EMEA Base Oil Price Report


Crude oil prices edged up a bit over the past few days, but European, Middle Eastern and African base oil markets will likely remain quiet until buyers and sellers return to their offices this week.

Surprisingly, crude oil levels moved upward by around $2 per barrel over the past few days, which is not insignificant. This miniature spike is mostly due to a raft of issues related to geopolitical unrest over North Korea. Dated deliveries of Brent crude is trading at around $66.30 per barrel for March front month settlement, with West Texas Intermediate crude posting at $60.10 per barrel for February. ICE LS Gas Oil is quoted higher by some $25 per metric ton at $600/t for January front month settlement, perhaps due to lower temperatures throughout Europe stimulating demand.


European API Group I export prices will likely remain stagnant, at least until players return to their desks and the possible effects of strengthening crude and feedstock prices kick in. Producers may start taking a hard look at increasing vacuum gas oil prices, for example, when determining base oil prices.

Light solvent neutrals such as SN150 remain at $695/t-$730/t, with the heavier SN500 and SN600 grades at $775/t-$795/t. Bright stock also remains unchanged in offers, at $855/t-$875/t.

The prices above refer to large, cargo-sized parcels of Group I base oils offered FOB ex mainland European supply points.

Local or domestic sales of Group I base oils throughout Europe are few and far between this week, with many blending operations either closed or operating on a reduced schedule. Prices remain unchanged. But if feedstock levels increase, ex-refinery gate increases will have to be passed on to end users sooner rather later. A couple of reseller sources did confirm this week that they might be looking to move prices higher in anticipation of being hit with higher numbers from suppliers further up the supply chain over the next few weeks.

The differential between FCA prices and spot export levels is 50/t-70/t.

Group II light vis products are $675/t-$695/t, with 500N and 600N between $835/t and $855/t. FCA or locally delivered prices from distributors are 785/t-815/t for light vis base oils and between 850/t and 885/t for higher vis grades.

The Group III base oil scene is quiet, with no announcements of new cargoes arriving into hubs in mainland Europe. Landed northwestern Europe levels remain at $795/t-$825/t CIF in respect of 4 centiStoke and 6 cSt grades. Local FCA sales remain between 695/t and 720/t FCA northwestern Europe. Group III grades carrying full European approvals on basis FCA Antwerp-Rotterdam-Amsterdam are still 790/t-825/t in respect of 4 cSt and 6 cSt grades, with 8 cSt material at a 765/t-785/t. The latter prices refer to ex-rack sales, or truck-delivered quantities, and do not include prices for material delivered in bulk to large end users such as oil majors and additive manufacturers.

Baltic and Black Sea

Most sources offices are closed this week, other than some operations staff overseeing the loading of a few cargoes moving out of storage prior to year-end. Most of these parcels are destined for Antwerp-Rotterdam-Amsterdam, Scandinavia and the United Kingdom. There also still seem to be enquires being floated for Baltic material to discharge into the west coast of India and Middle East Gulf.

FOB prices – established on the basis of delivered prices netted back – are assumed to have remained $675/t-$690/t for SN150 and between $735/t and $750/t for SN500. One source said last week, however, that levels may rise as a result of lower quantities of Russian export barrels coming through Baltic terminals. With demand still relatively high, this may cause rates to lift. Indication-only prices for SN900 are $775/t-$795/t, with bright stock between $880/t and $920/t.

Sources reported only a few local deals involving Turkish Group I imports from both Azov and also Mediterranean sources. Contracted supplies discharging into Derince from Greek sources have prices assessed on an indication-only basis at $745/t-$765/t for the light neutrals and $825/t-$840/t CIF for SN600.

Large parcels of Group III base oils are reportedly reaching Turkish receivers, and it can only be surmised that these cuts are being blended with local Group I supplies which can be purchased in local currency. That would be done to avoid exchange rate difficulties which may have been holding back Turkish markets due to poor rates between Turkish lira and U.S. dollars. Asked if these oils were being used for fuel dilution, sources stressed that no such practice exists in the Turkish base oil market.

Middle East Gulf

Many of the principal players in the Middle East Gulf region are on vacation. The U.S. Gulf-sourced Group I and Group II cargo offers apparently remain open, with validities on one closing Dec. 31 and another remaining on offer until Jan 7. Prices are not disclosed yet, but are considered to be competitive with notional supplies of mainly SN500 from Iran – which may be doubtful, due to production outages.

Offers for Group II material ex U.S. Gulf were also heard. One was for product with universal approvals and another with limited U.S. approvals. There is still no confirmation from the market as to when the Yanbu Group II operation is expected to fully come on stream.

Prices for the U.S. Gulf heavier neutrals offered are believed to be in the region of $800/t CIF Middle East Gulf. Traders appear to be hedging their bets as to where to place these parcels, as they are also offered (totally or partially) into the west coast of India. Iranian suppliers have not confirmed avails or prices after a request was issued to clarify the current scene. With Sepahan SN500+ forming the mainstay of exports from Iran, former prices of $785/t-$795/t FOB are considered to be unchanged.

Group III base oil exports are back on, with a number of 6,000- to 12,000-ton cargoes being assembled for loading out of Al Ruwais for the west coast of India, the Far East, the U.S., and Europe.

In addition, the same United Arab Emirates suppliers have been making inroads in East Africa markets, appointing a local company in Ethiopia to distribute Group III base oils on their behalf. Other less-publicized cargoes are moving out of Bahrain to contracted buyers and to in-house affiliates in Qatar.

Netback prices for Al Ruwais-sourced 4 cSt and 6 cSt Group III grades are maintained at $735/t-$765/t FOB. Bahrain-sourced Neste/Bapco base oils with approvals will netback $65/t-$90/t higher prices. No pricing information is available from Qatar sources.

Group II base stocks offered CIF Middle East Gulf ports have not been confirmed this week, but offers and deals have been completed at around $732/t in respect of 100N and at $893/t CIF Middle East Gulf for 600N. Levels for local U.A.E. sales of Group II base oils on FCA or delivered basis remain $840/t-$875/t for 100N,150N and 220N grades, with 500N and 600N between $955/t and $985/t.


East African and South African traders have reported that smaller quantities of Group I base oils are being sought for import into Durban and Mombasa. These will be arranged in flexies and may be shipped from the Baltic region; the Black Sea region; India; the Middle East Gulf; Indonesia; Thailand; the U.S., and more sources. Prices are still forthcoming.

Nigeria is quiet regarding new base oil imports, with few enquiries coming in to the traditional suppliers in the Baltic, mainland Europe and U.S. Price indications remain at $825/t-$845/t in respect of SN150. SN500 prices are still $865/t-$890/t and bright stock is being firmly offered at $968/t in respect of material with a minimum viscosity index of 85 from the Baltic. Alternative, Mediterranean-sourced bright stock is indicated at $995/t-$1000/t in respect of material with VI of at least 95. In addition, Baltic SN900 is estimated at $944/t, based on notional FOB levels and the latest offers of this material into Apapa.

The prices above refer to quantities of API Group I base oils delivered CIF/CFR Apapa, Lagos, in minimum parcel sizes of 5,000 tons.

Ray Masson is director of Pumacrown Ltd., a trader and broker of petroleum products in London, U.K. Contact him directly atpumacrown@email.com.

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