EMEA Base Oil Price Report


Base oil prices across Europe, the Middle East and Africa remain weak with continuing pressure from a general oversupply affecting all sectors to varying degrees.

Group I numbers are under twofold pressures, one being plentiful availabilities of all grades. The other is that prices have been depressed to the point where refiners are considering whether or not to continue producing, at least at current levels. Rising crude and feedstock costs are squeezing margins, and sellers are unable to respond to raise prices due to generous availabilities.

Group II levels are responding to aggressive selling and also to small quantities of imports. With source production increases from suppliers in the U.S., prices may be starting to stabilize, though, with fewer markdowns being heard this week.

Group III base stocks are in full-fledged oversupply, with renewed availabilities coming out of sources resuming operations this month after maintenance turnarounds. Prices have therefore become vulnerable to sellers attempting to protect market shares that had already been hard fought to establish, while new or renewed supplies are exacerbating the situation.

Crude oil and feedstock values retracted the past few days after rising last week. Dated deliveries of Brent crude dipped to $72.35 per barrel yesterday for June front month settlement. West Texas Intermediate posted at $63.40/bbl, also for June front month. ICE LS gas oil has come off recent highs and gravitated to the same level as two weeks ago – $632 per metric ton, for May front month.

Prices were obtained from ICE London trading late Monday.


Group I export prices across Europe are again reported as stable, perhaps because they cannot be pitched any lower. Some sellers are trying to raise prices, calling for small upward moves to adjust to raw material cost increases, but this is a tough call as things stand, with availabilities still flush demand dull for European exports. There may be further problems ahead for producers in this market, since most of the turnarounds affecting API Group I plants in Europe are now completed, and output from these units is returning to normal levels.

Prices are maintained again this week with light solvent neutrals between $550 per ton and $575/t, SN500 at $575/t-$600/t and bright stock still at $745/t-$785/t. These levels refer to large cargo-sized parcels of Group I base oils sold on an FOB basis ex mainland European supply points, always subject to availability.

Trade within Europe is restrained by slow demand. Buyers now have multiple options for spot purchases, whereas previously most of local sales of Group I base oils were sold under monthly, quarterly or annual contracts. These sales were effected on a volume basis, with prices being agreed on an index-linked formula. Since the end of 2018, the practice of long-term contracts for Group I domestic supply appears to have waned, perhaps even disappeared altogether.

Following the Easter holidays, buyers returned to the market with revived aggression on pricing, which is being realized in the latest rounds of negotiations this week and which will effectively carry over into May.

Values have been discounted during the past few days, and with the idea that major buyers should be buying at numbers closer to export prices, the gap between export and domestic base oil prices has been, and continues to be eroded.

The differential between intra-regional and export pricing is reduced with the former being levied between 65/t-90/t higher than export selling prices, although there are specific cases where this delta is smaller.

Group II prices have been sandwiched between rising raw material costs in the form of feedstock increments and aggressive selling techniques from suppliers moving to establish market share in a tightly supplied market. The result has been that prices have stabilized or at least flattened out at current levels. Imported material is coming under pressure from increases in source markets that will ultimately impinge on local European sales of Group II.

Group II prices were unchanged this week with FCA levels for 100 neutral, 150N and 220N remaining $740/t-$850/t (655/t-755) and 500N and 600N at $770/t-$890/t (680/t-790). The ranges may be starting to narrow following a period when it was extremely wide due to the import of smaller quantities of products with fewer finished lubricant approvals from Far East and the United States. The ranges are still intact as of this report but may be altered over the course of the next week.

These prices apply to the full range of Group II grades, some supplied in flexitanks, and covering oils with full, partial and no slates of approvals.

The Group III position in Europe and apparently also on a global scale, is that an oversupply situation now exists for these grades, and with further production about to appear from Far Eastern sources, this market is poised for a problematic period of time. There are rumors of fully approved material being heavily discounted to achieve sales on a continuing basis into large buyers who are able to negotiate price down to new lows. Prices heard this week for these offers are approaching the selling prices for partly-approved Group III base oils.

Prices for of partly-approved Group III grades fell to 675/t-725/t for 4 centiStoke grades, with 6 and 8 cSt oils at 685/t-740/t, basis FCA ex hub locations in Northwestern Europe. Fully approved material has also started to feel the effects of the combination of slow demand and ample availability. Values fell to 800/t-870/t for 4 cSt, 820/t-885/t for 6 cSt and 810/t-875/t for 8 cSt, all on an FCA basis from Antwerp-Rotterdam-Amsterdam.

The prices above do not apply to material delivered in bulk cargoes to large or major buyers, which would be lower.

Baltic and Black Seas

Baltic trade remains dull with few cargo movements reported during the past week. There are one or two small parcels moving to Antwerp-Rotterdam-Amsterdam and one cargo programmed to deliver into the east coast of the United Kingdom, but generally trading is slow and prices flat.

There has been no confirmation of further traffic from Baltic supply sources into West Africa, although Nigerian receivers have suggested that markups in U.S. Gulf prices could bring Russian export grades and Polish bright stock back into play. There are also some supply issues with plant maintenance and some curtailment of supplies from regular refineries in Russia, and these events may help prop up prices.

Prices remain are mostly unchanged at $475/t-$500/t for SN150, $485/t-$520/t for SN500 and $760/t-$785/t for bright stock from Gdansk, Poland, all on an FOB basis.

Black Sea and Eastern Mediterranean markets are dominated by worsening economy in Turkey, which has destabilized the environment for transacting any meaningful business. The Turkish lira has been devaluing against the U.S. dollar the past few weeks since Turkish elections, causing imports of Group I cargoes from traditional Mediterranean sources to become extremely marginal.

This situation has been complicated by the extension of maintenance at the Izmir refinery, and while base oil stocks were laid down to take account of the turnaround period, further delay may mean tighter domestic supplies, which are purchased in local currency, deferring any risk to using imports.

Mediterranean sellers continue to be frustrated by this impasse as buyers in Turkey are hesitating to purchase cargoes, although two buyers made arrangements to take around 10,000 tons of Group I grades during May. Mediterranean offers are heard at around $548/t for SN150 and $574/t for SN500, basis CIF in Derince and Gebze.

Russian export grades ex Azov and Kavkaz, Russia, are priced on the same basis as previously and are assessed at $465/t-$485/t for smaller quantities SN150 and $480/t-$495/t for SN500. These quantities may be of more interest to buyers in Turkey, although some comment that lower specifications of these grades prevent them from being universally used in the Turkish market.

Middle East Gulf

Red Sea reports describe an inquiry for Aqaba, Jordan, that as yet is uncovered either from the Mediterranean or from Red Sea sources. A number of cargoes are primed for loading out of Yanbual Bahr and Jeddah, Saudi Arabia, for receivers in Oman, the United Arab Emirates and India.

One of the principle themes this week in Middle East Gulf circles is the announcement by the U.S. that the waivers for selected countries to import crude and petroleum products from Iran will not to be extended. How this will affect any oil exports to India is as yet unclear. Some pundits suggested that it will not make any difference to the current situation since few, if any, exports of Iranian base oils have been moving out of Bandar Bushehr and Bandar-e Emam Khomeyni over the past few months since the sanctions were initially imposed by the U.S. Other sources suggested that clandestine cargo movements will continue, perhaps with storage in U.A.E. being used as a bridging point where shipping documents can be amended to reflect product of U.A.E. origin.

Since the news re the sanctions, receivers in the U.A.E. are seriously examining cargo options from Black Sea sources, ex STS at Kavkaz, Russia, perhaps to replace any material that has found its way out of Iran. These supplies would be Russian Group I exports priced at $535/t for SN500, basis CIF delivered into the U.A.E.

Partly-approved Group III grades loaded out of Al Ruwais, U.A.E., and Sitra, Bahrain, reflect lower selling prices in destination markets are are assessed at $695/t-$735/t for 4, 6 and 8 cSt grades. The 8 cSt grades moving to India or the Far East carry lower FOB values due to local selling prices.

Group III oils ex Sitra carrying full slates of European OEM approvals are assessed at $855/t-$900/t for 4, 6 and 8 cSt delivered to European and U.S. markets.

Nominal FOB numbers are based on netback prices extracted from regional selling levels less marketing, handing and freight costs. FOB levels for Neste products will carry the same numbers as partly-approved material sold by Bapco, given that the physical product from Sitra refinery is one and the same, but Nexbase brand carries full approvals.

Group II prices in the Middle East Gulf are unchanged this week as oils sourced from the Far East and the U.S. and holding full global approvals, sold FCA ex U.A.E. hub storage, are at $875/t-$910/t for 100N, 150N and 220N, while 500N and 600N are at $885/t-$925/t.


North African buyers are looking to take a number of cargoes of Group I, Group II and Group III base oils on a co-loading basis from Mediterranean supply hubs. One player has suggested that all three types of base oil can be loaded ex one port in Spain, which would preserve the integrity of the material both from a quality and provenance angle. This would also avoid the higher shipping costs involved in two or three port loadings to accommodate all grades involved.

West Africa trade is slow at the moment with receivers in Cote d’Ivoire and Guinea still examining possibilities regarding further purchases of Group I base oils. Nigerian buyers are also considering cargoes from Baltic sources or the U.S. Gulf Coast, commenting that prices from both sources are now comparable. With Baltic supplies being considered, the timing may not be appropriate, since with tightening supply of Russian exports may prevent loading of a large parcel for Nigeria. However, the Baltic inquiry is still on the cards according to shipping sources.

With regard to Group I prices being offered and those being currently landed into Nigeria, numbers are maintained at $670/t-$680/t for SN150, $680/t-$690/t for SN500 and $900/t-$945/t for bright stock. SN900 is estimated to be between $700/t-$720/t. All prices are basis CIF/CFR Lagos.

The prices above refer to large cargoes of at least 10,000 tons in total, landed into Nigerian ports such as Apapa, Lagos.

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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