Middle East producers of API Group III oils have been moving large quantities to Singapore, Thailand and the United States. Group III demand has also been high in other markets, such as India and Europe, and forecasts predict demand will rise further in 2026.

The main question is whether production from traditional suppliers can accommodate the expected demand spike. Additional capacity is on the way in Europe and the U.S. Shell’s new 300,000-ton Group III plant in Germany is scheduled to be up and running by 2028, while Chevron intends an opening next year for a Group III upgrade at its plant in Pascagoula, U.S. The latter is expected to cater to the U.S. market and Europe. 

Luberef is also adding Group III capacity at its plant in Yanbu, Saudi Arabia, and has already stated that sister company S-Oil will distribute the output to Europe. This operation will be a logistical and economic improvement to cargoes coming to Europe from South Korea.

Group I cargoes still figure prominently in markets such as West Africa, and a build-up of inventories in Europe and the U.S. has benefitted Nigeria in particular as buyers have been able to re-stock from a number of sources.

Group I is still respected in European base oil markets and shows only marginal signs of losing demand volume to more premium base oils. These grades also form a large part of the Middle East blending slate and should continue doing so for some time to come.

Group II is gathering pace throughout Europe, the Middle East and Africa as many operations that traditionally depended on Group I are making a noticeable transition to Group II. This has been clearly evident in the United Arab Emirates, where there has been a dramatic increase in demand for premium base stocks.

Base oil prices are largely softer across the regions despite a couple of blips in supply economics. Crude oil prices rose following a spat between U.S. President Donald Trump and Russian President Vladimir Putin. Feedstock levels rose on the back of the mini crude spike, narrowing base oil premiums over distillates. This event has been superseded by crude falling back to levels of around one month ago.

Many expect prices for most base oils to remain under downward pressure from one factor or another in 2026, with Group III oils being a possible exception.

The one remaining fly in the ointment that is the market is the continuing risk to shipping base oils through the Suez Canal and Red Sea. Houthi militants in Yemen have declared they will maintain their aggressive stance toward Israel and its allies in spite of the cease fire in Gaza. This is still causing many ships to detour around the southern tip of Africa, adding expense and time to shipments between Asia-Pacific and the Middle East Gulf on one hand and the U.S. and Europe on the other.

Crude and Gas Oil Prices

Crude prices softened further during the past week, dipping back to levels seen four weeks ago, before the mini-spike in prices caused by the breakdown in relations between Trump and Putin. U.S. sanctions specifically against Lukoil and Rosneft have caused ripples across Russia, building pressure on Putin from inside Russia but also from China and India.

Dated deliveries of Brent crude: $63.45/bbl, January front month
West Texas Intermediate: $59.55/bbl, December front month
European low-sulfur gas oil: $749 per metric ton, November front month
Source: London ICE late Nov. 10

It is worth noting that low-sulfur gas oil breached $800/t last week, indicating the potential for petroleum prices to react to shortfalls in production and availability.

Europe

Inventories seem to have returned closer to equilibrium – close enough to avoid big sell-offs of stocks, at least for now. Producers have not been selling large quantities into the export market, but it would appear that domestic demand has been healthy. Amidst a couple supply interruptions, a more balanced supply-demand scene is evolving.

The fire at Mol’s refinery in Szozhalombatta, Hungary, led the company to declare force majeure for base oil deliveries to customers. The company is searching for Group I availabilities to help cover the shortfall and is having a certain degree of success. A number of Eastern bloc and Northern European suppliers have stepped in to assist wherever possible.

The latest news is that it could take months to undo the disruption.

Prices around Europe are relatively stable after a number of discounting episodes the past few months. The recent run-up in crode costs may have contributed, and Group I values could feel upward pressure if crude rises again. Perception is everything when it comes to Group I base oil prices.

Bright stock remains in relatively short supply and continues to carry a large premium over light and heavy solvent neutrals. Prices are maintained this week, following downward adjustments at the end of October.

Group I
European Exports, FOB basis
SN150: $685/t-$720/t
SN500: $745/t-$855/t
Bright stock 150: $1,175/t-$1,200/t

Northwestern Europe, FCA basis, Antwerp-Rotterdam-Amsterdam
SN150: $820/t-$845/t
SN500: $895/t-$935/t
Bright stock 150: $1,275/t-$1,340/t

Eastern Europe,  FCA
No prices advised due to on-going unavailability of products

Pan-European, FOB/FCA basis
SN150: €685/t-€725/t
SN500/600: €765/t-€810/t
Bright stock 150: €1,120/t-€1,155/t

Pan-European prices are assessed on an aggregate basis from levels in Poland, Hungary, France, Germany, Benelux, Iberia, Italy, Greece and the United Kingdom.

The euro’s exchange rate with the U.S. dollar was at $1.15523 Monday.

European Group II prices remain under pressure, mainly because of the hefty premium these grades hold over Group II values in other areas, such as the U.S. and Asia-Pacific. There is also an argument that the Group II price differential versus Group I is high and that a rebalancing of the relative pricing is overdue.

Hurricane Melissa apparently caused no negative impacts on base oil supply in the United States, although some Caribbean islands suffered immense damage. Group II prices are unchanged after reductions last week.

Group II, FCA basis
110N: €875/t-€890/t
150N: €890/t
220N: €890/t-€905/t
600N: €990/t-€1,055/t

The above prices refer to U.S. imports, while a European producer showed “posted” prices as follows:
150N: €975/t
600N: €1,125/t

These numbers above are subject to selective discounts, depending on buyer reputation and purchase quantities involved. The prices refer to a wide range of Group II base oils that can be sourced from within Europe, the U.S., the Red Sea and Asia-Pacific. Ranges refer to bulk shipments. Smaller quantities are being imported in flexi-tanks.

Group III base oils are seeing good demand, with little signs of lower offtakes during November and December, confusing the pundits who always call the market slower toward the year end. The main activity between distributors and customers is setting quantities for lifting during next year, against which distributors will revert to producers or their suppliers to establish size and frequency of incoming cargoes for 2026.

Most distributing parties in European are in a position to make contracted arrangements for next year, although one source is reporting that supply interruptions are possible. The reason for this is not clear. Some observers suggested some cargoes might be diverted to other destinations where prices are higher, or where lower freight rates allow more flexibility on selling prices.

Increasing production will be crucial to the European Group III market, with additional barrels coming in from Saudi Arabia and the U.S., whilst additional European production will be forthcoming from Shell’s refinery conversion in Germany. Shell is repurposing its Wesseling, Germany, refinery to make Group III base oils. Construction is already underway, and operations are expected to start in the second half of this decade. The project involves converting the site’s hydrocracker after ceasing crude oil processing earlier this year. 

Group III

Grades with partial slates of finished lubricant approvals, FCA Antwerp-Rotterdam-Amsterdam and Northwestern Europe
4 and 6 cSt: €1,165/t-€1,190/t (one distributor still offers €1,040/t)
8 cSt: €1,125/t-€1,145/t

Fully-approved, FCA hubs in Antwerp-Rotterdam-Amsterdam, Northwestern Europe, Spain
4 and 6 cSt: €1,610/t-€1,640/t
8 cSt: €1,665/t-€1,690/t

Products sold on a delivered basis are subject to transportation costs, which will be added to the prices above

Prices for rerefined Group III are unchanged at €885/t/t-€920/t for 4 and 6 cSt, basis FCA Germany.

Baltic Sea

There are reports that Russian SN500 prices have risen by $10/t in domestic markets. There was no mention of SN150 numbers, but it seems safe to assume that prices for that grade would also increase. There was also no mention of export prices. Actual levels were not divulged, but they can be assumed to have been exceptionally low, if prior export numbers can serve as a guide.

There are no reports of cargoes loading out of the Baltic. Perhaps U.S. sanctions on Lukoil and Rosneft are biting harder than expected on the banking sector, limiting the transfer of dollars between outside banks, such as those in United Arab Emirates and banks inside Russia.

Russian base oils remain available in some regions of the Baltic, with deliveries by road tank wagons coming from Russia and Belarus. Russian and Belarussian base oils being imported by blenders in the Baltic States is in strict breach of European Union sanctions.

U.S. sanctions against Lukoil and Rosneft cover crude oil and petroleum products, including base oils, but but it is not apparent how Russian base oils from the Baltic would be impacted since most go to Turkey and Nigeria.

Lukoil base oil cargoes came from the company’s Perm refinery, but again from rumors heard during last week, it would appear that all available petroleum products produced within Russian are being assigned to domestic markets rather than exports. There are reported queues at gasoline stations and shortages of diesel. This is thought to be as a result of a number of successful drone strikes on Russian refineries by Ukraine, causing damage to production units and storage terminals.

There are still rumors of Russian cargoes to be loaded out of the Baltic for Nigeria, with offers for Russian base oils being made during last week in Lagos. It is impossible to get a handle on quantities and prices for these parcels. There have been no reported cargoes loaded for Gebze, Turkey, hence notional prices on an FOB basis, have become even more aged and notional. Levels remain as published previously.

Notional prices Russian Group I exports, FOB St. Petersburg/Vyborg
SN150: $625/t-$655/t
SN500: $660/t-$685/t.

Black Sea & Turkey

No Russian base oil cargoes have been seen or reported going into Turkey, with local sources commenting that material is no longer available possibly being re-routed to Russian domestic customers experiencing supply chain interruptions due to Ukrainian drone strikes.

Drone strikes have been confirmed on refineries which are producing base oils, such as the Rosneft refinery at Novokuybyshevsk and the Bashneft refinery at Ufa. So far, Perm and Angarsk refineries appear to be operating normally, but there is confirmation that Volgagrad refinery in the south, owned and operated by Lukoil, had been hit during last week.

Rosneft’s last CIF/CFR price levels heard were at $590/t in respect of SN150, with SN500 at $655/t, but these are no longer valid, and are only indicated for interest.

Turkish base oil prices are given as indications only being maintained at historical levels, with no reported new or recent cargoes arriving from Rosneft, ex-tank prices are in respect of previous cargoes.

Group I

Lukoil, CIF/CFR Gebze (historical)
SN150: around $835/t
SN500: around $850/t

Rosneft and Bashneft, CIF/CFR Gebze (historical)
SN150: $590/t
SN500: $655/t

Tupras
Spindle oil: Tl 33,360.00/t plus VAT Tl 8,569.64/t
SN150: Tl 27,338.00/t plus VAT Tl 7,365.04/t
SN500: Tl 33,805.00/t plus VAT Tl 8,658.44/t
Bright stock: Tl 51,681.00/t plus VAT Tl 12,233.64/t

Sales incur a standard loading charge of Tl 9,487.20/t.

Group II, ex-works
110N and 220N, Russian origin: $975/t (last known price, from October, no availabilities presently)
350N, blended, or from alternative source: $1,135/t
150N, from Taiwan or Saudi Arabia: $1,020/t
500N/600N, from Taiwan or Saudi Arabia: $1,240/t

Group III
Partly-approved Tatneft 4cSt, FCA: €796/t
Fully-approved Group III from Spain, CIF Gemlik: €1,695/t-€1,725/t.

Middle East

The Luberef refinery in Yanbu is undergoing maintenance but UAE and Indian receivers continue to have base oil cargoes from Yanbu and Jeddah. Group III production in Yanbu will start during 2026 with shipping, distribution and sales within Europe coming under the control of S-Oil Corp, which is majority owned by Saudi Aramco.

Group I and Group II base oil arriving into UAE are slowing with only two base oil cargoes notified so far this months. One parcel arrived from Thailand, and the other is thought to have originated in South Korea, and would possibly be a Group II cargo.

Hamriyah port still experiences problems for bulk liquid cargoes, although with lower numbers of vessels arriving, the problem may soon sort itself out.

At the moment, European sellers cannot consider export cargoes to the UAE as cargo economics are stacked against voyages to that location because of high freight costs and longer voyage times going around the Cape of Good Hope. However the Greek cargo of 5,000 tons of heavy solvent neutral loaded from Aghio in Greece and sailed to receivers in India at an acceptable price level. How this parcel transited the Bab-al-Mandeb Strait is a mystery. It may have shipped by a vessel flagged acceptably to the Houthis.

UAE sources there have been few Iranian export cargoes loading from Bandar-e Emam Khomeyni, which consist of base oils from the Sepahan Oil refinery. Sources suggested Group I base oils are instead being delivered by road through Iraq into Syria as alternative markets where prices are higher.

Relatively large quantities of rubber process oil are being exported from Iran to Indian receivers in Mumbai anchorage or Haldia port.

Iran has its own Group II production but also importes Group II and Group III base oils through traders based in the UAE and India.

No Russian cargoes have arrived recently in the UAE, reinforcing that base oils produced in Russian refineries are being allocated to domestic markets.

Prices for base oils imported into the UAE are unchanged this week.

Group I, CIF/CFR UAE ports
SN150: $885/t-$920/t
SN500: $940/t-$965/t
Bright stock: $1,220/t-$1,245/t

Group I cargoes are purchased from traders based in the U.S. and Europe, some of whom have representation in UAE.

UAE Prices for Group II oils are reduced this week after news from more than one source indicating that numbers had fallen since the start of November.

Group II, FCA or RTW in the UAE and northern Oman
110N, 150N and 220N: $1,285/t-$1,325/t
600N: $1,395/t-$1,420/t

Group II base oils are imported into the UAE from a number of  sources in the Red Sea, the U.S., South Korea and Singapore. Deliveries are made through local distributors who purchase base oils directly from Luberef in Saudi Arabia, and from U.S. and Far East majors and traders. The high ends of the ranges refer to RTW deliveries.

UAE Group III prices are unchanged this week.

Group III, FCA or RTW in the UAE and northern Oman
4 cSt: $1,225/t
6 cSt: $1,235/t
8 cSt: $1,255/t

Middle East Gulf Group III base oils produced in Al Ruwais, UAE, and Sitra, Bahrain, and are delivered by sea into Hamriyah and Jebel Ali, UAE. These base oils are offered for resale through the appointed distributors. The ranges of Group III prices above include a reseller margin of around $90/t to cover storage, handling and margins. RTW deliveries from distributors can incur a further charge of between $20/t-$55/t, depending on delivery location and quantity.

Netbacks for Group III base oils loading ex Sitra and Al Ruwais for distributor sales in Europe, the U.S., India and China are unchanged at $1,045/t-$1,075/t for 4, 6 and 8 cSt Group III grades. Netback levels may indicate FOB prices.

Netbacks for gas-to-liquids Group III+ base oils ex Ras Laffan, Qatar, remain at $1,085/t-$1,100/t but are indications only since there are no distributors involved. There are a number of large cargoes reported leaving Qatar for Singapore, Rayong, Bangladesh, and ports along the U.S. Gulf of Mexico coast over the past couple of months.

Middle East Gulf Group III netbacks are assessed taking selling prices in known markets minus estimated marketing costs, margins, handling, storage and freight.

Africa

Supplies of Group I base oils have been effected from a Spanish supplier, and have been delivered into Casablanca/Mohammedia port in Morocco.

This report has been trying to track vessels that may be delivering base oils into Mombasa, Kenya, and Dar-es-Salaam, Tanzania, but with Houthi activity to the north around the Gulf of Aden, reporting is very sparse. It would appear that Dar-es_Salaam is now being supplied from Yanbu and Jeddah, whilst Mombasa is being supplied from Singapore. The refinery in Singapore is now fully operational, and vessels can be chartered to make stand-alone deliveries of base oils into Kenya. Previously, supplies into Mombasa were done on the back of vessels calling at Durban, but this practice appears to have changed.

There is still talk of Russian prices being offered into Nigeria, but it is uncertain if any Russian cargoes can be arranged under the current scenario in Russia. One trader was able to take Russian barrels from Turkey or from the Sea of Azov and bridge these base oils through an Egyptian port, but again it is unclear whether this traders can lay hands on cargo quantities at the moment. The last cargo done was during September.

Nigeria has reawakened with a number of base oil cargoes discharging during the past couple weeks. One 10,000-ton cargo has been purchased by a European trader from Phillips 66 ex the U.S. Gulf coast and should have been discharged last week. Another cargo has loaded out of the U.S. East Coast with another 10,000-ton parcel of SN150, SN500 and SN900, and a 6,000-ton cargo also loaded from another U.S. Gulf source. It is unknown whether the latter cargo has arrived in Lagos.

Lower FOB numbers have helped these imports compete with Russian bid prices. However, there are no longer spare barrels around the U.S. market, European supplies are out of the question and supplies from the Middle East are uneconomic at the moment. It is hard to see where any additional cargoes could be sourced from, although this market is constantly changing, and something will arise.

Offered numbers are at $925/t-$940/t for SN500 and $1,000/t-$1,120/t for SN900, all on a CFR basis Apapa.

The Nigerian naira black market exchange rate was NGN 1,435 Monday.

Group I, CFR Apapa

Russian origin (if available)
SN150: $860/t-$875/t
SN500: $885/t-$900/t
SN900: $1,060/t-$1,075/t

U.S. Origin
SN150: $970/t
SN500: $930/t
SN900: $1,100/t

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.