Some European traders have been looking to take material from the United States to cover demand for these grades, but sellers are unwilling to sell individual Group I grades, instead insisting that buyers take all grades within the category, which means traders ending up with light neutrals that are plentiful in Europe and hence difficult to sell.

A weaker dollar is also causing problems for exported base oils coming from the U.S. when sold in euros for example. This is one factor that could persuade importers to look for higher prices.

Prices for Russian export barrels of SN500 have been rising, but starting from an extremely lowly position they still do not approach levels for mainstream European Group I grades.

The clock is ticking on a 90-day reprieve for wide-ranging tariffs announced last month by U.S. President Donald Trump, and players in regions most affected – such as the European Union and the United Kingdom – are starting to become anxious about trade deals not yet being reached.

In the U.S., Trump’s popularity has slid and economists warn that tariffs could lead to inflation and a recession. The dollar’s exchange rate against the G7 basket of currencies has fallen to its lowest level in 16 years.

European finished lubricant blenders who specialize in particular segments, such as automotive, are bracing themselves for a major fall in demand should an announced 25% tariff on U.S. automobile exports take effect. Uncertainty is weighing on business as decisions on large base oil purchases remain firmly parked until the picture clears.

Last week’s power outage on the Iberian Peninsula has been blamed on problems caused by solar and wind power generation. Base oil plants in Cartagena and San Roque, Spain, shut down due to safety concerns. Shutting down a refinery is simpler than restarting, and it is unclear if operations have returned to normal.

A predicted drop in crude prices arrived as dated deliveries of Brent crude sank below $60 per barrel last week. After a brief recovery they again fell below that level Monday. Prices may keep falling as members of the OPEC+ cartel are accusing each other of cheating and selling quantities above agreed quotas.

The countries accused of this practice all depend heavily on crude sales to prop up their economies and runs on currencies and economic downturns if revenues fall. Russia could face increased economic pressure since it is relying heavily on oil profits to fund its war against Ukraine.

Prices for dated deliveries of Brent were at $59.70 per barrel Monday, now for July front month settlement, down around $6 over the past week. West Texas Intermediate fell around $5 to $56.65/bbl, still for June front month.

European low-sulfur gasoil values weakened to $580 per metric ton, still for May front month, down some $40/t from last week. All of these prices were obtained from London ICE trading at the close of May 5.

Europe

Uncertainty and the unknown remain uppermost in base oil buyer minds, with many companies declaring that they will not replenish inventories until the tariffs situation is clarified, which could happen in approximately 40 days. No guidance has come from Brussels or London regarding negotiations with the Trump administration.

Buyers have said that current availabilities of most Group I grades are ample, except for bright stock, and that there is no urgency to stock up. For now, many are procuring on an as-needed basis.

Maintenance will still go ahead at a number of refineries – some involving major turnarounds of up to six weeks, while others will be shorter.

FCA levels ex Rotterdam remain around $920/t for SN150 and $985/t for SN500, but bright stock values have climbed again to $1,520/t on increasing demand and tight availability.

Pan-European euro prices are in wide ranges of between €805/t and €885/t for SN150, €865/t-€945/t for SN500 and SN600 and €1,340/t-€1,455/t for bright stock. Final prices depend on quantity purchased, method of delivery, and availability.

The euro’s exchange rate to the dollar slipped the past week to $1.13307 Monday.

European demand for Group II base oils had dipped during March and April but now has resurged as many players look for extra quantities. The prospect of tariffs on auto exports to the U.S. looms, however. Automotive lubricants are a major and growing source of demand for premium base oils, and a drop in European and British auto production could badly affect Group II sales.

European Group II prices remain unchanged so far this month with two opposing drivers in action. On one hand producers are keen to hike prices due to healthy demand, but this is countered by lower crude and feedstock prices. The Group II premium to gas oil is at a a historic level.

Prices are assessed at €1,075/t-€1,110/t for 110 neutral and 150N, while 220N is at €1,125/t-€1,150/t and 600N at €1,155/t-€1,200/t. These prices apply to a wide range of Group II oils from Europe, the U.S., the Red Sea, and Asia-Pacific. For imports these ranges pertain to bulk shipments, but smaller quantities are being bought and transported in flexi-tanks.

Group III markets around Europe have tightened to the point that some sellers are imposing allocations on buyers and selling lower quantities than requested. A number of coincidental independent factors are behind the situation, which has caused shortages around European hubs and pushed up values.

There are shipping delays to replenishment cargoes from the Middle East Gulf and Asia-Pacific. A maintenance shutdown at the Group III refinery in Bahrain apparently is limiting availability to a European distributor of those oils, who in turn is unable to supply regular buyers. Spot cargoes that were purchased by traders on a tender basis are not available, so overall there is considerably less material in tank.

In addition, some refineries in Asia-Pacific are undergoing major maintenance programs. The oversupply situation that persisted for some time has ended.

Supplies of most Group III 4 centiStoke material were unavailable until replenishment cargoes arrive into Antwerp-Rotterdam-Amsterdam. Prices for Group III oils with partial slates of finished lubricant approvals will generally have firmed and are now assessed at €1,145/t-€1,175/t for 4 cSt, €1,155/t-€1,190/t for 6 cSt and €1,185/t-€1,200/t for 8 cSt, on an FCA basis ex Antwerp-Rotterdam-Amsterdam and Northwestern Europe.

Prices for Group III oils with full slates of approvals are assessed unchanged at €1,625/t-€1,695/t for 4 and 6 cSt and at €1,720/t-€1,745/t for 8 cSt, all on an FCA basis ex hubs in Antwerp-Rotterdam-Amsterdam, Northwestern Europe and Spain. These levels face upward pressure due to the tightening availability of oils with partial slates of approvals.

Prices for rerefined Group III grades have been lifted by the constraints on availabilities of virgin varieties and are now at €,1025/t-€1,080/t, on an FCA basis ex rerefinery in Germany.

Baltic and Black Seas

From other base oil reports, apparently Russian base oil prices have surged over the past couple of weeks, perhaps due to the unacceptable netbacks and contributions these products were generating. However, the starting point for increases is exceptionally low, since even if increases of $250/t-$300/t were applied these products would still be classed as low in price.

FOB prices ex St, Petersburg for the two main Russian grades are now estimated to lie around $565/t-$590/t in respect of SN150, with SN500 between $580/t-$610/t. If SN900 is required for Nigerian receivers, then this blended grade would be estimated at around $640/t, using Russian bright stock or SN1200 as a high-viscosity blend agent.

There appear to be fewer, if any cargoes moving out of the Baltic to Gebze, Turkey, and 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 over the past few months, for example on Lukoil’s refinery in Volgagrad, and these may have curbed availabilities. Perhaps producers are forced to move material around to cover domestic demand, which is rumored to be running high at this time.

Prices remain low when compared to European Group I levels, but Russian refineries use state-owned, low-priced Urals crude, have low labor costs and low refinery operating expenses. As usual, prices for FOB Russian export barrels are published as indications only.

Turkey reports lower quantities of Russian base oils being delivered into ports such as Gebze. Certainly less oil appears to be moving from the north, and even the Limas terminal does not appear to be accepting material from Volgagrad refinery.

Turkish traders still offer a blends of Russian and Uzbek base oils, priced at $745/t for SN150 and $765/t for SN500. SN900 that was part of a Nigerian inquiry was priced at $1,045/t. 

Russian delivered prices for the Group I grades are now reckoned to lie around $640/t for SN150 and $665/t for SN500, on a CIF or CFR basis Turkish ports such as Gebze.

Group I base oils are available ex Izmir refinery and priced 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. Prices are ex rack Izmir refinery and incur a standard loading charge of Tl 8,199.20/t.

Group II ex works prices from a Turkish trader are offered at $865/t for 110N and 220N and $1,110/t for 350N. The first two prices may refer to Russian Group II.

Higher specification Group II is offered at $1,500/t for 500N and $1,150/t for 150N, both imported from Taiwan.

Group III 4 cSt from Tatneft in Russia is offered at €1,025/t. Other partly-approved grades are at €1,240/t-€1,275/t for 4 and 6 cSt. Some of these grades have been supplied in flexies filled from storage in Rotterdam.

Fully-approved Group III grades ex Cartagena, Spain, are being delivered into Gemlik where prices are unchanged at €1,825/t-€1,855/t, basis FCA.

Middle East

Quantities of Group I and II oils shipped from Yanbu and Jeddah Saudi Arabia reportedly increased in April. Cargoes totaling 74,000 tons departed during the month for the West Coast of India and the United Arab Emirates. Cargoes of Group I and Group II are also moving from Yanbu to Europe, Egypt and Turkey.

Most Middle East countries have not been greatly impacted by tariffs since they faced levies of just 10% and do not send many products to the U.S.

Cargoes are often split between the west coast of India and U.A.E., maximising the quantities shipped to take advantage of the economies of scale, saving on freight rates and avoiding the need to use smaller vessels.

Group III base oils  have been exempted from U.S. tariffs, hence supplies from Middle East Gulf will proceed as normal with cargoes of these oils going into two distributors who buy the cargoes on an FOB basis, receiving the material into storage in the U.S. Gulf of Mexico coast and then delivering on a nationwide basis.

There are no cargo movements reported loading out of Bandar-e Emam Khomeyni, normally with Group I base oils from Sepahan Oil. FOB prices for Sepahan Group I SN150 and premium SN500 have to be competitive to compete with Indian produced Group I base oils, hence it was heard that Iranian prices had been discounted to make sales into regular receivers in Haldia and Mumbai.

Levels were heard at around $885/t for SN500 and $875/t for SN150, basis CIF the West Coast of India. With freight estimated at  around $45/t, FOB prices are looking to be exceptionally low.

CIF/CFR prices for imported Group I material discharging in U.A.E. are confirmed between $915/t-$930 in respect of SN150. SN500 is between $940/t-$955/t, with bright stock between $1,220/t-$1,265/t. Imported base oils are indicated basis CIF/CFR Hamriyah, Fujairah and Jebel Ali ports. Sources in respect of the Group I material include Rayong in Thailand.

Russian base oils are not arriving as often as previously, but one cargo arrived in March which discharged into Hamriyah port. The terminal at Limas in Turkey appears to be either low or empty, confirming that quantities of Russian base oils may not be flowing as profusely.

The last Russian base oil prices basis CFR Hamriyah port were last heard in March and were heard at around $785/t in respect of SN150 and $795/t for SN500.

Group III cargoes loading out of Al Ruwais and Ras Laffan bound for India, Europe, U.S.A. and Thailand, but there have been delays for a European cargo from U.A.E.. The appointed distributor for Bapco material in Europe, Stasco, is not currently able to offer material to buyers in the U.K.

Netbacks for Group III base oils from Al Ruwais are maintained, with Indications between $1,120/t-$1,155/t for 4, 6 and 8 cSt Group III grades.

Netbacks in respect of Shell GTL Group III+ base oils loading ex Ras Laffan, Qatar, are maintained at slightly higher levels, between $1,155/t-$1,220/t, with large cargoes moving into the U.S., Thailand and Singapore. Shell’s cargo economics and cost allocation are not disclosed.

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

Demand for Group II premium base oils is growing in the UAE, and these oils are being imported from Red Sea, U.S., South Korea and Singapore. The Group II base oils are either resold ex tank in the UAE, or on a truck-delivered basis in the UAE and Oman. FCA prices are maintained this week at $1,425/t-$1,475/t for 110N, 150N and 220N, with 600N at $1,510/t-$1,555/t. The highs of the ranges refer to RTW deliveries to buyers in locations in UAE and northern Oman.

Group III base oils from Al Ruwais and Sitra are bridged into the UAE either in small vessels, or from Abu Dhabi, by road tanker into storage in Sharjah and Dubai. Prices have been established from local resellers in Sharjah, with levels for 4 cSt at around $1,325/t, 6 cSt is pitched at $1,340/t, with 8 cSt at a premium at $1,385/t, all basis FCA Hamriyah, or plus RTW delivery charge of $20/t-$55/t added for delivered prices around the UAE and Oman. Selling prices from producers are not disclosed, so a reseller margin covering storage costs and profit is included in the FCA levels.

Prices from both Bahrain and U.A.E. were comparable and around similar levels.

Africa

The cargo from Greek sellers for a 3,500-ton cargo of Group I grades will not fly since the quantities are not available for export to Turkey. Smaller quantities of SN150 and SN600 may be offered in flexies for delivery into Gebze.

No updated news has been heard re the large cargo for South Africa. The cargo will be on the high seas en route to Durban.

The cargo for the three ports in West Africa loaded ex Fawley. The discharge ports are in Guinea, Cote d’Ivoire and Ghana.

The Nigerian market does not require further quantities of any base oils right now, with the premium material starting to move out of storage, taking a few months to move almost 30,000 tons of material.

The rainy season is just around the corner, 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.

A couple of traders who ave been active in Nigeria are not offering Russian barrels at the moment, reflecting the strange situation being heard elsewhere, that Russian base oils are in limited supply for whatever reason. However, there are still Russian barrels in tank in Apapa, with sellers sometimes struggling to move these qualities out of storage.

Some buyers in Nigeria continue to object re paying higher prices for quantities of U.S. sourced SN900, saying they may only take SN150 and SN500 in future, using SN500 as the highest viscosity grade.

Russian base oils from Baltic and Egypt were being offered from two traders but offers appear to have been withdrawn or are under review.

The current exchange rate for naira to dollars is quoted at NGN 1,594, slightly lower than one week ago. This is the official rate from the Central Bank of Nigeria.

CFR Apapa prices for U.S. sourced material remains previously advised, between $965/t-$980/t in respect of SN150, $990/t-$1,010/t for SN500, with SN900 at $1,080/t.

Russian base oils imported from Russia and Egypt are priced at $895/t for SN150, $910/t for SN500 and $985/t for SN900, all basis CFR Apapa. This report is trying to investigate why there may be delays in offers for further Russian base oil cargoes.

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.

Archived base oil price reports can be found through this link: https://www.lubesngreases.com/category/base-stocks/other/base-oil-pricing-report/

Historic and current base oil pricing data are available for purchase in Excel format.