EMEA Base Oil Price Report


Base oil markets in Europe, the Middle East and Africa are finally showing what could be early signs of recovery from the COVID-19 pandemic. Demand remains far from normal levels, but trading levels do offer hope that better times are coming.

There have been tentative inquiries for all types of base oils, and with crude and feedstock prices rising, there have been some moves to lift prices from the extreme lows witnessed some weeks ago.

There still remains the latent threat of a second wave of infections, and in some regions this has been occurring where restrictions were perhaps lifted either too soon or too liberally. Awareness remains that the coronavirus has not gone away, at least until a vaccine is found.

Blending operations throughout Europe, Middle East and Africa have returned to a new form or working, with rules being put in place to protect employees and customers, and with advice being taken from national governments to safe working practices, business is returning.

Crude prices have firmed over the past two weeks with dated deliveries of Brent crude moving upwards to $41.35 per barrel, although this trend is open to adjustment with dated Brent crude falling below $40/bbl again at the end of last week.  This latest level is in respect of August front month settlement. West Texas Intermediate crude has also firmed with this crude showing at $39.00/bbl, now also for August front month. This level is some $3 higher than last seen two weeks back.

ICE LS gas oil prices have also moved higher to $348 per metric ton, $17 higher than previous. With more cars, vans and trucks returning to the roads, demand has improved for motor fuels, this trend probably continuing as more people return to work. Prices were obtained from London ICE trading late Monday.


European API Group I base oil export prices have shrugged off the woes of the past few months with prices firming in new offers for July liftings. The increases are not massive, but directionally take the market back to a position which is to be welcomed by producers who were finding difficulty in producing and selling base oils at extremely low contribution rates. With the reversal in this market hopes are that price levels will further strengthen over the weeks to come. Levels are still relatively low but with higher prices, margins have improved even although feedstock costs have also risen in the interim.

FOB prices in respect of SN150 are now assessed between $345 per ton and $375/t, moving up by some $10/t-$15/t, with SN500 also reacting to events by moving upwards to $360/t-$385/t. Bright stock is also see higher than previous levels and is placed between $390/t-$420/t, some $20/t higher than last. Demand for bright stock has improved with a number of export destinations looking for large parcels of this grade.

Turkey is still proving to a be a strong market for Group I base oils, since the restart of the Tupras refinery in Izmir has been put back to end July and perhaps even into August. With Turkish buyers now dependant on imported Group I base oils a number of cargoes have been arranged from Mediterranean sources, with further offers for July delivery significant in the market.

The above Group I export price levels refer to cargo sized (minimum 2,000 tons) parcels of Group I base oils, FOB ex mainland European supply points, always subject to availability.

Regional European Group I markets are moving again with expectations that manufacturing and process industries are restarting creating demand for finished products. The automotive sector is coming back with more and more vehicles on the roads and production of new cars restarted in major centers.

Prices for July are higher than previously seen with increases in line with export prices. Sellers are commenting that the days of rock-bottom prices are over, although this sector of the market did not descend into the dire economies of the export sales.

With increases to both local and export prices basically in line, the differential between domestic and export numbers remains assessed between €80/t-€155/t, regional prices being the higher.

Group II prices have stabilized and do not appear to have increases as yet. These prices did not experience a fall such as occurred with Group I levels, and therefore it probably reasonable that levels are unchanged from the last report. With rising raw material costs however, some producers are indicating that they may be looking for increases to selling prices from next month, going into August, if crude and feedstock prices continue to rise.

Demand is still relatively positive for Group II base oils, and with the return of industries to full-time working, the seen is set for a positive period prior to the summer recess which normally affects blending and purchasing of all base oils during August. It is not entirely clear as to what will happen this year with many blenders maintaining that they may continue to function during what is normally holiday time, playing catch-up for the time and business lost during the pandemic period.

An announcement is expected this week regarding the EU import tariff limits for the second half of 2020. There are conflicting reports as to what the outcome will be, with some sources stating that the quota limit will remain the same, whilst others are saying that it will be less, although imports statistics have been hugely affected by the coronavirus situation The limit is currently at 400,000 tons over six months for imported Group II grades being levy free, thereafter an import levy of 3.7% would apply. Clarification is being sought before the next issue of this report.

Prices are maintained at the moment, although as above some sellers may be seeking to raise prices over the next few weeks. Prices are between $610/t-$640/t (€560/t-€585) in respect of the two lighter vis grades (150N and 220N), with higher vis grades (500N and 600N) between $665/t-$690/t (€610/t-€630).

Prices still pertain to a wide range of Group II base oils, including European, and U.S. fully approved grades, but also unapproved or partly-approved grades from Middle East, Far East and the U.S.

Group III markets are picking up, and are seeing a rebound both from a price perspective and also from demand. The same picture is emerging here as with other types of base oils, that is with commercial and industrial activity at least returning in part to the European scene, demand has improved considerably for Group III base stocks.

With buying interest picking up, sellers are keen to re-establish prices back to former levels, this may be harder to achieve in this sector since there is still the prospect of an over-supply scenario evolving, although at the moment with the absence of replenishment stocks arriving into Europe from Far East an Middle East Gulf over the past few months, inventories are not currently long, with some distributors keen to receive replenishment material sooner rather than later.

Prices are moved higher with levels now between €650/t-€675/t in respect of the range of partly-approved Group III base oils. Numbers are ranging between €670/t-€680/t in respect of 6 cSt and 8 cSt base oils, with 4 centiStoke grades between €650/t-€660/t. Prices refer to FCA supplies ex northwestern European hubs.

Prices in respect of European OEM fully approved Group III base oils are also taken lower with levels between €685-/t-€735/t in respect of 4 centiStoke base oils, with 6 cSt and 8 cSt grades remaining between €690/t-€770/t. The wide variations and the low ends of the ranges are where some fully approved material has discounted prices, competing sometimes with partly-approved material.

Baltic and Black Sea

Base oil trading out of the Baltic remains quiet, although there are some talks of a return to some form of normality. Traders and distributors are looking to take material from a number of Russian refinery sources to rebuild inventory, following the passing of the main wave of the virus. However, Russian domestic markets are also awakening after the last few months, with demand returning.

Some refiners cut production runs to a minimum, and now find that demand is higher than anticipated some weeks ago. The result is that CPT offers for base oils are starting to rise, and with the support of mainland prices starting to firm throughout Europe, Baltic numbers may be more positive in weeks to come.

A couple of reported Russian cargoes are moving from Baltic sources, one moving into the east coast of the United Kingdom and the other into Antwerp-Rotterdam-Amsterdam. This may signal a return to operations in these markets, which have effectively been closed during the last three months.

Prices are tweaked slightly higher for July offers, with FOB prices for the two main grades SN150 and SN500 assessed, some $10/t-$20/t higher at $355/t-$385/t. SN150, SN500 and bright stock from Gdansk also are indicated higher, in line with mainland European levels at $345/t-$395/t for the solvent neutrals, with bright stock at $395/t-$425/t FOB.

Black Sea sourcing of Russian export material is still something of a problem. That’s because the delay in re-starting a unit at Volgograd refinery has impinged on some of the availabilities of base oils available for export to markets such as Turkey. One smaller parcel of 2,700 tons will load out of Kavkaz, Russia, next week for Israeli receivers, this confirming that the mother vessel and operations at Kavkaz, Russia, are still in business.

Prices from Kavkaz, Russia, are slightly higher, with STS levels at $325/t-$355/t in respect of SN500, with quantities of SN150 at $300/t-$325/t.

Turkish buyers remain in the market, with a number of cargoes confirmed for arrival into Izmit and Gebze, Turkey, from supply sources in Greece and Italy. Other offers for July arrival are on the table from Spain, Italy and Greece. The Tupras Izmir refinery remains closed and is now confirmed as not re-starting until August at the earliest. This means the local Turkish market is totally dependent on imported Group I base oils for the time being, although with the effects of COVID-19, the markets have not been so demanding as usual.

Price indications have hardened somewhat for July offers, reflecting the rising European FOB prices and are assessed at $415/t for SN150, with SN500 at $430/t basis CIF Marmaris in cargo lots of 2,500 tons-5,000 tons.  SN100 is priced at around $425/t CIF.

Group II and Group III base oils continue to be offered out of tank from Gebze, Turkey, with prices reportedly remaining unchanged at $610/t-$640/t for low and high vis Group II grades. Partly-approved Group III base oils were adjusted upwards to $640/t-$675/t.

Middle East

Red Sea reports are that a number of large cargoes are again lined up for Indian receivers, with another local supply arranged for two port discharge into Sudan and Jordan. One interesting movement is under consideration, according to a shipping source, for a parcel of 5,000 tons of bright stock to move from Yanbu’al Bahr to the U.S. Gulf. This movement is contradictory to the direction of normal trade with U.S. Gulf cargoes of Group I base stocks, including bright stock, moved to Middle East Gulf and the west coast of India. It may be considered that this is for an in-house trade.  Group II grades will be delivered into receiver’s storage in Le Havre, showing the versatility of this source when targeting sales of Group II base oils into an already crowded European market.

With no shipping inquiries for bright stock into Egyptian General Petroleum Corp. in Alexandria, there appears to be either a delay to awarding the next tender which was due to be issued for the third quarter. The effects of the coronavirus have perhaps muted the requirements for additional quantities of bright stock at this time.  

Middle East Gulf trade is gradually getting back into action, although many players from the regions are being extremely guarded about going back to work, until further steps are taken to maintain social distancing in offices. Plants are working with blending operations continuing in most of the centers, although there are reports that trade and business is flat at the moment, with demand being slow to recover. Many are commenting that it may be into September before some form of normality resumes in Middle East Gulf. Many of the key workers are missing from their stations being stranded in India, for example, where they cannot move.

Business is returning, however, albeit slowly, with no new offers or advice of base oil cargoes imported into Middle East Gulf. However, on the export side, an exceptionally large Iranian parcel was booked to load out of Bandar-e Emam Khomeyni, discharging into two of the west coast ports. This cargo of 12,000 tons of SN500 and SN150 loaded during the first part of June, this being the first noted cargo to be exported from Iran for some time. How this was accommodated into India is unknown since the quantity was discharged into smaller ports. The vessel was an internationally flagged ship, and will now be listed in the sanctions imposed by the U.S.

Based on local sources, FOB numbers for SN500 are expected to come out at $395/t-$425/t for the SN500, with SN150 at $390/t-$410/t.

Group III exports from Middle East Gulf appear to be recovering, with cargoes for Europe and China listed. A number of cargoes from Al Ruwais and Sitra are touted, although the Indian market appears to be still closed for imports of these grades.

Assumed netbacks for exported Group III base oils are moved slightly higher, producing levels at $510/t-$550/t for the partly-approved range of 4 centiStoke, 6 cSt and 8 cSt partly-approved Group III base oils. Group III base oils out of Sitra, which are branded Neste products, are also assessed higher this week and due to holding the full range of European approvals are assessed at $645/t-$695/t FOB for 4 cSt, 6 cSt, and 8 cSt Group III base oils.

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 supply from United Arab Emirates hub storage is building again.  The U.S. Gulf Coast cargo of Group II base stocks will arrive into the U.A.E. during this week, replenishing stocks for future sales and contract deliveries.

Prices are maintained, with indications on an FCA basis at $600/t-$690/t for light vis grades 100N, 150N and 220N, with 500N and 600N at $620/t-$700/t. These prices depend on quantities and contract terms and conditions. Partly approved Group III base oils ex-tank U.A.E., from Al Ruwais and Sitra, are at $655/t-$700/t for 4 cSt, 6 cSt and 8 cSt grades.


Mediterranean trade into North Africa has gone quiet again, with sources commenting that the coronavirus situation has seriously curtailed blending operations in countries such as Morocco and Tunisia. Egypt has also been badly affected, although the Group I refinery in Alexandria appears to be back producing base oils, showing an export from that source to U.A.E. of some 5,300 tons of mixed grades.

West Africa reports contain a wild card fixture of some 16,000 tons of base oils loaded in Korea and sold into Nigeria. This cargo is apparently on the high seas at the moment, and investigations are about to find the nature and reasoning behind this movement. It was suggested that this could be a Group II cargo, although quite why that product would be required in Nigeria is unclear. One producer in Korea had containment problems for base oils in refinery storage, and this may have been a fire-sale to move product quickly.

The large quantity of various base oils loaded out of Rotterdam and U.K. completed loading, and the vessel will deliver cargo lots of Group I base oils into Guinea, Cote d’Ivoire and Togo before continuing the voyage to Durban and finally to Dar-es-Salaam.

Another fixture shows a Swiss-based trader completed a cargo of 15,000 tons of three Group I grades from an Italian supplier for receivers in Nigeria. An interesting aspect is that another cargo of a similar size from the same source may follow in July, perhaps taking advantage of the low prices that have been around the Group I market over the past few weeks. 

Prices for API Group I base oils imported into Nigeria now are maintained for July arrivals, although cargoes arriving now may be some $30/t-$40/t higher than these latest numbers.

CFR/CIF levels are assessed at $465/t-$485/t for SN150, SN500 in a range of $480/t-$500/t, and bright stock, where applicable, at $520/t-$560/t. SN900 is indicated at $510/t-$525/t.

Prices are for cargoes of at least 10,000 tons delivered into 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.

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