EMEA Base Oil Price Report


Base oil markets – like the rest of the world – have been encouraged by preliminary results from trials for COVID-19 vaccines, and some insiders are expressing hopes that the industry may be past the worst effects of the pandemic.

For now, though, markets in almost every region continue to suffer to some extent, and in some places – the disease is the governing factor, for example in Iran and parts of sub-Sahara Africa. Turkey and Middle East areas such as Syria and Lebanon are also being affected.

Base oil prices have rallied on the back of rising crude and feedstock prices, with some players citing increasing demand for crude from major players such as China and India, where the pace of new COVID-19 cases has ebbed. Sources are expressing caution however, with evidence of third and fourth waves of the virus perhaps just around the corner.

Confidence is lacking in many markets, and operators are taking a short-term view, particularly when it comes to buying in large quantities of base oils for next year’s activities. Most blenders are playing a game of low inventories, although that is common as the end of the year approaches.

Crude oil costs rose markedly the past two weeks, and dated deliveries of Brent crude hit $47.50 per barrel Monday, around $10 higher than previously reported. This price was for January front month settlement. West Texas Intermediate crude reached $44.80/bbl, now also for January front month.

ICE LS gas oil prices rose by some $80 per metric ton, a not insignificant percentage rise, to reach $387 per metric ton still for December front month settlement. These prices were obtained from London ICE trading late Monday.


European prices for API Group I exports have risen sharply for a number of reasons. First, supply is extremely short because a lack of feedstock is limiting Group I production. Second, with crude and feedstock levels rising, base oils are starting to follow the curve. Demand in export markets has returned, replenishing stocks following a “COVID void” that developed in recent months.

There are few offers for significant quantities of material as many sources state that quantities of Group I grades, in particular bright stock, will not be available until after the new year, and in some cases not until February or even March.

Having said that, there have been a large number of cargoes fixed, many comprised of Group I base oils. These movements have tightened the supply scene further, with many producers hoisting the “sold out” sign, and quoting availabilities as above. 

Solvent neutral 150 has moved upwards to between $675 per ton and $710/t, and SN500 and SN600 rose to $690/t-$725/t. Bright stock remains extremely tight with indication-only prices heard for one offer at $765/t, yielding a range of $755/t-$780/t.

These prices refer to cargo-sized parcels of at least 2,000 tons of Group I base oils, sold on an FOB basis ex mainland European supply points, always subject to availability.

Prices for Group I sales within Europe are also firmer as markups were scheduled to take effect today, although many suppliers short of material and may not be able to offer additional or spot sales during December. This looks to be the picture for the first part of next year as well, with producers bemoaning that a shortage of vacuum gas oil is severely limiting base oil runs.

There are discussions going on regarding contracted supplies for next year, with considerable interest still being generated to take large quantities of Group I base oil, where there may have been a more concerted move to adopt Group II as the new workhorse base stock.

During the last report it was suggested that buyers were calling the tune in this sector of the European base oil scene, but this has turned around with sellers now sitting in the driving seat, raising prices and limiting supplies without question from the buying fraternity.

The differential between domestic and export prices is maintained between €35/t-€85/t, with both sets of prices rising in unison.

Group II prices have also firmed although perhaps not by as much as for Group l. Players sate that these prices were higher in the first place and do not have the flexibility to add the same increases as have been applied to Group I prices. Levels have firmed up by some €15/t-€25/t, but with sellers advocating that there could be further increments to come should raw material costs continue to rise. 

With the gap between Group I and Group II having started to narrow, there may come further pressure from producers of Group II base stocks to move numbers higher during December, since demand throughout Europe appears to be relatively healthy given the coronavirus situation. Availabilities appear to be good at this time, although if the tightness continues in the Group I camp, some blenders may be tempted to look at Group II as an alternative to Group I grades.

Prices are lifted to new levels and are assessed at $825/t-$865/t (€695/t-€735) for 150 neutral and 220N, while 500N and 600N are at $885/t-$900/t (€755/t-€770).

These prices apply to a wide range of Group II base oils, grades from Europe and the United States with full slates of finished lubricant approvals and those from the Middle East, the Far East and the U.S. with partial slates or no approvals.

Group III markets are seeing something similar to the Group I scenario with availabilities being severely squeezed and sellers starting to look at product allocations for December and going forward. The news is that spot availability is very limited hence prices have started to move higher, particularly for contracted quantities for 2021, which are being negotiated now between distributors and blenders.

Contract flexible pricing for next year is currently being based on the low quotations from various pricing agencies, plus premiums between €50/t-€65/t. The average price during the preceding calendar month prior to delivery date is the reference point for this type of pricing.

Some Far Eastern sources and their European counterparts are believed to be tight in supply terms for at least Q1 next year, and this may have knock-on effects with other suppliers having to fill the vacuum.

One aspect which is having a negative effect on some prices is the unseasonal low water level of the river Rhine. This curtails carrying capacity of barges due to draft, increasing unit costs and in some cases preventing delivery by barge altogether. Road transport has its own set of problems with the coronavirus rules between international players varying, changing and differing, whilst at the same time Brexit is looming at year end. United Kingdom receivers are trying to fathom their way through the new procedures for transporting Group III base oils from mainland European hubs. 

Prices have moved sharply higher by some €65/t-€90/t with current offered levels for December and January supplies now between €780/t-€820/t for partly approved Group III base oils. Levels are assessed between €800/t-€820/t for the 6 and 8 centiStoke grades, with 3 and 4 sCt at €780/t-€795/t. These prices refer to oils sold on an FCA basis ex Northwestern European hubs. Prices in respect of the range of fully-approved Group III base oils holding European OEM approvals are also moved higher and are now placed in ranges between €825/t-€850/t in respect of 4 cSt base oils, with 6 and 8 cSt at €845/t-€875/t.

Baltic and Black Seas

Baltic trade appears to have sputtered back to life, with one large cargo having loaded during early November with 15,000 tons of Russian export barrels moving to Nigeria. At the same time, a number of smaller parcels loaded out of upper and lower Baltic ports for Antwerp-Rotterdam-Amsterdam and two cargoes for the east coast of the United Kingdom. Two parcels of around 3,000 tons each are bound for the U.K., while another of more than 5,000 tons loaded for Dordrecht.

Indication prices leapt since the last report, following mainstream European API Group I levels higher. FOB indication levels moved upwards, with SN150 priced at around $655 per metric ton, SN500 around $675/t and BS 150 at $750/t. Base oils SN150, SN500, and quantities of bright stock from Gdansk are in line with mainstream European levels, with solvent neutrals at $665/t-$700/t and bright stock at $750/t-$775/t FOB. Bright stock may not show availability at this time.

Black Sea reports no Mediterranean supplies of Group I base oils flowing into Turkey, although Greek suppliers did have availabilities for offer into this region. These may no longer be available, due to commitments for other alternative export destinations. Suggestions are that prices were too suddenly high and that Turkish buyers preferred to “rely” on supplies of Group I base stocks out of the refinery at Izmir. Rumors are that these supplies are not too dependable. With the Turkish lira bouncing around the exchange markets and coming under more pressure against the U.S. dollar, just how secure the supply of any product is from Izmir refinery is anyone’s guess. The operator is running into problems accessing dollars with which to buy crude.

A couple of offers were made out of Livorno and Aghio for Group I cargoes for Turkish receivers in Derince and another Marmara port.

Group I grades out of the Mediterranean are assessed at around $745/t, $770/t and $825/t on a delivered basis CIF for the three Group I grades: SN150, SN500/600 and bright stock, if loaded and available.

Russian barrels are to be loaded around the end of November from the STS facility at Kavkaz, Russia, with 12,000-15,000 tons heading for receivers in Singapore. Indications are that Kavkaz, Russia, STS prices have moved significantly higher to $625/t-$655/t for SN500, with SN150 at $620/t-$645/t. These prices remain well below market levels for similar grades from mainstream supply points. 

Group II and Group III base oils are available on an FCA basis from distributors in Marmara ports, with prices at €725/t-€775/t for the low vis Group II grades, with the higher vis 600N at €780/t-€800/t.

Group III base oils are available at €875/t-€900/t for 4 centiStoke material, with 6 cSt grades at €920/t-€940/t, and 8 cSt ex-tank at €910/t-€930/t.

Middle East

Yanbu and Jeddah are the supply points for large cargoes of Group I and Group II base oils loading during the second half November for the west coast of India, Pakistan and the United Arab Emirates. Two cargoes of 14,000 tons each will load out of both ports.

There are reports of one Iranian export of base oil that loaded around mid-November, with a total of 5,000 tons of Iranian base oil destined to discharge into Sharjah port. This is a rare and unusual movement, since the cargo is being carried by an internationally flagged vessel which will now be black-listed under the U.S. sanctions that remain in place as of this moment. It is not clear as yet if the change in U.S. Presidency will alter or soften attitudes towards Iran, although some comments have postulated that there may be scope for renewed dialogue.

Prices for Iranian barrels of SN500+ are indicated from sources in the U.A.E. at $695/t-$725/t delivered CFR U.A.E. SN150 is also indicated lower at $675/t-$690/t.

Group III cargoes loaded out of Al Ruwais in the U.A.E., Sitra in Bahrain and Ras Laffan in Qatar. The latter loading was for a quantity of nearly 30,000 tons of Group III and lll+ base oils produced by gas-to-liquid technology. The parcel will discharge into three ports on the west coast of India.

Notional netbacks for Group III base oils out of Al Ruwais and Sitra are adjusted upwards this week in light of higher selling prices in various global markets. These netback levels are now assessed around $785/t-$825/t for 4 centiStoke, 6 cSt and 8 cSt partly-approved Group III base oils. Fully approved Group III grades, from Sitra, marketed by Neste, will provide improved netbacks with higher prices in global markets. Assessment is that these grades will netback at $840/t-$865/t 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 estimated freight costs.

Group II base oils on basis FCA U.A.E. storage are updated this week, with levels at $730/t-$795/t for light vis grades 100N, 150N and 220N, with heavier 500N/600N grades at $785/t-$820/t. The wide spread of this range takes into account various quantities from different sources, in both bulk and in flexies, with differing contract terms and selling conditions.

South African shipping sources indicate that two large cargoes will load for a major and will carry more than 9,000 tons and almost 12,000 tons of mixed grades of base oils. The first parcel is to load out of the U.K. with either three grades of Group I base stocks or a quantity of Group III, although with only three grades loading, this is unlikely. The second cargo will discharge first in Durban and then proceed with the balance of the cargo, expected to be 4,000-5,000 tons of Group I grades, to Dar-es-Salaam. The second vessel will load in Rotterdam, then the U.K. port before sailing to South Africa. A further cargo will proceed during December to Guinea and Cote d’Ivoire before finally discharging in Durban.

Trans-Mediterranean base oil supplies note a couple of cargoes, one from Sicily into Algeria and the second from a Spanish port moving material into Mohammedia in Morocco.


The long negotiated cargo out of Italy for Nigeria was finally fixed for a supply of 7,000 tons of Group I grades loading in Livorno at the start of November. In addition, a Baltic parcel loaded with 15,000 tons of Russian export grades and is currently en route to Apapa.

The regular supply into Guinea and Cote d’Ivoire will take place during December, although the vessel may not arrive in the first port until after New Year. The delivery under contract to Ghana does not appear to be included in this voyage, hence a further parcel may be arranged under separate vessel.

Group I base oil prices are reviewed this week after large increases which will apply to FOB numbers. Offers will take on different rates to those already fixed into Lagos, since prices will be moving upwards for the next round of cargoes moving into Nigeria.

CFR/CIF levels will now figure at $775/t for SN150, while SN500 lies at $790/t-$800/t. There are now offers for SN900, with indications from sources putting selling levels around $815/t, should material be available. Should higher specification SN900 be required – with viscosity index of at least 95 – then a higher level would be expected for this grade, at around $910/t. Bright stock is not available, although indications could be established at around $895/t.

These prices refer to cargoes arriving presently, or in the near future, but for further supplies, premiums of $75/t-$100/t over the prices above are expected to apply. Extra security costs are also involved for cargoes that are discharging into Onne or Port Harcourt. These costs are over and above those applicable in Apapa port.

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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