In 2024, the United States was the largest export market for European Union vehicles. More than 750,000 EU-made passenger cars and light trucks were exported to the U.S. that year.

From a base oil perspective, potential limitations on vehicle manufacturing and exports would have a significant effect, leading to a downturn in demand for finished lubricants. Factory fills and routine servicing would decline, affecting not only European suppliers but also U.S. lube blenders that manufacture approved products for imported vehicles.

Many Europe-based blenders are lobbying representatives in Brussels to negotiate on the tariffs to avoid what some fear could be economic disaster for certain companies.

Immediate reactions have included scaling back procurement of base oils, which had been stored in inventories in preparation for the autumn resumption of trade following summer vacations.

Several sources contacted earlier this week indicated that if the 30% tariffs are implemented, base oil and additive demand could fall by an estimated 25%-30%. While some may view this as alarmist, the potential effects on base oil and lubricant supply chains across Europe and beyond are significant.

Outside Europe, in the Middle East Gulf, Taiwanese sellers are offering API Group I and Group II base oils to buyers. Local UAE sources report attractive prices and high-quality specifications that fit well into current supply plans. These offerings appear to result from traditional markets in mainland China becoming politically inaccessible to Taiwanese producers.

Many players in the Middle East Gulf market are preparing to leave the region for the summer, seeking cooler destinations and returning in September.

August is expected to be slower in the Middle East Gulf, where a seasonal decline in activity is typical.

African markets are preparing for spring and summer in the Southern Hemisphere. Base oil business is reported as active, with expectations of continued market growth heading into the fourth quarter. Large imported cargoes from Europe, the U.S. and Red Sea sources are arriving to meet rising demand for all types of base oil.

In West Africa, the rainy season is slowing business activity. The movement of goods and materials is challenging in some areas, delaying supplies needed to keep blending plants operating smoothly.

There has been a pause in base oil cargo arrivals in regions such as Ghana and Nigeria, with reports indicating these shipments likely will not resume until at least September.

Prices across these regions are generally weaker than they were a few months ago but have remained resilient under supply pressure and continued geopolitical tensions in Ukraine and the Middle East.

Prices have shown a slight downward trend, though movements have not been dramatic. Base oil margins remain favorable for producers. The premium over distillates, especially diesel, has narrowed, not because of weakening base oil prices but due to rising distillate prices in step with crude oil.

Crude and feedstock prices have steadied. Dated Brent crude posted at U.S.$70.10 per barrel, up about $1 from last week for the September front month. West Texas Intermediate was at $69.05/bbl, also about $1 higher, for the August front month.

European LSGO prices have stabilized, falling to $707/t for the August front month. This marker is down about $50/ton since last week.

These prices were recorded from London ICE on Monday, July 14, 2025.

Europe

A persistent problem affecting the delivery of Group I, Group II and Group III base oils is the continued lack of draft in European rivers such as the Rhine, one of the main delivery routes across the continent.

Barges are limited in capacity due to low water levels, with the Rhine dropping to 100 centimeters last week. When the Rhine reaches 80 cm, it becomes impossible for barges to operate upstream.

Industry leaders are working to find solutions to what may become a regular issue, as climate forecasts suggest these conditions could recur annually.

One idea under consideration involves the design of larger beam barges with shallower keels, capable of navigating lower drafts. However, these vessels have not yet been built and would require time and investment.

In the meantime, road and rail transportation are being used, but at higher cost.

Group I base oil prices are weaker, with softer numbers than at the beginning of July. Demand remains sluggish with only modest activity ahead of the summer recess.

With plant maintenance wrapping up in the United States, the arbitrage window remains open to move Group I cargoes to Europe. The main question is whether the European market can absorb the additional supply. Traders are considering shipments from U.S. sources but are cautious for two reasons: whether the prices will be competitive when the material lands in tanks, and whether European prices will fall further, rendering the imported cargo unsellable at a higher cost. There’s also concern over holding large volumes in storage during August, when the market typically slows.

Traders are currently weighing their options and evaluating the risks of importing U.S. material.

Saudi Arabian sellers are also exploring the possibility of exporting Group I base oils to Europe. If this proceeds, S-Oil, a partner company within Saudi Aramco, would likely manage the shipment and sales.

There has been little indication of increased demand, contrary to earlier forecasts in May. Any meaningful uptick is unlikely before late August. With prices relatively weak and stable, buyers are not inclined to stockpile Group I base oils that will remain unused until September.

The proposed U.S. tariffs have not spurred buyers to replenish inventories currently. How the situation develops will ultimately influence blenders’ actions in the coming months.

Crude and feedstock prices appear stable. Bright stock is the only grade maintaining a higher price level, with a notable premium over heavy neutrals and diesel.

Prices FCA Rotterdam are unchanged, with SN 500 at $1,035/t and bright stock offered between $1,545/t-$1,565/t. These figures reflect the remaining volumes from a U.S. Gulf Coast cargo.

Pan-European euro-denominated prices are steady after easing last week. SN 150 is quoted between €820/t-€855/t, and SN 500/600 is between €875-€920. Bright stock continues to carry a significant premium, ranging between €1,300-€1,355.

The euro weakened slightly against the dollar, with an exchange rate of $1:16810 on Monday, July 14, 2025.

European Group II base oil prices have been reduced, with all sellers discounting to customers. Price cuts range from €30-€50/t. Europe continues to maintain higher Group II prices compared to Asia-Pacific and the U.S.

Larger quantities of Group II base oils are selling at the lower end of the range. Prices are assessed between €950-€995 for 110N/150N. 220N is quoted between €1,015-€1,045, and 600N between €1,120-€1,150. These prices apply to a wide range of Group II base oils, including European production and imports from the U.S., Red Sea and Asia-Pacific. Prices refer to bulk cargoes, with smaller lots sold in flexitanks.

The European Group III market is currently stable, though there is growing uncertainty about how long supply shortages can continue. One Middle East Gulf cargo is expected in mid-August, but until then, the distributor is serving only contracted customers and offering no spot sales. Another Middle East Gulf source may send a cargo in September, but no vessels have yet been confirmed.

Partly approved 4 cSt and 6 cSt material, when available, remains priced between €1,085–€1,095 FCA ARA. 8 cSt is assessed between €1,100–€1,125. These figures reflect FCA sales from ARA/NWE locations.

The European Bapco distributor continues to supply contracted customers with restricted quantities. Suppliers from Asia-Pacific are still experiencing delays, with no confirmed shipments into ARA yet.

Re-refined Group III grades, 4 cSt and 6 cSt, remain unchanged, currently quoted between $1,035–$1,075 FCA Germany. Prices are reportedly under review.

Fully approved Group III 4 cSt and 6 cSt prices are gradually rising, possibly due to limited availability of partly approved material. Current prices are between €1,695–€1,725, with 8 cSt quoted between €1,745–€1,760. These prices are unchanged from last week and refer to FCA sales ex hubs in ARA, Northwest Europe and Spain.

Baltic and Black Seas

The “phantom” cargo that was reportedly loaded out of St. Petersburg and believed to be bound for Gebze may instead have sailed to a Syrian port, where Russian base oils are rumored to be arriving.

It remains unclear how a vessel could discharge base oil in Lattakia – assuming this is the destination port – as previous investigations found the infrastructure there unable to handle such deliveries. Reports indicated that Lattakia’s shore tanks and pipelines were damaged and out of service.

There may be alternative routes for supplying base oils into Syria, and further investigation is expected this week.

Accurately assessing Russian Group I base oil export prices from the Baltic remains difficult. However, if cargoes are offloading at Turkish ports, CIF values should be reported by customs or shipping agents. With estimated freight costs, approximate FOB levels can be derived.

Based on the last known delivery into Gebze, notional FOB prices ex-St. Petersburg are indicated at $750/t–$775/t for SN 150 and $780/t–$795 for SN 500.

Russian base oils continue to flow into Turkey, with most shipments originating from ports in the Sea of Azov. Volumes are lower than before, which may be explained by some supply being diverted to Syria.

At one point, Russian barrels flooded the Turkish market, but now traders and blenders are seeking alternative sources for low-cost Group I base oils.

One Turkish blender has reportedly purchased SN 600 and bright stock from a Spanish producer. The cargo was sold FOB at unusually low prices –$785/t for SN 600 and $1,055 for bright stock –suggesting possible off-spec material. A trader may have facilitated the transaction.

There are growing concerns about operational issues at Russian refineries. While many have recently undergone maintenance, rumors point to shortages of spare parts, which could be affecting base oil production.

Delivered prices for Rosneft and Bashneft Group I grades are reported higher, at $895/t for SN 150 and $900 for SN 500, CFR Turkish ports such as Gebze.

Group I base oils from Tupras’ Izmir refinery are indicated as follows: Spindle Oil – TL 35,436/t, plus duty of TL 8,984; SN150 – TL 31,872, plus duty of TL 8,271; SN 500 – TL 35,004, plus duty of TL 8,898; bright stock – TL 53,306, plus duty of TL 12,558. All prices are ex-rack Izmir refinery, with a standard loading fee of TL 8,199.20/t. Recent price reductions may indicate preparations for a sale tender involving a large cargo from Aliaga or another Marmara Sea port.

Turkish traders are offering Group II base oils on an ex-works basis. Lower-priced light-viscosity grades of Russian origin are indicated at $1,100/t for 110N and 220N. 350N is significantly higher at $1,275. “Western” quality 150N is quoted at $1,275, while 500N is offered at $1,595. These imports likely originate from Taiwan or Saudi Arabia.

Tatneft’s Group III 4 cSt is offered at €1,295/t. Other partly approved Group III grades are quoted between €1,375–€1,400, although some suppliers claim these are no longer available. This may be due to disruptions in replenishment shipments from the Middle East Gulf or Asia-Pacific, with vessels avoiding the Bab al-Mandab Strait due to Houthi threats.

Fully approved Group III grades from Cartagena, Spain, are being delivered into Gemlik in small parcels of 800-1,200 tons, with prices ranging from €1,825-€1,855 CIF.

Middle East Gulf

The Yanbu refinery continues to serve as a key source of Group I and II base oils for markets in the Middle East, India, and now destinations including South Africa, Singapore, and Thailand. Jeddah also contributes with Group I solvent neutrals, though it does not produce bright stock.

Yanbu has also been involved in dispatching Group I and Group II cargoes to Europe, but this appears to be on a trial basis, as no regular flow has been established. With S-Oil now under the Saudi Aramco umbrella, Luberf may leverage its European presence to expand the supply of Group II base oils into those markets.

Cargoes destined for India and the UAE continue to transit the Bab al-Mandab Strait without disruption, delivering base oils into ports such as Mumbai and Chennai in India, and Fujairah, Hamriyah, and Jebel Ali in the UAE. Pakistan is also receiving steady shipments, as demand there for premium Group II grades appears to be rising.

There has been no major update from Yemen following hostile Houthi activity reported about ten days ago. However, sources suggest that allied forces are preparing coordinated action aimed at neutralizing Houthi firepower in the region.

Group I and II import prices into the MEG appear to be holding up, although pressure is building on Group I grades, likely due to weakening demand in favor of higher-specification Group II grades.

Blenders in the region are increasingly aligning with U.S. and European standards for finished lubricants, moving away from older formulations designed for less developed markets. This shift reflects growing investment in modern blending facilities across the Gulf.

Iranian sellers appear to have halted base oil exports from southern and western ports such as Bandar Imam Khomeini (BIK) and Bandar Abbas (BA). Indian contacts report no new offers of Iranian Group I grades. This may reflect reduced necessity, as Indian refineries increase domestic production using low-cost Russian crude.

The last known Iranian prices, reported in early June, indicated SN 500+ at $965/t and SN 150 at $945/t. These are now considered outdated and non-binding.

Group I base oils delivered into UAE ports are assessed CIF/CFR as follows: SN 150 – $925/t–$955/t; SN 500 – $965/t–$985/t; bright stock – $1,395/t–$1,425/t. These cargoes are primarily supplied by traders operating out of the U.S. and Europe, some of whom maintain offices in the UAE.

Russian-origin base oils have resurfaced, with one confirmed cargo recently arriving in Hamriyah. Another shipment – loaded from the Limas terminal in Turkey – is expected to discharge in Hamriyah and Fujairah by month’s end. The total volume is estimated between 6,000-10,000 tons, although grades remain unconfirmed.

Group III supply is ramping up from Abu Dhabi and Bahrain. The latter is reportedly back to full production following an extended maintenance turnaround.

Netbacks for Group III base oils from Al Ruwais are indicated at $1,270/t–$1,300/t for 4 cSt, 6 cSt and 8 cSt grades. These levels likely reflect FOB producer prices to regional distributors. With market values in Europe and India rising, further improvement in netbacks is anticipated.

Shell GTL Group III+ base oils from Ras Laffan in Qatar are still indicated at $1,255-$1,290/t FOB. These numbers are estimated using distributor sales prices in various markets, less typical marketing, storage, handling, and freight costs.

Group II imports into MEG ports originate from the Red Sea, U.S., South Korea, Europe, and Singapore. Red Sea supply accounts for a significant share of Group II base oils reaching UAE ports, sold either ex-tank or delivered by truck within the UAE and into northern Oman.

Adnoc’s Al Ruwais facility produces approximately 120,000-tons of Group II base oils annually, though most of this output is used for in-house blending, with only limited volumes available for domestic resale.

FCA prices for Group II base oils are stable at $1,425/t–$1,475/t for 110N, 150N and 220N and at $1,510/t–$1,555/t for 600N. Despite some pressure to reduce prices, suppliers are maintaining current levels for now. Prices are quoted in either U.S. dollars or UAE dirhams (pegged at AED 3.67 = $1). Higher range values typically include RTW (Road-To-Wheel) delivery within the UAE and northern Oman.

Group III base oils from Al Ruwais and Sitra (Bahrain) delivered into Sharjah are available for resale by regional distributors. Recent supply from Bahrain has been limited but is now increasing, with a few cargoes marked for UAE delivery.

Sharjah-based distributors confirm the following FCA prices (Hamriyah), including reseller margins: $1,360/t for 4 cSt, $1,375/t for 6 cSt and $1,390/t for 8 cSt. An RTW charge of $20–$55/t applies for delivery across the UAE and into Oman. Some prices may be quoted in dirhams. The figures include an estimated reseller margin of $75/t to cover storage, handling, and profit.

Africa

Cargoes of bright stock continue to arrive in Alexandria, Egypt, to fulfill requirements under the EGPC contract, currently held by Luberef in Saudi Arabia. Shipments of approximately 3,000–3,500-tons are regularly dispatched from Yanbu.

In Morocco, Samir is reportedly in the market for Group I base oils, specifically SN 150, SN 500/600, and bright stock. Availability of all three grades is essential to support local blending operations. While there have been discussions around transitioning to Group II base oils, the current formulations remain best suited to a Group I slate.

These supplies typically come from Spanish sources, although in previous years, barrels of solvent neutrals have also been sourced from Livorno and Aghio.

A vessel loaded with around 18,600 tons of various base oils and a small quantity of chemicals —possibly PAO (Group IV) — has departed from Rotterdam and Fawley. The cargo is expected to discharge in Durban, South Africa. It remains unclear how the supplier plans to serve the East African market, particularly Mombasa. A potential solution could involve sourcing a separate cargo of Group I and Group II base oils from Singapore.

Activity in West Africa has slowed with the arrival of the rainy season, which brings logistical complications and dampened demand. In Nigeria, buyers are actively seeking alternative supply sources, including the U.S. and Russia. Russian material is being shipped either directly from the Baltic or transshipped through Egypt, Turkey, or Azov.

U.S. availability remains tight. Suppliers are either coming out of refinery turnarounds or building inventory in anticipation of the Atlantic hurricane season, which could begin affecting supply chains within weeks. Europe is similarly constrained, lacking exportable volumes of Group I and even considering additional imports.

Traders report that it’s nearly impossible to offer “Western” barrels to Nigeria at present. Both FOB prices and freight rates are too high to make requested price levels viable. As a result, many sellers are refusing to quote unless Nigerian buyers adjust their price expectations.

Locally requested prices – reported at $900/t–$920/t for SN 500 and $1,000/t-$1,025/t for SN 900, CFR Apapa – are deemed unrealistic by traders. These levels are below current FOB costs, and with freight rates climbing, such pricing is unsustainable.

Bright stock prices remain firm, making SN 900 increasingly costly to blend. After the rainy season, SN 900 could face shortages, with higher prices likely—costs Nigerian buyers will need to absorb if they intend to continue including this grade in blends for resale to local lubricant manufacturers.

One vessel originally scheduled to deliver base oils to Apapa has reportedly diverted to Lome, Togo. It is unclear whether the cargo will discharge there, as Lome is not typically used for base oil imports.

The Central Bank of Nigeria’s official exchange rate currently stands at 1,528 NGN to $1, slightly stronger than the previous week.

CFR Apapa pricing for the last U.S. Gulf-sourced cargo is assessed as follows: $890/t–$910/t for SN150, $920/t–$940/t for SN500 and $1,040/t–$1,070/t for SN900.

Russian-origin Group I barrels are being offered at $885/t for SN150, $929/t for SN500 and $995/t for SN900, basis CFR Apapa.