The outcome of the deal will become apparent over the next few months, affecting sectors such as automotive and luxury goods, and will rate the EU on a higher tariff base than the U.K. which will ‘enjoy’ an across board tariff of 10% on all goods except steel and aluminium, which are currently subject to 25% tariffs, but which may be negotiated during the next few days according to Mr Trump on Monday this week.

The effects of increased import duties on vehicles will affect the lubricant industry, with a lower number of cars and vehicle parts being imported into the U.S. This will have far reaching effects in economies such as Germany and France, where a large proportion of exported automotive are produced. Lubricant factory fills will be reduced, requiring less base oils and additives to cover finished lubricants for these end uses.

The numerical downturn will be in process of calculation by the boffins in Brussels right now, and these forecast figures may make for some grim reading over the next few weeks, when the realisation of just what the outcomes of these tariffs will be.

A number of blenders contacted during last week and worked on a worst case, a middle ground case , and a best case scenario to plan for the remainder of this year and also into the future. The reactions to a 15% levy have been mixed with some players calling it a result, whilst others are more pessimistic, adopting a view that in the long run, this may have serious negative vibes for the European export markets.

One thing is for certain, the U.S. Treasury will be a major beneficiary, with millions of dollars being added to receipts. Longer term effects such as inflation and a downturn in trade for U.S. importers may also evolve over the coming months, should import levels hold up. Time will tell.

From a geopolitical standpoint, two important factors have come out from Mr Trump’s ‘golfing vacation’ in Scotland. The first is a new ultimatum to Putin, whereby he has been given 10-12 days to come up with a peace solution in the war with Ukraine. Trump announced this time limit on Monday this week. The second political item is the situation in Gaza, where the U.S. has said that it will take action to set up feeding stations and improve aid supplies.

These may not directly seem important to base oil trading and prices, but the Russian/Ukraine scenario could impact crude and product prices, with a possibility of pushing base oil prices higher. The Middle East situation could affect supply chains, and may impinge on supplies of base oils and lubricants moving into the regions affected by the conflict between Israel and Iran and its proxies.

Across the European, Middle Eastern and African regions there is a general slowing in most base oil markets with the onset of the holiday season starting in August. Many blending operations in the regions are moving into shorter working times, with some actually closing for two to three weeks during August.

This year sees not only European blenders reacting to the August month, but operations in Middle East Gulf and Africa are also facing a slower period. The overall economic malaise is affecting all parts of the regions, with only a number of small pockets of activity where base oil trade is booming.

Such activity can be witnessed in areas such as Eastern Europe, North Africa and Turkey, where base oil markets are progressive and busy at the moment. Sources have suggested that a number of buyers are trying to lay in stocks for a post holiday demand spike, which some are predicting for September and October, prior to European, Middle Eastern and African base oil markets pausing before the winter period.

Crude oil levels are showing as steady with little upward or downward moves over the past seven days. Levels appear the remarking time at the moment with no major drivers or influencers appearing in the markets. Levels remain just below, $70 per barrel., in respect of dated deliveries of Brent crude futures.

dated deliveries of Brent crude oil currently posts at $69.85 per barrel, in respect of September front month. West Texas Intermediate crude has a price at a level of $66.55 per barrel,. West Texas Intermediate crude has now moved to September front month.

The crack between the two marker crudes remains narrow at around $3 per barrel.

European LSGO prices are relatively stable, but are showing a little weaker than previous, with a price of $710 per metric ton, in respect of August front month.

Late prices were taken from London ICE on Monday 28th July 2025.

Europe

European Group I base oil demand has dropped off almost altogether, as many players prepare for holidays and a break from what has been a rather tumultuous seven months since the beginning of this year. Prices have softened a little as each week goes by, with lower numbers appearing from sellers.

Sellers are looking towards the end of Q3 for demand to return, but many have commented that this forecast is more in hope than reality. U.S. tariffs should not have a large impact on Group I base oils, since most the automotive slate has upgraded to using Group II and Group III grades, although there are some blenders who still remain committed to using Group I base oils.

From the U.S., the arbitrage remains open to move Group I cargoes to Europe, but with local production running back on track following a number of seasonal turnarounds, imported cargoes may not be required unless traders see that there are margins to be made. This assumes that prices will remain approximately in the same ballpark as present, with no economic or geopolitical events causing spikes or troughs in values.

Saudi Arabian producers appear to be committed to setting up regular imports into Europe. This activity could add another supply chain dynamic to the European Group I market, where There are rumors afoot regarding the potential closure of a current Group I facility. No refinery has been mentioned, but there are those who consider that a Mediterranean unit may be next for closure. There are other thoughts around this story, with some players putting forward arguments for upgrading to Group II production rather than a complete closure.

Upgrading Group I production to API Group II is not a simple move and can be extremely costly and complicated, depending on other streams of products being run.

Crude and feedstock seem to have gravitated to relatively stable conditions, but with solvent neutral prices weakening, bright stock is the ‘star’ grade, remaining at a substantial price premium over diesel levels.

Prices FCA Rotterdam are taken lower, with SN500 at $1,025/t, and bright stock between $1525/t-$1,545/t. These prices refer to the relatively small remaining balance of an imported cargo from USAC.

Pan European euro numbers are again weaker, with SN150 between €800/t-€825/t, with SN500/600 remaining between €860/t-€900/t. There appears to be demand for heavier neutrals, just prior to the holiday period starting.

Bright stock is also a little weaker than previously recorded, but remains at a significant premium to heavy solvent neutral prices. Bright stock is in a range between €1,285/t-€1,330/t.

The euro has remained flat against the U.S. dollar, with an  exchange rate on Monday 28th July 2025 at $1.16105.

Group II base oil prices within Europe were taken lower in early July, with all sellers applying discounts for all customers. Prices were trimmed by €30/t-€50/t with an average of €42/t.

Europe still maintains higher Group II prices than other regions such as AsiaPac and U.S., encouraging suppliers from these regions to maintain imported quantities in what is perceived as a growing market within Europe.

Prices remain assessed at the ‘new’ levels, between €950/t-€995 in respect of 110N/150N. 220N prices are between €1,015/t-€1,045/t, with 600N in a range between €1,120/t-€1,150/t.

Prices are in respect of a wide range of Group II base oils, including European production, imports from U.S., Red Sea, and AsiaPac. Prices pertain to bulk imports, with smaller quantities sometimes purchased in flexies in containers.

The Group III market in Europe is steady on pricing, with numbers settling at around current levels.

Replenishment cargoes are confirmed with two Middle East Gulf cargoes expected to discharge in Antwerp-Rotterdam-Amsterdam between mid August and mid September.

Additionally, supplies from AsiaPac are also expected during August, with cargoes from Korea and Malaysia programd to hit the European market during around that time.

A replenishment in supplies may take the market temporarily longer, but with very low quantities arriving into Europe between May and June, These quantities arriving in August will merely fill orders which have been postponed and waiting for a number of weeks. Prices are called to maintain current levels, but if the market moves shorter, then there may be some scope for distributors to tweak numbers higher.

Partly-approved 4 centiStoke and 6 cSt material have prices remaining between €1,085/t-€1,095/t FCA Antwerp-Rotterdam-Amsterdam. These levels have been agreed between suppliers and customers for quantities of Group III base oils arriving during August.

8 cSt where available, is between €1,100/t-€1,125/t.

Partly-approved prices are based on FCA sales ex Antwerp-Rotterdam-Amsterdam/northwesternE

Re-refined Group III grades 4 centiStoke and 6 cSt levels are maintained with levels placed between $1,035/t-$1,075/t, basis FCA Germany.

Fully-approved Group III 4 centiStoke and 6 cSt prices were gradually rising, but levels have stabilised . Prices in respect of 4 centiStoke and 6 cSt are placed between €1,695/t-€1,725/t, with 8 cSt between €1,745/t-€1,760/t, all unchanged from last week.

Fully-approved prices are in respect of FCA sales ex hubs in Antwerp-Rotterdam-Amsterdam and northwestern Europe. Where product is sold on a delivered basis, a premium to cover transportation costs will ba added to the above prices.

Baltic and Black Seas

EU and other allied nations sanctions have started to bite on Russian deliveries of crude oil and petroleum products, specifically naphtha, jet zero and diesel. Sanctions are aimed where Russian crude oil has been refined into products which are being sold and imported into EU ( and other countries ) under certificates of origin showing only the country where the refining has taken place, and not the source of the crude oil used in the refining process.

Base oils would be also be included in banned products, but this report has conducted a short survey to establish where any base oils would be produced from Russian crude, and would then possibly be sold snd imported into allied countries.

The answer came back with zero imports of base oils being identified under potential imported refined products. Indian base oils are not being imported into European destinations, and the only base oil producer in Turkey changed crudes some time ago and no longer uses Urals crude oil.

The sanctions will seek to identify the source of the crude oil used in the production of petroleum products, including base oils, which, if Russian, will then be banned under the new sanctions of being imported into any of the 27 EU countries, along with Norway, and the the United Kingdom

The sanctions only seem to identify the actual products and not any subsequent processed material. For example, if finished lubricants were blended using Russian base oils and/or Russian additives in a country such as U.A.E. or Turkey, would they be banned by EU under the new sanctions?

The EU Commission in Brussels has been contacted to try to obtain a clear understanding of the situation, but no replies have yet been received either from emails or from telephone calls.

Recording and researching accurate Baltic prices for Russian export cargoes of Group I base oils has become impossible, but should cargoes be discharged in a Turkish or Nigerian port, CIF/CFR prices will be disclosed by customs or by shipping agents. Using estimated freight rates, ballpark FOB prices can be established.

Therefore, notional FOB prices ex St Petersburg in respect of Russian export barrels of SN150 and SN500 are indicated around $750/t-$775/t in respect of SN150, with SN500 estimated between $780/t-$795/t. This is information is gleaned from the latest cargo to discharge in Gebze, Turkey,.

Lubricant blenders in turkey seem to be on a number of missions to procure European quality Group I and Group II base oils from sources in Red Sea and also from the U.S.

U.S. barrels are scarce at the moment, and laying hands on a quantity which could make up a cargo which would be economically attractive may prove difficult to achieve. This transaction would probably involve traders, who would have the contacts in the U.S. to buy Group I base oils in quantity.

There are possibilities for smaller quantities being bought in flexies in containers, and these quantities may be available from European suppliers, who are unable to load sea-going cargoes.

A Turkish blender bought a quantity of two grades of Group I base oils from a Spanish producer.

SN600 was sold FOB at around $785/t, with bright stock at around $1055/t, suggesting that either spec or quality were not ideal. A trader may have acted as a go-between to be able to open an L/C for the cargo and charter the vessel.

Delivered prices in respect of Russian base oils from Rosneft and Bashneft are reported higher this week, at $910/t in respect of SN150, with SN500 around $925/t. Prices are CIF/CFR Gebze, Turkey,.

Tupras Group I base oils ex Izmir refinery remain indicated as previous:

Spindle Oil -Tl 35,436/t, plus duty Tl 8,984/t

SN150 -Tl 31,872/t, plus duty Tl 8,271/t

SN500 -Tl 35,004/t, plus duty Tl 8,898/t

Bright stock -Tl 53,306/t plus duty Tl 12,558/t

Prices are basis ex rack Izmir refinery, plus a standard loading charge of Tl 8,199.20/t.

Turkish traders are again offering Group II base oils on an ex-works basis. Light vis grades are Russian origin with levels at $1,100/t in respect of 110N and 220N, along with 350N which is priced higher at $1,275/t. Whether this latter grade is a blended product, or whether it comes from another source is not disclosed.

Premium quality 500N is offered at $1,595/t with 150N at $1,275/t. These particular Group II grades may been imported from either Taiwan, or more likely, Saudi Arabia.

Tatneft Group III 4 centiStoke is offered FCA at €1,295/t. ‘Other’ partly-approved grades were priced between €1,375/t-€1,400/t, but some sellers say that these grades are no longer available. The Tatneft barrels were openly being touted for sale into EU locations.

Fully-approved Group III grades ex Cartagena, Spain, are delivered into Gemlik in small quantities of between 800-1200 mt, with prices between €1,825/t-€1,855/t CIF.

Middle East

Houthi activity in the southern Red Sea has gone quiet with no reports of attacks on any vessel transiting the Bab-al-Mandeb Strait or the Gulf of Aden.

Perhaps the seizure of an Iranian cargo of arms has had some effect on Houthi commanders and their masters in Tehran.

Luberef from Yanbu refinery has been involved in cargoes of Group I and Group II material for European markets, and this trade is currently being assessed as a regular supply, with enquiries being made for storage rental on a term basis.

With S-Oil as part of the Saudi Aramco group, there is an advantage with their presence in Europe to expand operations for regular supplies of Group I and Group II base oils.

July has seen a surge in the number of cargoes moving into Middle East Gulf ports from Yanbu, Jeddah and U.S. sources, but AsiaPac supplies have dwindled during July, perhaps due to the market in that region starting to tighten in supply terms, and with prices a little firmer, closing the arbitrage to Middle East Gulf.

There has been a marked shift from Group I base oils to premium Group II grades, with local U.A.E. blenders adopting U.S. and European standards for finished lubricants, since a large proportion of the finished lubricants blended in U.A.E. are exported to markets in the Middle East and East Africa, where European and U.S. standards and specifications are increasingly required. 

Iran has stopped the loading of base oil cargoes from southern and western ports Bandar-e Emam Khomeyni (BIK) or BA.  Sources in India have confirmed that there are no Iranian offers for supplies of Group I base oils.

Additional news this week has confirmed that a British individual has been sanctioned by the U.K. for owning ‘shadow fleet’ vessels registered in a United Arab Emirates company. This individual was involved in bribing Iraqi government officials to provide documentation for Iranian crude oil which was blended with Iraqi crude to enable deliveries of sanctioned Iranian crude to be completed to third parties.

It is considered that base oils were also employed using a similar scam to export Iranian material to U.A.E. and India.

Iranian Group I prices were last heard in June at around $965/t in respect of SN500+, and $945/t for SN150. These prices are given as indications only.

Group I base oil prices delivered into U.A.E. ports basis CIF/CFR, are confirmed between $940/t-$965 in respect of SN150. SN500 is between $975/t-$995/t, with bright stock between $1,375/t-$1,400/t. These cargoes were purchased from traders based in the U.S. and Europe, some of whom have representation in U.A.E..

An interesting point in the latest prices is that the solvent neutral grades have increased in prices, whilst bright stock has prices reduced. The bright stock levels are still relatively high.

Group III cargoes are loading again from Abu Dhabi and Bahrain, with the latter moving back to full operational capability following an extended turnaround.

Group III base oil netbacks from Al Ruwais and Sitra maintain indications between $1,270/t-$1,300/t in respect of 4 centiStoke, 6 cSt and 8 cSt Group III grades. These levels reflect prices from producers to the various distributors buying on an FOB basis. These levels will remain in place until the new cargoes start to arrive into Antwerp-Rotterdam-Amsterdam from mid August onwards.

Netbacks in respect of Shell GTL Group III+ base oils loading ex Ras Laffan in Qatar, are estimated to be between $1,255/t-$1,290/t. Numbers are offered as indications only.

FOB netbacks are determined and calculated using distributors’ selling prices in known markets, less estimated marketing costs, margins, handling, storage and freight.

Group II base oils are imported into U.A.E. from Red Sea, U.S., South Korea, Europe and Singapore. Yanbu in the Red Sea controls a large percentage of Group II base oils moving into U.A.E.. These products are resold ex tank U.A.E., or on a truck delivered basis throughout U.A.E. and parts of Oman.

FCA prices remain unchanged, being assessed between $1,425/t-$1,475/t in respect of 110N, 150N and 220N, with 600N between $1,510/t-$1,555/t.

Base oils are priced either in U.A.E. dirhams, or in U.S. dollars. The U.A.E. currency being pegged to the U.S. dollar at AED 3.67 = $1

The highs of the ranges refer to RTW deliveries to buyers in U.A.E. and northern Oman.

Group III base oils are currently being sourced from Al Ruwais and Sitra, and are delivered into Sharjah in U.A.E., are being offered for resale by a distributor. Even with a short voyage such as from Al Ruwais to Sharjah, quantities are delivered by sea using a small vessel, which appears to be more economical.

Quantities are now available from both Adnoc and Bapco.

Prices are confirmed by the distributor in Sharjah. Levels in respect of 4 centiStoke are $1,375/t, 6 cSt at $1390/t, with 8 cSt at $1,400/t, all basis FCA Hamriyah, or plus an RTW charge of $20/t-$55/t to be added for delivered prices around U.A.E. and Oman. Group III base stocks may be offered in dirhams.

The prices above include a reseller margin of around $75/t to cover storage, handling and profit margin.

Africa

Another cargo of around 3,000 tons of bright stock has loaded, or is loading on a prompt basis from Yanbu sailing to Alexandria in Egypt to cover requirements under the EGPC contract.

Samir in Morocco are still in the market for a cargo of Group I base oils, SN150, SN500/600 and bright stock.

Supplies would typically be made from Spanish sources, but both suppliers in Spain may not have the required quantities of each grade to form a cargo. No more news has been heard regarding the possibilities for a cargo from Valencia or from Augusta in Sicily.

South Africa and East Africa

As this report is being written, yet another large composite cargo appears to be planned for Durban. This parcel would look to load sometime during August, with a possible arrival into Durban during October.

West Africa is quiet with little activity on deliveries of cargoes of base oils into the usual ports in Conakry, Cote d”Ivoire, Ghana and Nigeria.

In NIgeria base oil prices ex tank are still dropping to be able to move material out of tank. The rainy season is affecting all trade and business, causing internal transportation problems for goods and people moving around the country.

Nigerian buyers are looking for cargoes from sources in U.S. and also from Russian traders, either from Baltic ports or from transhipments through Egyptian ports from Turkey or Azov.

Nigerian buyers are being told that their price expectations are unrealistic and that presently no availabilities will be forthcoming from the U.S.

Receivers in Lagos are looking for low prices with can compare with Russian barrels which were delivered into Apapa, some months ago.

The markets have changed, and even with slightly weaker prices for Group I barrels in Europe, there is no way that export cargoes could be considered from any European source.

Receivers are also surprised that traders are not able to offer U.S. barrels at this time, but prices requested by buyers are far too low and cannot be considered as serious. Traders are not going to bother getting involved in trying to purchase material in good faith, which will be turned down point blank by buyers who are expecting prices between $100/t-$150/t lower than what is possible.

Levels being talked and requested are $900/t-$920/t in respect of SN500 and $1,000- $1,025/t for SN900, on the basis of CFR Apapa.

Levels are impossible to achieve, with FOB numbers probably above the ‘requested’ delivered numbers.

Current exchange rate for naira to dollars is 1530NGN = $1, identical to one week ago. This is the black market rate.

CFR Apapa prices in respect of the last USG cargo remain between $890/t-$910/t in respect of SN150, $920/t-$940/t for SN500, with SN900 at $1040/t-$1070/t.

Russian origin barrels of Group I base oils are indicated at $885/t in respect of SN150, $929/t for SN500, and SN900 at $995/t, all basis CFR Apapa.