t-€1,155/t and 600N at €1,185/t-€1,225/t. These prices apply to a wide range of Group II oils from Europe, the U.S., the Red Sea and Asia-Pacific. The prices pertain to bulk imports, but some smaller quantities are bought directly by lube blenders and delivered in flexi-tanks.

Group III base oil prices around Europe are stabilizing, but there are still odd offers from a couple traders that undercut going rates and add to the price erosion effect. Participants and distributors in the Group III market are postulating that there may be a boost effect from a number of blenders switching from Group II to Group III grades, but the overall effect may be insignificant in the grander order of the market.

Cargoes are being targeted at the European market, where remarkably, prices are more attractive than alternatives in India and China. Distributors are doing their best to promote sales of these grades, fighting to maintain market share with their loyal customer base, but lower offers often cause parts of the market to collapse.

Numbers heard in offers for 4 cSt  product are around $1,025/t (€947/t), but there was one confirmed offer of €945/t for that grade. There were no offered prices for 6 cSt.

The Group III market appears to have recovered from a spell when 6 cSt and 8 cSt grades were scarce due to a major problem encountered by one South Korean player. This supply problem has now been addressed and availability of those grades has returned to normal.

One distributor is offering a 4 cSt oil with a partial slate of approvals for €1025/t, whilst other parties are at €1,065/t-€1,090/t for 4 and 6 cSt, on an FCA basis ex Antwerp-Rotterdam-Amsterdam. Overall European and U.K. prices for Group III oils with partial slates of approvals remain assessed in a wide range of €945/t-€1,090/t for 4 and 6 cSt and €1,045/t-€1,100/t for 8 cSt, depending on buyer and quantity lifted. These rates are for FCA sales ex Antwerp-Rotterdam-Amsterdam and Northwestern Europe.

Prices for rerefined Group III grades are unchanged at €935/t-€970/t for 4 and 6 cSt, on an FCA basis ex rerefinery in Germany.

European prices for Group III oils with full slates of approvals are held existing levels are unchanged at €1,625/t-€1,695/t for 4 and 6 cSt and €1,720/t-€1,745/t for 8 cSt, all on an FCA basis ex hubs in Antwerp-Rotterdam-Amsterdam, Northwestern Europe and Spain.

Baltic and Black Seas

A method of estimating FOB prices loading out of St. Petersburg is to work backwards, arriving at an estimated netback price using landed prices in Gebze, Turkey, and best estimates on freight rates and margins. Prices relative to SN500 delivered on a CIF basis in Gebze are coming out around $595/t, which would give an FOB price back in St. Petersburg of around $510/t, assuming a freight rate of $85/t, which is the lowest rate possible for that voyage. It could realistically be assumed that FOB levels could be sub $500/t, which would effectively mean that Russian SN500 loaded on a train ex refinery at around $450/t.

These levels are incredibly low compared to European Group I levels, and it can only be assumed that Russian refineries have their own cost allocation process, which cannot be compared to Western standards. Hence sellers are able to compete and undercut any other base oils around the markets. Russian prices continue to be an enigma with variations on FOB prices seemingly dependent on delivery destination, since Nigerian delivered price levels are never as low as those numbers seen in Turkey.

FOB prices ex St. Petersburg are therefore guesstimated at around $485/t-$520/t for SN150, with SN500 between $495/t-$530/t and SN900 blended specifically for Nigerian receivers around $575/t, using Russian bright stock or SN1200 as a blend constituent. Prices for FOB Russian export barrels are indication prices only.

Russian base oils are definitely being used to blend finished lubricants in Ukraine. A number of blenders in that country are taking Russian barrels from traders and resellers in and around the Black Sea and Sea of Azov. Without any sanctions in place, Ukrainian blenders are free to purchase quantities of Russian base oils. These are not being sold directly by producers such as Lukoil or Rosneft, but through Turkish and Georgian traders who act as intermediaries between Russian refiners and end buyers.

What is not disclosed is how payments for these quantities of base oil are accounted for, or if settlements are made in local currency or in U.S. dollars. How payments are transferred back to Russian producers remains and unknown, since Western banks are supposed to play no part in transactions of this sort. Obviously Russian banks are involved with payments and transfers.

Russian, Belarusian and Turkish traders are in contact with Mexican importers who may be looking for alternative sources for Group I base oil following the imposition of tariffs by the  U.S. Mexico may respond to U.S. tariffs on Mexican exports by boycotting supplies of petroleum products including base oils from the U.S.

Mexico is the largest export market for U.S. Group I base oils. It is considered that Russian material could be offered to Mexican buyers on a delivered basis from stocks held in Turkey. On checking, there are no sanctions in place in Mexico banning the importation of Russian products.

A Turkish trader offers blends of Russian and Uzbek base oils at $770/t for SN150 and $785/t for SN500. In response to an inquiry for a potential cargo to Nigeria, SN900 was priced at $1,045/t, suggesting it would be blended with bright stock sourced either from an EU seller or from Yanbu, Saudi Arabia. Prices are offered ex works Gebze, with FOB levels to be a few dollars higher due to handling and loading costs.

Clarification regarding the status of base oil production at the Tupras refinery in Izmir, Turkey, indicates that production resumed following a fire, but prices have been hiked to such an extent that local buyers are unable to purchase quantities of these Group I grades.

Prices have been updated since last week and are now at: 42,577 lira/t for spindle oil; Tl 33,552/t for SN150; Tl 38,640/t for SN500; and Tl 54,874/t for bright stock. Note that the bright stock price converted to U.S. $1,444/t. These prices are ex rack Izmir refinery and incur an additional loading charge of Tl 8,199.20/t.

Group II ex works prices from a Turkish trader remain offered at $880/t for 110N and 220N and $1,100/t for SN350. Another source offering Group II from Taiwan has 500N at $1,500/t and 150N at $1,150/t. How these latter quantities arrived into Gebze is not known. Presumably they must have been shipped on a Chinese flagged vessel, which would be granted safe passage through the Bab-al-Mandeb Strait by the Houthis.

Group II base oils are imported from the Red Sea, the U.S., South Korea, Taiwan and Russia.

Group III 4 cSt from Tatneft in Russia is offered for around €955/t, while partly-approved Group III grades from other sources are priced at €1,095/t-€1,155/t. Dollar equivalent prices are also available. Some grades have been bridged into Turkey from cargoes that discharged in Antwerp-Rotterdam-Amsterdam.

Fully-approved Group III grades ex Cartagena, Spain, continue to be delivered into Gemlik and are priced there at €1,825/t-€1,855/t, on an FCA basis.

Middle East

Ramadan ends next Sunday, and the Islamic world will return to normal life without daytime fasting. Apparently February was an exceptionally slow month for base oil shipments out of Yanbu and Jeddah, Saudi Arabia. The reason is not clear, but sources have commented that the downturn was not connected to reduced hours during Ramadan, which began in late February. It is thought that cargoes from alternative sources had arrived into India and the United Arab Emirates, perhaps limiting the requirements for February and March arrival from Saudi Arabia.

A maintenance shutdown at the Luberef refinery in Yanbu is scheduled for mid-year, but neither would this have been a factor.

Base oils from Sepahan Oil continue to move out of Bandar-e Emam Khomeyni port in southern Iran. Two Group I grades are exported, and prices are heard at around $895/t for premium SN500 and $870/t for SN150, on an FOB basis ex Bandar-e Emam Khomeyni. Exports are sometimes moved first to Ras Al Khaimah, UAE, where cargo-sized quantities are assembled and dispatched to receivers in Pakistan or India. The product can also remain in the UAE for sale ex tank to blenders.

Prices for Group I material discharging in the UAE have been confirmed at $895/t-$925 for SN150, $940/t-$955/t for SN500 and around $1,295/t-$1,355/t for bright stock, all on a CIF or CFR basis ex UAE ports. Sources for these Group I base oils are either the U.S. or the Red Sea. Imports from Asia-Pacific have declined due to lack of availability and rising prices.

Russian base oils continue to arrive in Hamriyah port, but no news is heard regarding another ship-to-ship operation involving a Russian cargo of 15,000 tons at Hamriyah anchorage. Such a cargo could be intended for re-delivery to Apapa port in Lagos.

UAE prices for Russian base oils are estimated to be around $655/t-$795/t for SN150 and $655/t-$795/t for SN500, on a CFR basis ex Hamriyah port or STS anchorage. The high ends of the ranges are for material being discharged into storage in Hamriyah port.

Group III cargoes still load out of Al Ruwais, UAE, and Ras Laffan, Qatar, bound for India, Europe, the U.S. and China, but cargoes from Sitra, Bahrain, have slowed due to a 45-day maintenance turnaround taking place this month. During January and February, record quantities of gas-to-liquids Group III+ were shipped out of Ras Laffan to receivers in Mumbai anchorage, Jawaharlal Nehru Port in Mumbai and Chennai.

Netback levels for the Group III base oils from Middle East Gulf are unchanged this week, indicated at $1,075/t-$1,115/t for 4, 6 and 8 cSt Group III grades, on an FOB basis from producers.

Netbacks for gas-to-liquids Group III+ base oils loading ex Ras Laffan are higher, possibly between $1,155/t-$1,220/t. The supplier’s cargo economics and cost allocation are not disclosed.

FOB netback levels are assessed from distributor selling prices minus estimated marketing, margins, handling and freight costs.

Group II base oils are imported from the Red Sea, the U.S., Europe, South Korea and Singapore and are resold ex tank in the UAE or on a truck-delivered basis in the UAE and Oman. FCA ex-rack price are unchanged this week at $1,455/t-$1,500/t for 110N, 150N and 220N, with 600N at $1,535/t-$1,575/t. These grades will be priced in UAE dirhams, which are pegged to the U.S. dollar. The current exchange rate is AED 3.67. The highs of these ranges refer to RTW deliveries to buyers in locations in UAE and northern Oman.

Africa

A cargo of around 4.0,000 tons of Group I base oils has sailed or will sail from a southern Spanish port to Casablanca for Samir in Morocco.

The next large cargo for ExxonMobil should load in the next few weeks out of Rotterdam and Fawley, U.K., with around 19,000 tons of various types and grades of base oils. This cargo will discharge in Durban, South Africa.

A cargo of around 10,000 tons is planned to load ex Fawley for three ports in West Africa. The vessel will discharge first in Conakry, Guinea, then to Abidjan, Cote d’Ivoire, and finally discharge 5,000 tons of Group I SN150, SN500 and bright stock in Tema, Ghana.

The 18,000-ton cargo from the U.S. Gulf of Mexico Coast has arrived and has finished discharging. SN150, SN500 and SN900 were the grades on board. A second cargo for the same trader, around 10,000 tons, loaded and should have arrived in Apapa last week. The bulk of this cargo will be SN900, but of course it will have been blended using bright stock, making the price higher than receivers would have preferred. Nevertheless, taking Western produced Group I is still preferable to using an SN900 grade blended with Russian SN500 or SN150 and SN1200 or Russian bright stock, which can have dark color and a low viscosity index. Some Russian bright stock grades have a VI as low as 84.

Buyers in Nigeria are objecting to paying higher prices for SN900. In future they may only take SN150 and SN500, using the SN500 as a high-viscosity grade. Without bright stock or SN900, the viscosity of finished lubricants would be too low for adequate performance. Formulations cannot be adjusted to take account of this change, and the finished products will be inferior.

Russian base oils imported from the Baltic and Egypt are offered in Nigeria from a number of traders, all with extremely low prices. Traders are looking to load a large cargo with one discharge port in Lagos and another in Mexico, an impossible scenario.

The exchange rate for naira to U.S. dollars is quoted at NGN 1,538, marginally lower than one week ago. CFR Apapa prices for U.S.-sourced material are confirmed at $965/t-$980/t for SN150, $990/t-$1,010/t for SN500 and $1,080/t for SN900.

There are lower offers from other sources – $910/t CFR for SN500 – but this level can only pertain to Russian base oils.

Russian Group I base oils imported from Russia or Egypt are priced at $895/t for SN150, $910/t for SN500 and SN900 at $985/t, all basis CFR Apapa.

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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