Talking last week to a number of sources around Europe and the United Kingdom, it was clear that the unknown was discouraging buyers from engaging with suppliers, since many cannot forecast what will happen if the announced tariffs kick in.

Seeds of doubt are being sown throughout Europe, the Middle East and African, as almost all regions stand to be affected. The only positive hopes are that Trump will roll back on many of his threats and scale down the level of tariffs.

Meanwhile, the war in Gaza continues, Houthi militants in Yemen maintain a hostile stance toward commercial shipping in the Red Sea, and the U.S. and allies continue bombing Houthi facilities. The objective is to re-open the Red Sea route through the Suez Canal, undoing increases in transportation costs and voyage times for a large portion of the globe’s commercial shipping.

The tariff drama has caused a run on the U.S. dollar, reducing exchange rates against all other major global currencies. This has lowered values of U.S. goods and services, including base oils – for example API Group I and II stocks exported to Europe. The drop in the dollar’s value either eats into seller profits or requires them to raise prices, which hurts competitiveness.

Tariffs are also impacting forecasts for energy markets; some analysts predict the announced taxes could cause prices for dated deliveries of Brent crude could fall below $60 per barrel this year and next due to the drag on the economy.

Earlier this week, Spain and Portugal suffered severe power outages that reportedly may have been caused by cyber attacks on power networks. Other countries – reported to include Germany, Hungary and Greece – appear to have suffered smaller problems.

The outages may have affected base oil production from refineries in Spain – the Cartagena joint venture between Repsol and SK Enmove and the Cepsa plant in San Roque. Neither provided details by publication.

Energy markets and their players are being extremely cautious following the U.S. tariff  announcements. Crude and natural gas prices are much lower than one month ago, and prices appear steady, if not stable.

Dated deliveries of Brent crude were at $65.35 per barrel Monday,still for June front month settlement, down less than $1 over the past week. West Texas Intermediate dipped around $1.5 to $61.60/bbl, now for June front month.

European low-sulfur gasoil prices rose just a dollar to $621 per metric ton, still for May front month. All of these prices were obtained from London ICE trading late Monday.

Europe

Uncertainty remains the theme throughout European Group I markets, with no clarification on tariffs coming from the European Union or national governments – even though time is running on a 90-day pause taken by Trump. The main focus is the automotive industry, with supplies of finished lubricants hanging in the balance should large tariffs be imposed on cars and parts entering the U.S. market.

Base oil sellers say they have little choice other than to wait and see what transpires. Almost all buyers approached by your columnist have said they are buying on a need-only basis, converting confirmed orders for finished lubricants into base oil and additive purchases.

Buyers are also saying that availabilities are ample, further removing incentive to stock up on base oils. Some were previously outlining that supply was becoming tighter, but evidence is that producers and other sellers are encouraging buyers by canvassing them to buy, offering discounts that in some cases are substantial.

Sources commented last week that with time running down on the ninety day period, they are no further forward in receiving meaningful information, with which buyers acting for many blenders could make decisions as to which way to turn.

A number of refineries that produce base oils are still scheduled to undergo temporary shutdowns for maintenance – some planning major turnarounds while others are only conducting routine maintenance.

European prices for Group I base oils are starting to dip, but with so many unknowns it is difficult to read the direction of the market.

FCA levels ex Rotterdam are $920 per ton for solvent neutral 150, $985/t for SN500 and $1,450/t for bright stock. On contacting the seller of these grades, this report was told that only dollar prices are valid due to the unreliable euro dollar exchange rate that could wipe out margins.

Across the European regions, euro prices are in wide ranges of €805/t-€885/t for SN150, €865/t-€945/t for SN500 or SN600 and €1,255/t-€1,400/t for bright stock, depending on quantity purchased and availability.

The dollar has maintained its position during last week, posting on Monday 28th April 2025 at $1.14093.

European demand for Group II base oils has dipped markedly over the past three weeks, with buyers waiting to see what will happen with EU and U.K. tariffs. As things stand, in around 60 days a levy of 25% will be placed on European and U.K. cars and parts exported to the U.S.

Group II price levels may be feeling downward pressure since premium base stocks are widely used to make the latest range of automotive lubricants.

European Group II prices are unchanged after last week’s downward move, staying at €1,075/t-€1,110/t for 110 neutral and 150 neutral, at €1,125/t-€1,150/t for 220N and €1,155/t-€1,200/t for 500N. These values apply to a wide range of Group II oils from Europe, the U.S., the Red Sea and Asia-Pacific. For imports the ranges mentioned pertain to bulk shipments, but smaller quantities are being bought in flexi-tanks transported directly from traders or overseas suppliers.

Group III supply around Europe is showing signs of tightening, due to a number of factors. First, there are a number of delays to Middle East Gulf and Malaysian cargoes meant to replenish stocks in Europe. Meanwhile, a maintenance turnaround at Bapco’s refinery in Bahrain is limiting availability to a distributor, who in turn has been unable to supply regular buyers around Europe.

Major turnarounds at Asia-Pacific suppliers should keep the market from returning anytime soon to its recent oversupply situation.

One Group III supplier who appears determined to sell at lower prices offered 4 centiStoke material for May purchases at around $1,090/t (€955/t) for 4 centiStoke – at least for regular buyers. Whether this can be considered as a loyalty bonus is not clear.

More generally, prices for Group III oils with partial slates of finished lubricant approvals have firmed to new recent highs of €1,095/t-€1,125/t for 4 cSt, on an FCA basis ex Antwerp-Rotterdam-Amsterdam.

European and U.K. prices for partly-approved grades are therefore assessed at €945/t-€1,125/t for 4 and 6 cSt and at €1,085/t-€1,140/t for 8 cSt, all on an FCA basis ex Antwerp-Rotterdam-Amsterdam and Northwestern Europe.

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

Prices for rerefined Group III grades are unchanged at €955/t-€985/t for 4 and 6 cSt, on an FCA basis ex rerefinery in Germany.

Baltic and Black Seas

FOB prices ex St. Petersburg for the two main Russian grades are estimated to be around $495/t-$520/t for SN150 and $500/t-$530/t for SN500. If SN900 is required for Nigerian receivers, then this blended grade would be estimated at around $565/t, using Russian bright stock or SN1200 as a high-viscosity blend agent.

One anomaly is that there appear to be fewer cargoes moving out of the Baltic to Turkey or Singapore. Turnarounds at a number of Russian refineries may be affecting availabilities in the north, but there have also been a number of Ukrainian strikes on refineries the past few months, and these may have curbed availabilities and required redirecting material to cover domestic demand

The prices above are exceptionally low compared to European Group I levels, but Russian refineries may have their own cost allocation processes. Using state owned, low-priced Urals crude, low-cost labor costs and negligible refinery operating expenses, refining units could possibly supply base oils at such prices and still maintain acceptable margins.

FOB prices for Russian export barrels are published only as indications.

Russian base oils and additives continue to be used by blenders in Ukraine – a practice that appears to be approved because of practical necessity. Russian sources are the only supply point for Ukraine to access low-cost Group I base oils. Perhaps it is seen as depriving Russian blenders from getting their hands on these base oils?

Negotiations and deliveries tend to be expedited through traders or distributors based outside Ukraine. Payment processes are unclear because internal Russian banks have no access to the Swift international payment system, meaning Ukraine banks cannot not transfer funds to Russian sellers. It is considered that most of the trade in Russian hydrocarbons is conducted outside Russian territories, but funds must eventually end up within the republic.

It has been found that Russian companies have accounts outside the  boundaries of Russia in  locations such as United Arab Emirates, India and China. North Korea is also a possibility, with funds filtering through the system using banks in Belarus for example.

Rumors of Russian base oils becoming tighter in Turkey could be true. With fewer cargoes arriving from the Baltic and Lukoil’s Volgograd refinery possibly damaged by drone strikes, there may be some basis to the stories going around the Turkish market. A number of storage installations have been hit around the Sea of Azov, perhaps limiting the quantities of base oils being exported.

Turkish traders still offer a blends of Russian and Uzbek base oils at $745/t for SN150 and $765/t for SN500. A batch of SN900 that was part of a Nigerian inquiry was priced higher, at $1,045/t, suggesting it was made with bright stock sourced either from an EU seller or from Saudi Arabia. 

A source in Istanbul says Group I base oils are available from the Tupras refinery in Izmir, Turkey, but that prices have moved too high for local buyers. Those values are unchanged this week 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. These prices are ex rack Izmir refinery and incur an additional standard loading charge of Tl 8,199.20/t.

Group II ex works prices from a Turkish lubricant blender are being offered at $865/t for 110N and 220N and $1,110/t for 350N. Taiwan-sourced Group II is offered at $1,500/t for 500N and $1,150/t for 150N.

Group III 4 cSt from Tatneft in Russia is offered at €995/t. Other Group III oils with partial slates of approvals are priced higher at €1,125/t-€1,155/t. Some of the latter products have been supplied in flexies from storage in Rotterdam, which was supplied from larger earlier shipments.

Group III oils with full slates of approvals are delivered from Cartagena, Spain, into Gemlik and are priced at €1,825/t-€1,855/t, on an FCA basis.

Middle East Gulf

April has seen a large increase in the quantities of Group I and II base oils moving out of Yanbu and Jeddah, Saudi Arabia. A number of large cargoes moved to the West Coast of India and the United Arab Emirate – approximately 67,000 tons of all products during April, according to shipping reports, with six vessels carrying cargoes ranging between 4,000 tons and 19,000 tons.

Cargoes of Group I and II are also moving from Yanbu to Europe, Egypt and Turkey.

With Houthis continuing to threaten merchant marine ships passing through the Bab-al-Mandeb Strait, it is not clear how vessels loading out of Yanbu and Jeddah can achieve safe passage, Iranian officials have called for them not to be harmed. It would be somewhat surprising to see Saudi and Iranian agreement for these ships to conduct cargoes to the U.A.E., the West Coast of India and Pakistan

U.S. tariffs are not the prime subject for Middle East companies, since the exports to the U.S. from this region are negligible apart from the quantities of Group III base oils flowing from Qatar, the UAE and Bahrain. Group III base oils from the Middle East Gulf have been exempted from U.S. tariffs, hence supplies will proceed as normal.

There have been a few small cargo movements noted loading out of Bandar-e Emam Khomeyni, normally a conduit for base oils from Sepahan Oil. Rubber process oil cargoes are continually coming out of Iran, regularly going into India, though often after moving first to Ras al Khaimah where they are consolidated. Some cargoes from Ral al Khaima are also shipped to receivers in South Korea.

FOB prices for Sepahan Group I oils have to be competitive in the Indian market, and it is understood that Iranian prices have been discounted for regular sales to receivers in Haldia and Mumbai. Numbers were heard lower at around $885/t for premium SN500 and $875/t for smaller quantities of SN150, basis CIF the West Coast of India.

Prices for imported Group I material discharging in the UAE have been confirmed at $915/t-$930 for SN150, $940/t-$955/t for SN500 and $1,220/t-$1,265/t for bright stock, all on a CIF or CFR basis ex Hamriyah, Fujairah and Jebel Ali ports. The latest cargoes were imported from Rayong, Thailand.

Russian base oils still arrive occasionally into Hamriyah, but the number of cargoes has decreased. Previous cargoes often split between the UAE and receivers in India, but Indian buyers have stopped taking Russian material. It is also worth noting that the base oil terminal at Limas, Turkey, is empty or low on material, suggesting that Russian base oils may not be flowing as much as in the past, for whatever reason.

The latest prices in Hamriyah for Russian base oils were heard during March and were around $785/t for SN150 and $795/t for SN500. These prices apply to material discharged into storage in the port.

Group III cargoes are loading out of Al Ruwais, UAE, and Ras Laffan, Qatar, bound for India, Europe, and the U.S., but a shipment from the UAE to Europe has been delayed. The appointed distributor in Europe for the producer, Bapco, is not currently in a position to offer material to satellite buyers, for example in the U.K.

Netbacks for Group III base oils from Al Ruwais are unchanged at $1,120/t-$1,155/t for 4, 6 and 8 cSt grades. Netbacks for gas-to-liquids Group III+ oils loading ex Ras Laffan are unchanged at $1,155/t-$1,220/t, though these are given on an indication basis since the supplier’s cargo economics and cost allocation are not disclosed. Large cargoes moving into the U.S., Thailand and Singapore.

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

There does not appear to be any record of a large cargo making its way to Europe, but perhaps this will be announced during May or June.

Group II base oils are increasingly being used by lubricant blenders in the UAE, and are being regularly imported from the Red Sea, the U.S., South Korea and Singapore. These oils are either resold ex tank in the UAE or on a truck-delivered basis in the UAE and Oman. Some larger buyers have their own storage where they receive cargoes or partial cargo quantities for their own in-house blending.

Prices for these Group II oils are unchanged at $1,425/t-$1,475/t for 110N, 150N and 220N and at $1,510/t-$1,555/t for 600N, on an FCA basis. The base oils 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 the ranges refer to RTW deliveries to buyers in locations in the UAE and northern Oman.

Group III base oils from Al Ruwais and Sitra, Bahrain, are frequently bridged by small vessels, or in the case of Abu Dhabi by road tanker, into storage in Sharjah and Dubai. Based on consultation with local resellers in Sharjah, prices are around $1,325/t for 4 cSt, $1,340/t for 6 cSt and $1,385/t for 8 cSt, all on an FCA basis ex Hamriyah or on a delivered basis around the UAE and Oman, which incurs an RTW delivery charge of $20/t-$55/t. Selling prices from producers were not disclosed, so a reseller margin covering storage costs and profit is included in the FCA levels.

Africa

There is no recent on a large cargo discussed here previously for South Africa. It is assumed to be on the high seas en route to Durban.

An ExxonMobil cargo for three ports in West Africa loaded ex Fawley, U.K. The discharge ports are Conakry, Guinea; Abidjan, Ivory Coast; and Tema, Ghana.

The Nigerian market is stocked with high specification base oils imported from the U.S. Gulf of Mexico and Atlantic coasts. There will be no need for further cargoes moving into Lagos’ Apapa port for at least the next few months because there is now almost 30,000 tons in tank to be sold. Availability from those locations and FOB prices will dictate when the next large cargo is procured.

The rainy season is not far off, and it may be that some traders will wait until after the end of that season, which would mean no cargoes arriving before late August or September.

Some blenders are keen to buy U.S. material, but are unhappy with the ex tank prices being offered, since they are always comparing prices with Russian material which is lower in every aspect.

Russian base oils from Baltic and Egypt are offered from two traders, both at extremely low prices. Higher viscosity base stocks from Russia could be offered to Nigerian buyers, taking the place of SN900, but with potential compatibility issues and blending problems, these base stocks may not be an option.

The Nigerian naira’s official exchange rate dollars was NGN 1,604 Monday, almost identical to a week earlier.

Nigerian prices for U.S. base oils are unchanged at $965/t-$980/t for SN150, $990/t-$1,010/t for SN500 and $1,080/t for SN900, all on a CFR basis ex Apapa.

Prices for Russian base oils imported from Russia or Egypt are indicated at $895/t for SN150, $910/t for SN500 and $985/t for SN900, basis CFR ex Apapa.