EMEA Base Oil Price Report


As if the coronavirus epidemic were not enough, an international dispute between two of the worlds biggest oil producers, Saudi Arabia and Russia, has triggered a price war and sent the price of crude spinning to its fastest fall since 1991.

Brent crude oil is down almost 50 percent this year and equity markets have tumbled across the globe. Monday saw one of its worst days since the Great Recession in 2008. Ironically the turmoil has come out of failed efforts to shore up the price by OPEC, which counts for around 30 percent of global production, and OPEC+.

Russia relies on oil and gas sales for around one-third of its gross domestic product and was keen to wait until the impact of the coronavirus became clearer. The Vienna talks broke up without agreement last Friday when the Russians snubbed a Saudi offer of cutting by 1.5 million barrels per day. The Saudis then stunned markets by slashing export prices 10 percent over the weekend.

Base oil markets are in a confused state right now. It is difficult to pinpoint exactly where prices will gravitate to, and when, but the base oil markets will take on a very different picture over the next few days.

Sellers and buyers dont knowing which way to turn or how to address the confusion. For the purposes of this report estimates of price movement have been implemented reflecting the percentage falls in crude and petroleum product prices. Various conversations with players in the market have thrown up wide and changing views on what is happening, and what will take place over the next few days.

The views range from denial, with some participants commenting that the markets will rebound and prices which were being talked last week will re-emerge in the next few days, to others saying that lower prices are here for some time, since with the advent of the coronavirus spread means little scope for swift recovery.

It is important to note that all base oil prices mentioned in the report are subject to revision and continual reassessment during this fractious time, with markets and participants unsure of responses and developments.

Crude prices have crashed to new lows with dated deliveries of Brent crude falling to below $33 per barrel in Monday morning trade. Prices have recovered a tad from that base and dated Brent now stands at $34.45 for May front month. West Texas Intermediate crude has also crumbled and is now at $31.00/bbl, still for April front month settlement. This is the smallest crack between the two marker crudes seen for some time, although with lower prices for both crudes this may be inevitable.

ICE LS Gas Oil has dropped drastically to a new level of $348 per metric ton, still for March front month settlement. This level is more than $100/t lower than last week. These prices were obtained from London ICE trading late Monday.


No one knows where European Group I export prices lie. These prices are proposed on a strictly temporary basis and may change radically during the course of this week. Prices are established in wide ranges since the reaction to events differs from one producer or seller to another.

Estimates for solvent neutral 150 are now put between $465/t-$585/t with SN500 at $475/t-$595/t. Bright stock is placed at $525/t-$675/t.

These levels refer to cargo-sized parcels of at least 2,000 tons, sold on an FOB basis from European supply points, always subject to availability.

European regional Group I prices have effectively not changed. It has been too early to gauge the effects to the local base oil markets.

The price differential between domestic prices and those applying to exports is not reported this week since any delta would be meaningless in today’s market.

The news other than prices crashing is that the Group II quota limits appear to have been reached.

Wide ranging assessments could now be at $595/t-$795/t (545/t-750) for the two lighter viscosity grades (150N and 220N), with higher viscosity grades (500N and 600N) between $675/t-$825/t (630/t-755).

It must be said that sources contacted for this report were unwilling to commit or comment regarding any movement on prices at this early stage. Changes may have to be made but any such price movements will evolve in time and will not be a knee jerk reaction to sudden and volatile movements in crude and feedstock values.

These prices apply to Group II oils with full slates of finished lubricant approvals as well as those with partial slates or no approvals.

Group III European markets are in the same boat as all the other base oil groups, with total confusion surrounding the markets. Existing stocks are being offered at prices which were seen last week, but even now, buyers have started asking for large discounts for purchases later this month.

Prices are actually maintained, since it is too early to establish the extent and rate of change to Group III values. Partly approved Group III base oils continue in a range at 715/t-725/t for 4 centiStoke grades, with 6 cSt and 8 cSt base oils at 720/t-730/t. Prices refer to FCA supplies ex northwestern European hubs.

Prices for European original equipment manufacturer fully approved Group III base oils are assessed at 760/t-825/t for 4 centiStoke base oils, with 6 cSt grades at 800/t-855/t and 8 cSt oils at 775/t-860/t.

Baltic and Black Sea

Baltic traders and resellers are carrying stocks in tanks which have been purchased some time back, at what will now be perceived as high prices. The effects of Russian crude and feedstock prices falling will take some time to filter down through the base oil purchasing system and it may be some weeks before it starts to pressure prices to change. This is the story presented to the market late on Monday, although with prices collapsing on other products, it is clear that base oil prices will be under pressure to change sooner rather than later.

One cargo was fixed last week for Nigeria, a smaller 6,000 tons parcel that sailed last week. The larger cargo of around 15,000 tons is still under discussion, although it was heard that this was sold into Apapa, and that the only issue appeared to be the shipping fixture.

The enquiry for Angola remains in the shipping market. At the same time cargoes are loading for Antwerp-Rotterdam-Amsterdam, the United Kingdom and Scandinavia.

Early indications are that offers will be maintained at the moment at current levels. Awareness suggests pressure for weaker numbers may have to be shown to move existing stocks out of tank, making way for replacement inventory that will be in route by rail from refineries. Until some clarity emerges on future prices, levels in the Baltic are maintained. SN150 is put at around $525/t-$545/t with SN500 in the same range. SN150, SN500 and bright stock loading from Gdansk have pricing suspended at the moment, although previous indications were set at around $565/t-$595/t in respect of the neutrals, with bright stock between $645/t-$670/t FOB.

The 17,000 tons cargo out of the Kavkaz, Russia, STS facility has loaded and will discharge part-cargo in United Arab Emirates and the balance into Singapore. Possibly 7,000 tons will go into Hamriyah and the balance cargo of 10,000 tons will proceed to contract buyers in Singapore. The supply of this material is possibly taking the place of Iranian barrels which are not apparent around the market.

STS prices in respect of Russian export grades were assessed at around $460/t-$475/t in respect of SN500, with smaller parcels of SN150 at around $460/t. Offers to Turkish buyers in Marmara were indicated at around $530/t in respect of SN500, with SN150 at $520/t CIF, but it was heard that Turkish buyers asked for re-offers based on new raw material costs.

Mediterranean offers from Greek sellers were on the market last week at $620/t in respect of SN150 with SN500 at $625/t basis CIF Derince. SN600 is indicated at around $630/t.

Within Turkey Group II and Group III base oils were still offered last Friday on an ex-tank basis with selling levels indicated between $795/t-$825/t in respect of the low and high vis Group II grades, with partly-approved Group III base oils between $810/t-$845/t. These offers may now have changed, although no confirmation of any new prices was added this week.

Middle East Gulf

Red Sea shipping reports show a large number of significant cargoes of Group I and Group II base oils loading out of Yanbu and Jeddah for receivers in Egypt, Sudan and India. In excess of 75,000 tons of product could be loaded out of these ports during the latter part of February and March. Shipping enquiries for deliveries to Alexandria will take place during April, suggesting that the incumbent supplier for the Egyptian General Petroleum Corp. bright stock tender succeeded in retaining the supply for the second quarter, from April through the end of June. The tender again covered cargoes of 2,500 tons per month, with optional and additional cargoes to be nominated by buyers.

Black Sea barrels feature highly now for receivers in the U.A.E., suggesting that these supplies may take over from Iranian supplies, which were literally missing off the radar for some time. U.S. sanctions remain in place, curbing exports of base oils among other products and crude from this source.

Last week local sources in U.A.E. confirmed that small vessels are still bringing SN500 and SN150 into U.A.E. from Iranian ports.

Prices were aimed at around $565/t in respect of SN500, CFR U.A.E., but this week may put pressure on these price levels to change.

Group III base oil exports from Middle East Gulf sources in Al Ruwais and Sitra have notional FOB prices at the moment. FOB levels remain between $630/t-$675/t in respect of the partly-approved range of Group III base oils moving into Europe, U.S., India and Far East. Eight cSt grades that are sold into India and Far East have lower FOB prices due to discounted selling prices.

Nexbase branded Group III base oils exported from Sitra refinery in Bahrain, under the Neste banner, have higher FOB rates, with notional netbacks between $745/t-$810/t in respect of the three main Group III grades: 4 centiStoke, 6 cSt and 8 cSt.

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

Group II base oils are delivered in bulk to distributors in the U.A.E. The range of grades is then resold to smaller receivers and blenders throughout the Middle East Gulf regions. Group II grades price levels are indicated on an FCA basis out of U.A.E. hub storage between $785/t-$920/t in respect of the light vis grades 100N/150N/ 220N with 500N/600N between $810/t-$925/t. These prices are based on FOB numbers from Far East, Red Sea and U.S. Gulf, plus freight, storage and handling, and distributor overheads and margin.

Cross Mediterranean and intra Mediterranean trade has been is quiet over the last week, although cargoes were arranged for Mohammedia from Italy and Spain.


Nigerian buyers were in the market searching for future cargoes of Group I base oils from either traders sourcing from the Baltic, Italy or Antwerp-Rotterdam-Amsterdam. Alternative sources for Group I cargoes are U.S. Gulf or U.S. Atlantic Coast. With one 6,000 ton-parcel confirmed from the Baltic and other possibilities from Livorno and Rotterdam, this market was poised for a busy spell.

Early this week Nigerian buyers suspended enquiries for a time to re-assess where the Group I base oil market is heading. Buyers are holding back on making further decisions for Group I cargoes, expecting that crude and feedstock prices falling may pressure base oil numbers to start to weaken because of poorer demand and lower raw material costs. Some Nigerian receivers indicated they are prepared to wait until April or May before taking replenishment stocks into Apapa storage.

However, currently prices in respect of API Group I base oils being imported into Nigerian buyers are maintained at the moment. CFR/CIF levels remain between $645/t-$660/t in respect of SN150, SN500 between $650/t-$665/t, with bright stock between $745/t-$760/t. Blended SN900 is repeated between $670/t-$685/t.

Prices are in respect of cargoes of minimum 10,000 tons being delivered to Apapa port, Lagos, Nigeria.

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.

Historic and current base oil pricing data are available for purchase in Excel format.

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