EMEA Base Oil Price Report


As the holiday season nears an end, base oil markets around Europe, the Middle East and Africa are beginning to show signs of normal activity with a number of enquiries for export and domestic regional sales being pushed around the market.

The strike at a refinery in Northwestern Europe continues to affect the producer’s ability to offer for September cargoes and even local supplies have been curtailed. The producer is saying that they may not be able to offer base oils until October at the earliest, depending on when the strike ends.

Any temporary shortage of API Group I base oils from this unit has opened the door for supplies from other refineries and for traders to move export barrels into Northwestern Europe to cover requirements.

Despite the refinerys problems and a drivers strike in one Mediterranean region, the Group I markets remain balanced with good availability, although the lighter grades like solvent neutral 100 and SN150 may be tempered due to lower prices. This has encouraged producers to limit availability of these grades in favor of distillate production. SN500 and bright stock are freely available from nearly all suppliers with stable prices which may move upward from Sept. 1, although the fundamentals remain relatively low, allowing acceptable margins to be maintained.

Group II prices remain in the same ballpark as reported recently, with one or two reports of majors moving numbers lower to try to convince blenders to make the move from Group l. To some there is an unacceptable differential between the two types of base oil within the European markets and this may be favoring the retention of Group I base stocks as an option where possible.

European and Middle East Gulf Group III prices are varied, with some suppliers trying to move selling prices higher from September. Others are maintaining the existing levels and some are actually discounting their current levels to retain market share. Demand is forecast to surge in September with the return of most players from annual leave.

Crude oil and feedstocks have remained relatively static over the past few days, although at one point last week, there was a mini surge when dated deliveries of Brent crude moved back over the $60 per barrel mark. Since then, weaker sentiment has kept levels below this resistance point with dated deliveries of Brent crude now at a level of $59 per barrel for October.

West Texas Intermediate crude has followed a similar path, now reported at $53.25 per barrel, also for October front month settlement. ICE LS Gas Oil has maintained its value at $556 per metric ton for September front month, some $5 lower than last week’s level.

These prices were all obtained from ICE trading in London late Monday.


Group I export prices around Europe remain steady. SN150 remains at levels between $575/t-$598/t, with SN500 at $580/t-$605/t. Bright stock remains slightly weak but maintained at $675/t-$700/t. These levels refer to large cargo-sized parcels of Group I sold on an FOB basis ex mainland European supply points, always subject to availability.

Domestic markets within the European arena are starting to come back to normal after the summer layoff, but it may take until next week to see everything back in full flow. There are a number of enquires around for supplies going into September and onward, with some blending operations starting to discuss term deals for 2020.

With Brexit looming, the United Kingdom markets for Group I are busy with traders and blenders looking to stock enough products to maintain normal operations until December, when most see opportunities to take advantage of year-end selling when producers and traders look to reduce inventories.

Although prices have not significantly changed, the differential between domestic and export pricing has expanded with domestic levels now around 85/t-100/t higher than export prices.

Group II base oil prices are stable and still maintain a higher than desired premium over Group I. This differential is discouraging some blenders from making the transition to Group II, although a significant number have done so.

Far East and United States material continues to be offered by traders and producers. This material is being circulated around Mediterranean regions where prices may be higher than the main markets. The incidence of these incoming parcels is still small, but with prices which can be $30/t-$50/t lower than European major suppliers these availabilities are starting to make their mark.

European Group II prices remain unchanged with FCA levels at $720/t-$815/t (640/t-730/t) for the light viscosity grades (100N, 150N and 220N ), with the heavier 500N and 600N grades in a range at $750/t-$825/t (665/t-740/t).

These values pertain to all Group II base oils, including those with full slates of finished lubricant approvals and smaller imports in flexitanks from the Far East and the U.S.

Group III prices are becoming extremely variable with some producers deciding they want to hike numbers higher while other sellers are discounting to either protect existing market share or increase their customer base. The fully approved grades appear to be among those most likely to be applying increases, while some of the non-approved or partly approved products are being sold at exceptionally low prices.

Values being heard for Group III partly approved base oils are at 655/t-710/t for the 4 centiStoke grades with the 6 cSt and 8 cSt base oils at 660/t-720/t. These prices pertain to FCA sales ex hubs in Northwestern Europe. The lower ends of these ranges pertain to sales of Russian-produced 4 cSt base oils which are being sold into East Europe and Antwerp-Rotterdam-Amsterdam-Germany.

Fully approved Group III prices are now at 775/t-855/t for 4 cSt products with 6 cSt material at 865/t-915/t and 8 cSt grades at 785/t-865/t, FCA Antwerp-Rotterdam-Amsterdam.

Baltic and Black Sea

The lift for Baltic trade appears to be continuing, with more enquires for small and large cargoes to be loaded in early September for destinations in Antwerp-Rotterdam-Amsterdam, the U.K. and also Nigeria. With the imminent Brexit date of Oct. 31 there is ongoing interest from U.K. blenders and traders to lift larger than normal quantities of Group I Russian export base oils from Baltic suppliers prior to the deadline. There are no assumptions regarding free trade deals with EU supplying companies, although the majority of players around the U.K. market are not too concerned regarding the ongoing availabilities of base oils from the Baltic or any other EU origin suppliers.

There are reported enquires for Baltic cargoes to load for the east coast of the U.K. and another 5,000 tons for the west coast of India or United Arab Emirates, and one routine contract parcel of 3,500 tons has been delivered into Antwerp-Rotterdam-Amsterdam from Riga, Latvia.

Prices remain stable in the region with FOB levels for SN150 at $475/t-$500/t and SN500 at $485/t-$520/t. Bright stock loading ex Gdansk, Poland is reported maintained at $675/t-$695/t FOB.

Black Sea prices remain within their low ranges. Russian exports from the STS facility at Kavkaz, Russia, report a cargo of 4,000 tons being loaded for Turkish receivers in Gebze, much lower in price than from Mediterranean suppliers, or indeed, availabilities from the local supplier at Izmir refinery. More large cargoes are being negotiated on an FOB or CIF basis from Kavkaz, Russia, with expectations of material moving to the west coast of India, Rotterdam and Singapore. Prices for SN500 are at $454/t and SN150 at $437/t.

Greek and Italian sources have offered Group I material to Turkey with CIF prices indicated at $579/t for SN150 with SN500 at $584/t. SN600 is seen offered at $594/t, with bright stock indicated at $755/t CIF, but there have been few takers interested given the option to take Russian export material at what can be up to $100/t less on a delivered basis.

Group II and Group III base oils are being offered from the Spanish Mediterranean, Far East and U.S. in bulk in flexies, and are considered as an alternative to material available ex tank from traders and distributors representing majors and other international sellers.

Middle East Gulf

Reported activity from the Red Sea includes enquiries for cargoes to load off Yanbu, Saudi Arabia, and often Jeddah, Saudi Arabia, for receivers in India, and now a prompt cargo of 3,000 tons for receivers in Jordan.

No further Iranian Group I cargoes are reported this week after the two parcels which were identified last week. U.S. sanctions appear to be curbing exports of base oil and other petroleum products from Iranian ports. Base oil prices for Iranian SN500+ are currently indicated at around $565/t FOB, these being based on information received from sources in the U.A.E. and India.

Group III base oil prices ex Al Ruwais, United Arab Emirates, and Sitra, Bahrain, ports are maintained this week, with FOB price levels remaining at $685/t-$725/t for the three Group III viscosity grades of partly approved base oils. Eight cSt grades moving to India and China will achieve lower contribution levels due to lower local selling prices.

Sitra Group III marketed by Neste carry full slates of approvals and have higher netback levels. Notional FOB or netback levels are assessed for the range of fully approved grades at the same levels as last reported: $785/t-$895/t for 4 cSt, 6 cSt and 8 cSt grades delivered into European and U.S. markets.

Nominal FOB prices on a netback basis are based on prices derived from regional selling levels, less marketing, handling and freight costs.

Group II base oil prices are maintained for U.S. and Far East imports, plus with additional material now moving out of Yanbu for the Middle East Gulf. This material on a resale basis within Middle East Gulf markets has levels maintained with FCA ex U.A.E. hub storage in ranges at $775/t-$880/t for the light viscosity grades 100N, 150N and 220N with 500N and 600N at $785/t-$900/t.


Mediterranean and North African markets have reports of cargoes moving out of Spain, Italy and Portugal for Morocco, Algeria and Egypt. Bright stock cargoes are being arranged for Alexandria under the EGPC tender which has a further two cargoes to be supplied under the current contract. No further cargoes for Libya appear to have been undertaken by Greek suppliers.

South African shipping agents can confirm that a large cargo of some 10,000 tons of Group I and Group II base oils will load out of a major’s hub storage, and also a southern Italian refinery for delivery into Durban, for October.

In West Africa the enquiry for 3,000 tons of base oils to go into Port Gentil, Gabon, appears to have been taken off the radar. For a stand-alone cargo of this size to be delivered into Gabon would seem to be both expensive and difficult to find suitable tonnage to undertake.

Further to the news that two large parcels had been loaded on one vessel out of the U.S. Gulf Coast for Nigeria and Tema, Ghana, it has been suggested that the Ghanaian supply is not for the annual Tema contract, but has been arranged through private auspices. This is still to be confirmed.

Prices for Group I base oils being sold into Nigeria are maintained at $695/t-$720/t for SN150, SN500 at $695/t-$720/t and bright stock at $875/t-$910/t. SN900 is currently indicated at $715/t-$725/t.

These ranges cover all specifications of base oils including SN150 and SN500 requiring a guaranteed viscosity index of at least 95. All prices are on the basis of CIF/CFR Apapa, Lagos, and refer to cargoes of at least 10,000 tons landed into Nigerian ports.

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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