The reason many companies continue using Group I is down to the price differentials between those base oils and Group II. There can be a delta of some $300 per metric ton between oils of the same viscosity, but of course, Group II brings additional benefits in terms of oxidation stability, higher saturates and lower sulfur levels.

Group II base oils, being hydrotreated rather than solvent refined, bridge the gap between Group I and synthetic base stocks, allowing blenders to arrive at the parameters necessary to produce the latest generation of engine and industrial oils, for example. Group III adds yet another dimension to the slate, being severely hydrocracked and undergoing isomerization to produce superior purity (low sulfur, high saturates), excellent oxidation stability and a high viscosity index above 120, making them ideal for high-performance automotive and industrial lubricants whilst meeting strict emission standards. 

However, there still exists a place for all three types of base oils, although across Europe, the Middle East and African regions there is a noticeable and increasing move to premium base oils. This is becoming obvious in regions that have traditionally relied solely on Group I base stocks, such as in some Middle East Gulf and African markets where the move to premium grades of base oil are becoming most evident.

Global base oil prices are forecast to weaken during 2026, due in the main to an abundance of available products, causing regional surpluses and barrels looking for a home. Export markets are set to buzz, with producers and traders looking at all opportunities for open arbitrages to move cargoes into regions where demand may exist for various types of base stocks.

Presently, price pressures are being exerted on base oils other than Group III, where demand is extremely positive as buyers look to procure extra quantities wherever possible. In markets served mainly by imported material, quantities become allocated to existing or contract customers as soon as cargoes arrive. Such customers are willing to purchase on a forward basis, awaiting the next replenishment, when the exercise will be repeated.

Group III buyers tend to remain loyal to their suppliers, fearing they could be left empty-handed if a dearth of availability develops. This makes the Group III scene a sellers’ market, where although there exists a possibility for sellers to take advantage of this situation, with ever higher prices, this is not happening and business and trade are conducted on an “honourable” basis.

Prices for Group III oils with full slates of finished lubricant approvals are finally declining after a widening of differentials from oils with partial slates of approvals. Market share is being eroded for suppliers of oils with full slates, where blenders are able to utilize a combination of fully and partly approved Group III oils. This two-tier approach has been born out of necessity due to the large variation in prices. At one point the differential stood in excess of $600/t, but it has significantly contracted over the past year and now stands at around $300/t, with partly approved prices edging upwards, whilst at the same time fully approved prices have fallen.

Crude and Gas Oil Prices

Behind the front line of base oil prices, fundamentals remain stable and steady, with crude oil prices hovering around similar levels since the start of November last year. Feedstock levels have also remained in a narrow range over the same period, lending a stability to base oil production not seen for some time previously. Low-sulfur gas oil prices have flatlined for the past month.

Geopolitical developments are always around the corner and on the periphery of hydrocarbon industries, with base oil, whilst being a small part of the whole, playing an important part in total barrel economics.

Crude and gas oil prices
Dated deliveries of Brent crude: $63.45/bbl, March front month
West Texas Intermediate: $59.05/bbl, February front month
European low-sulfur gas oil: $621.00/t, January front month

Source: London ICE late, Jan. 12

Europe

Back to normal for base oil business, although sources and contacts around Europe have almost all voiced a boost for purchasing new quantities of Group I base oils, even against a backdrop of an undercurrent to move to Group II. Companies across Europe are looking to build, consolidate and even expand trade in existing and new markets. This requires new purchases of base oils to put the blending lines into action.

The start of the year around Europe has seen adverse weather conditions, restricting the movement of base oils and additives from production hubs in the main markets. Snowfalls have caused havoc for transportation with trucks and trains experiencing blocked roads and rail lines. Horrendous conditions were brought by a super storm in the form of  Goretti, with winds recorded at excess of 150 kilometers per hour across northern France and parts of the the United Kingdom.

Inland water transport suffered its fair share of problems in Europe as low canal water levels limited the loading of large quantities of base oils into barges. This situation is due to be reversed in the coming weeks, when large snow melts will flood canals and potentially raise water levels to such an extent that barges will be unable to pass beneath bridges.

Group I prices remain under pressure with large quantities of inventory having built over the holiday period at refinery storage points. Lower prices are emerging, but it will probably take a couple weeks to see where prices eventually settle. Suppliers have updated availabilities and price offers for January, February and March.

Bright stock remains tight, but prices are indicated lower by around $25/t-$40/t. Bright stock maintains a healthy premium over solvent neutral prices. Otherwise Group I prices in Europe are unchanged this week.

Group I

Exports from Europe, FOB
SN150: $625/t-$660/t
SN500: $695/t-$720/t
Bright stock 150: $1,100/t-$1,125/t

Northwestern Europe, FCA basis Antwerp-Rotterdam-Amsterdam
SN150: $775/t-$800/t
SN500: $855/t-$890/t
Bright stock 150: $1,225/t-$1,255/t

Eastern Europe,  FCA
SN150 : €764/t
SN500 : €820/t
Bright stock: €1,126/t

Mediterranean prices, FCA  (updated from “optimistic” Spanish supplier)
SN150: $815/t
SN600: $925/t
Bright stock: $1,310/t

Pan-European, FOB/FCA
SN150: €620/t-€665/t
SN500/600: €695/t-€740/t
Bright stock 150: €1,050/t-€1,075/t

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

The euro exchange rate with the U.S. dollar was at $1.16697 Monday.

Group II base oil prices remain around levels established just prior to Christmas. The levels became almost ‘established’ following the issuance of lower prices from one of the main suppliers. Levels are at $1,025/t for 150 neutral and $1,200/t for the heavier 600N.

The European Union duty element of 3.7% for Group II base stocks imported from countries without free trade agreements will be removed in another two weeks, from Jan. 28.

A major producer based in Europe loaded a large cargo of Group II grades during December, which was bound for Singapore. It is interesting to see that this cargo was supplied to an affiliate in that region, following the completion of new Group II production at Jurong refinery. There will have been good reason for this cargo, perhaps only loading one or two grades.

Demand appears positive as January unfolds and appears to be picking up faster than anticipated during the month. Buyers had run down inventories going prior to the holiday period and are currently looking to replenish stocks ahead of the spring oil change season. This will also be a time when industrial and commercial activity starts to increase and may precede a period of much needed growth across the major European economies.

Group II, FCA basis
110N: €800/t-€820pmt
150N: €810- €825/t
220N: €835/t-€845/t
600N: €965/t-€1,020/t

Prices apply 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.

Group III base oils show good demand, particularly for the 4 centiStoke grade. New cargoes have been arriving from the Middle East Gulf and Asia-Pacific during the holiday period, with stocks available for sale and delivery.

A cargo of Group III grades has loaded from Indonesia with destination notified as Antwerp-Rotterdam-Amsterdam. This will be the first such cargo reaching the European market and may arrive under the auspices of a European trader. It would be rather unlikely for the supplier, Pertamina, to become involved in the European arena on a direct basis.

Cargoes from Petronas in Malaysia do form part of the European Group III slate, but Indonesian material tends to be exported into China and other Asia-Pacific markets. The economics of the cargo are interesting, because freight costs will be elevated should the cargo make the detour around the Cape of Good Hope in South Africa, rather than risk transit through the Red Sea, where Houthi militants from Yemen still actively target merchant ships.

Group III prices, both for grades with partial and full slates of finished lubricant approvals, are unchanged again this week. in respect of partly-approved material, FCA remain unchanged this week. Sales of partially approved grades seem to have been gaining share of the Group III segment, which may motivate the lone current supplier of fully approved grades to halt the drift.

Group III

Partially approved, FCA Antwerp-Rotterdam-Amsterdam and Northwestern Europe
4 cSt: €1,165/t-€1,190/t
6 cSt: €1,135/t-€1,155/t
8 cSt: €1,125/t-€1,145/t

Fully approved, FCA Northwestern Europe
4 cSt: €1,610/t-€1,625/t
6 cSt: €1,595/t-€1,620/t
8 cSt: €1,585/t-€1,610/t

All Group III products sold on a delivered basis are subject to additional transportation charges.

Rerefined, FCA Germany
4 cSt:  €990/t
5 cSt: €990/t
6 cSt: €1050/t

Baltic Sea

The previously mentioned spurious report of a base oils cargo being loaded or about to be loaded out of St. Petersburg appears to be false. No vessel has been listed on any shipping reports, and with no cargoes moving out of Russia for export destinations the information seems to be untrue.

Available supplies of Russian base oils still are being utilized in the domestic market, following significant damage to production and storage facilities at a number of refineries around Russia.

The “phantom” Nigerian-bound cargo discussed here previously is not of Russian origin. The trader involved has a long history of taking Russian barrels through various ports and delivering into Apapa port in Lagos, but on this occasion no Russian barrels were available, and the cargo was sourced from the U.S. Gulf of Mexico Coast.

Group I

Exports, FOB St. Petersburg, Vyborg (notional as exports still seem unlikely)
SN150: $625/t-$655/t
SN500: $660/t-$685/t

Black Sea & Turkey

No Russian base oil cargoes have been discharged in Turkey. Traders who were involved with Russian base oils in the past have no availabilities currently offered. Historical Rosneft or Lukoil prices for the Turkish market will no longer be posted in this report since these numbers as no longer valid and are meaningless.

Prices in Turkey for Group I oils from local refiner Tupras appear unchanged this week.

Group I

Tupras
Spindle oil: Tl 32,090.00/t plus VAT Tl 8,315.44/t
SN150: Tl 27,764.00/t plus VAT Tl 7,450.24/t
SN500: Tl 34,443.00/t plus VAT Tl 8,786.04/t
Bright stock: Tl 51,258.00/t plus VAT Tl 12,149.04/t

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

Group II, ex-works through Turkish traders :
110N and 220N, no current availabilities
350N : no offers
150N, ex Taiwan or Saudi Arabia: $955/t
500N/600N, ex Taiwan or Saudi Arabia: $1,175/t

Group III

Partly approved, FCA
Tatneft 4 cSt: €933/t (availability in doubt)

Fully approved, from Cartagena, Spain, CIF Gemlik
€1,655/t-€1,680/t

Middle East

Employees at Saudi Aramco’s wholly owned Yanbu‘ Refinery completed a wide-ranging and complex total refinery shutdown on schedule and without any safety incidents. The work covered 320 pieces of equipment, 1,000 maintenance work orders and more than 30 projects. The refinery undergoes extensive maintenance every five years to ensure the safety, integrity and reliability of the facility. However, a previous shutdown that ended March 10, 2025 was more extensive than previous turnarounds.

Despite adverse weather and other issues, the shutdown was completed within the scheduled 38 days, due largely to advanced planning, organization and solid teamwork. Nearly 3,000 Saudi Aramco employees and contractors worked together to complete the task safely and on time. The turnaround is partly preparatory work for the introduction of production for Group III base oils.

Cargoes of around 18,000 tons-20,000 tons continued to load out of Yanbu and Jeddah, Saudi Arabia, for receivers in Mumbai anchorage and Jawaharlal Nehru Port during the turnaround, whille additional smaller cargoes of around 8,000 tons-10,000 tons moved Group I and Group II to receivers in the United Arab Emirates and Pakistan.

Cargoes are also being targeted at receivers in Singapore and Durban, South Africa. Three thousand tons of bright stock will load during January for Alexandria, Egypt, supplying under the EGPC contract. Parcels for receivers in Aqaba and Port Sudan, Sudan, are planned this month or early February.

Group I and Group II base oil cargoes have arrived in the UAE from the U.S., South Korea, Thailand and Indonesia, discharging into the ports of Fujairah and Hamriyah.

The region is again on tenterhooks regarding the latest civil strife in Iran, where large numbers of protesters are taking to the streets. Reports Monday indicated that more than 500 civilians have been killed so far during the protests. Governments are evaluating the situation, and U.S. President Donald Trump said he may intercede to help protect citizens.

Whilst this action is not directly related to base oil trade, suffice to say that no imports of base oil will be flowing into Iran at this time. Vessel owners are refusing to charter vessels to traders who had planned cargoes of Group II and Group III base oils to be delivered into Iranian receivers.

Iranian Group I base oil news was not forthcoming or available last week, so it is unclear if business continues or if all trade has been interrupted by the unrest. This report considers the latter to be the case.

Russian cargoes are no longer arriving into the UAE.  Turkish reports indicate the Limas terminal has been closed.

Prices in the UAE for Group I base oils fell again from a week ago.

Group I, CIF/CFR UAE ports
SN150: $870/t-$895/t
SN500: $920/t-$940/t

Group I cargoes are being sold by traders based in the U.S. and also traders based in Geneva, Switzerland, and also directly from producers in Thailand.

Prices are unchanged for Group II base oils offered on an FCA basis or on an RTW delivered basis UAE and Oman. 

Group II, FCA or RTW UAE and Oman
110N, 150N and 220N: $1,255/t-$1,300/t
600N: $1,365/t-$1,395/t

Group II base oils are being imported into the UAE and other Middle East Gulf ports in Qatar and Bahrain from a number of  sources, such as the Red Sea, the U.S., South Korea and Singapore, and are being resold FCA UAE or on a truck-delivered basis. The high ends of the ranges refer to material being delivered by RTW in U.A.E. and into Oman, north of Khorfakkan and Fujairah.

Prices rose slightly the past week for Group III oils sold on an FCA basis ex Hamriyah or Sharjah ports or delivered on an RTW basis in the UAE and Oman.

Group I

4 cSt: $1,240/t
6 cSt: $1,250/t
8 cSt: $1,265/t

The ranges of Group III prices above include a reseller margin of $95/t covering storage, handling, insurance and a margin. RTW deliveries from distributors can incur an additional charge of between $20/t-$55/t, depending on delivery location and quantity.

Group III base oils produced in Al Ruwais, UAE, and Sitra, Bahrain, are delivered in relatively small parcels of around 3,000 tons-4,000 tons by sea into Hamriyah and Jebel Ali.

Cargoes from those locations are also shipped to Europe, the U.S., India and China. Netbacks for these are maintained at $1,065/t-$1,085/t for 4, 6 and 8 cSt grades. Netbacks for gas-to-liquids Group III+ base oils ex Ras Laffan, Qatar, are raised to between $1,110/t-$1,135/t. Levels are given as indications only, since no distributors are involved in these cargoes, the product being mainly retained by Shell affiliates for in-house blending. Middle East Gulf Group III netbacks are assessed using selling prices in known markets, less estimated marketing costs, margins, handling, storage and freight.

There are reports of two large cargoes of around 25,000 tons each, loading out of Ras Laffan for receivers in the U.S. and Europe. The receivers will be the affiliates of Shell in both locations, the U.S. Gulf Coast and Hamburg.

Africa

A Spanish refiner has re-issued FCA/FOB prices but these are still very high numbers. It is almost as if the supplier does not want any buyers to bid for the available barrels. The supplier apparently does not have large quantities of each grade, but indications are for all grades, SN150, SN600 and bright stock 150.

The offered prices were perhaps a carrot for buyers in Morocco to open negotiations to purchase a cargo believed to be required into Mohammedia.

There is not much further news on the large base oil cargo that loaded out of Rotterdam and Fawley, U.K., for Durban. The cargo of around 19,000 tons of all types of base oil loaded in late December before sailing for South Africa.

The trader who specialized in procuring and delivering Russian cargoes into Apapa has a 10,000-ton cargo on the high seas with the origin now confirmed as the U.S. Gulf Coast, with additional quantities perhaps loaded from elsewhere on that coast or from the East Coast. The cargo is underway and will arrive in the next few days, if not already discharged.

The Nigerian base oil market is gaining pace with deliveries and sales ex tank in Apapa. The market will start to shorten in terms of availabilities over the coming couple of months, but receivers and buyers do not appear to be overly concerned.

Some traders have been bidding numbers to potential suppliers in the U.S. and also in Europe. The numbers are based on what would be necessary to achieve the bid prices from Nigerian buyers. No good news has been flowing back at the levels proposed from any of the sources in Europe or the U.S. Prices are being proposed by buyers that reflect the last Russian cargo to arrive in Apapa. Traders are commenting that it will be impossible to offer at the levels requested, assuming that Group I prices remain approximately where they are today. 

Bid levels are at $840/t for SN150, $900/t for SN500 and $1,060/t-$1,080/t for SN900. These numbers are impossible to reach given, taking FOB levels as they stand, then adding in freight and a margin to cover all eventualities such as demurrage or detentions.

A trader who had a 10,000-ton parcel delivered has been canvassing the market with low prices without having the back up of a physical cargo.

The larger cargo of around 18,000 tons is on the water for Nigeria.

There could be an impending potential shortage of SN900, which has a noticeable price differential over SN500, and at the higher prices, some receivers and a number of buyers/blenders are unwilling to purchase at those levels.

Bid numbers from buyers are being heard at really low levels of $825/t for SN150, $900/t for SN500 and $1,030/t for SN900, on a CFR basis ex Apapa.

The black market exchange rate for the Nigerian naira was NGN 1,427 to the dollar Monday.

Group I, CFR Apapa

Russian origin
SN150: $825/t
SN500: $895/t
SN900: $985/t

U.S. Origin
SN150: $840/t
SN500: $900/t
SN900: $1,060/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.

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