EMEA Base Oil Price Report


The calendar may have turned and vaccines may be rolling out, but base oil markets – along with much of the world – are still suffering from the effects of the COVID-19 pandemic.

Just when one region appears to be coming out of the mire, another announcement is made regarding another lockdown and further restrictions on people movement and the curbing of trade.

The base oil industry throughout European, Middle Eastern and African regions has been decimated by the pandemic, and many countries are trying merely to survive to get to the other side of this seismic event. With demand for finished lubricants faltering due to restrictions on driving and travelling, all types of base oils have seen demand falling away at the same time.

Some commentators have suggested that this may be a good aspect, since refinery cutbacks in production of distillate fuels has limited availability of feedstocks for base oils. Indeed, supply of API Group I grades has become remarkably tight around the world.

Base oil prices continue to rise both as a result of higher crude and feedstock costs and because there are real shortages of Group I and Group III oils. Group II is more balanced, with possibly sufficient production to meet current demand.

Crude oil prices continue to firm, after OPEC surprisingly announcing further cutbacks to production. For example, Saudi Arabia – one of the main producers – will reduce daily output by two million barrels, which will shorten the market and help push up crude prices.

Dated deliveries of Brent crude posts at $55.60 per barrel, up more than $4 from two weeks ago – this level now for March front month settlement. West Texas Intermediate breached the $50 psychological barrier, climbing to $52.15/bbl, but still for February front month.

ICE LS gas oil prices have jumped $20 per metric ton from last report to $446 per metric ton. These prices were obtained from London ICE trading late Monday.


Prices for Group I exports from Europe continue their upward trend with severely limited availabilities for sizeable cargoes to move to traditional export destinations such as West Africa, the Middle East and India. Traders are expressing frustration at not being able to assemble parcels requested by receivers.

Buyers are having to cobble together bits and pieces from sometimes two or three load-ports ports, all of which adds to the costs of shipping and ultimately the delivered prices. Offers to receivers have included some specifically blended grades that have been either prepared in shore tanks, or in some cases have been blended onboard.

Values for solvent neutral 150 numbers are now between $720 per ton and $755/t, up around $10/t. SN500 and SN600, being more in demand, have moved to $765/t-$785/t, and bright stock – which is extremely short – was heard at $855/t-$900/t, an increase of more than $40/t over the past couple weeks.

The above prices refer to cargo-sized parcels of at least 2,000 tons sold on an FOB bases ex mainland European supply points, always subject to availability.

Domestic markets around Europe have also seen Group I prices rise from January 1 but some suppliers have reserved the right to review prices on a two week basis, thereby not agreeing to hold prices firm for the duration of the month.

Buyers are still taking their full entitlement under supply agreements, although some have commented that business is slow due to the lockdowns which are currently in place in most European countries at this time. So far January levels having moved upwards by some $20/t-$30/t from end of year prices may start to lift again during the course of next week. Some sellers have already notified buyers that prices will move higher by between $20/t-$30/t.

Brexit does not appear to have impeded buyers in the United Kingdom from taking material from EU sources, although trade has been minimal due to the coronavirus situation both in the EU and U.K. The imposition of additional documentation appears to be going smoothly with tariffs and duties remaining as before.

The differential between domestic and export prices is adjusted this week with the gap between the two sets of prices widening on the back of significant increases to regional prices. The differential is now assessed between €55/t-€100/t.

Group II price levels have hardened throughout Europe with levels rising by €20/t-€30/t. Demand is relatively steady, but some buyers have reduced offtakes during January, possibly due to the limitations imposed on blenders from the lockdown scenarios across Europe. Demand is set to weaken during the first quarter with a number of key buyers either closed or on short time working. The automotive industry has cut back on requirements for finished lubricants and other industrial operations are not stocking up as would normally take place at this time of year. The expectation that this year would get off with a surge in demand has not materialised as yet.

Prices are raised and are assessed at $900/t-$945/t (€740/t-€775) for 150 neutral and 220N and $1,000/t-$1,055/t (€825/t-€865) for 600N.

Prices are in respect of 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 U.S.

The European Group III market is experiencing a strange phenomenon where there is little or no material available. Sellers have said that they are sold out for January and some large producers of fully approved Group III grades have even cancelled deliveries to customers for the first quarter.

All is dependent on replacement stocks arriving from local European, Middle East Gulf and Far Eastern sources, but these quantities on arrival are expected to sell out almost immediately. Spot availability for any Group III grades is nigh impossible, and prices remain firm amid strong demand for both fully-approved and partly-approved grades.

Buyers looking for long term contract arrangements with sellers are receiving no offers on supplies for the immediate future.

Prices for sales for the first quarter remain firm, with levels for small quantities loaded in trucks now between €780/t-€830/t in respect of the range of partly-approved Group III base oils. Levels are now assessed between €820/t-€830/t for the 6 cSt and 8 cSt grades, with 3cst and 4 centiStoke between €780/t-€800/t. Prices are in respect of FCA supplies ex northwestern European hubs.

Group III base oils holding full European OEM approvals have prices maintained between €845/t-€875/t in respect of 4 centiStoke base oils, with 6 cSt and 8 cSt grades between €860/t-€885/t.

Baltic and Black Seas

Baltic trade is muted once again with few movements of base oils coming out of that region. A small number of cargoes were leaving Kaliningrad for Antwerp-Rotterdam-Amsterdam, but activity is much less than was seen a year ago. Apart from the Nigerian cargo out of Riga, which successfully loaded at the end of December, no other significant parcels loaded during the first part of January.

The COVID spread affected trade in the Baltic, with some operations choosing to scale back given low demand rates for Russian export barrels loading out of Riga and Liepaja, and Polish material coming out of Gdansk.

Prices are difficult to assess since only nominal levels are established presently. FOB levels will have moved higher, with SN150 at around $695 per metric ton, SN500 around $725/t, with min 95 viscosity index bright stock at $855/t. Blended SN900 is assessed at around $765/t.

The Kavkaz, Russia, STS facility in the Black Sea is rumored to be preparing to load a large slug of Russian export base oils for receivers in Singapore. At the same time, there is interest to take another cargo loading out of this source to Rotterdam for bridging supply into the Caribbean. No confirmation of these cargoes was given, yet it seems likely that if material can arrive at the STS facility, then these parcels will emerge over the next couple of weeks. Indication STS prices are pushed slightly higher, with levels at $635/t-$655/t for SN500, with SN150 at $625/t-$645/t.

Mediterranean-sourced Group I imported base oils for the Turkish market have restarted, although sellers may not have full quantities available to cover all the inquiries issued from Turkish receivers. Sellers based in Livorno and Aghio will continue to supply into this market, since prices are relatively high when weighed against the domestic production from Izmir, which has some supply problems. Product is not always available, with buyers having to scramble around to access base oils for blending operations.

Group I grades from Mediterranean sources are pushed to higher prices, around $795/t for quantities of SN150 with SN500 priced at $820/t. Bright stock, if available out of Livorno, will be much higher than previously noted at around $945/t.

A parcel of re-refined Group II base oils is offered into Turkey, with this option a more economical option for some blenders in Turkey. The Group II parcel was sold at the end of December, for arrival into port at Gebze, Turkey.

Group II and Group III base oils sold from FCA Marmara ports are priced higher this week, at €775/t-€810/t for low vis Group II grades, with the higher vis 600N at €820/t-€860/t.

Group III base oils if available, are priced at €910/t-€940/t for 4 centiStoke material, with 6 cSt grades at €930/t-€950/t and 8 cSt material at €950/t-€970/t.

Middle East

Cargoes comprising of Group I and Group II base oils are loading from Yanbu and Jeddah for discharge in the west coast of India. Other contracted supplies are arranged for receivers in Karachi and United Arab Emirates.

With regard to Iranian exports, while no direct sailings were noted coming out of the southern Iranian ports, a 7,000 tons parcel was loaded out of Sharjah for supply into the west coast of India. This cargo may have been comprised of Iranian sourced material, although the certificate of origin would have stated U.A.E. COVID reports are that Iran is having a terrible time at the moment. This in itself may be enough to curb and discourage any attempts at exporting base oils against the U.S. sanctions that remain in place at this time. 

From sources in U.A.E. notional prices for Iranian barrels of SN500+ are established for the purposes of this report at $775/t-$800/t delivered CFR U.A.E. SN150 is indicated at $730/t-$760/t.

Supplies of Group III base oils from Al Ruwais in U.A.E. and Sitra in Bahrain have notional netbacks maintained after having adjusted these figures higher in the previous report. Prices in key markets such as the United States, Europe, India and China have stabilized at the levels mentioned at the end of December.

Netback levels remain assessed around $815/t-$855/t for 4 centiStoke, 6 cSt and 8 cSt partly-approved Group III base oils. Fully approved grades from Sitra will provide higher value netbacks due to the pricing differential in global markets. These grades should netback at $875/t-$900/t for the 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 sold FCA from U.A.E. storage have moved higher and are now in ranges at $850/t-$895/t for light vis grades 100N, 150N and 220N, with heavier 500N and 600N grades at $920/t-$950/t. The wide range takes into account various base oils supplied from different sources delivered into the U.A.E. in both bulk and in flexies, with varying contract terms and selling conditions.


The North African cargo of 7,000-8,000 tons of Group I base oils is believed to have loaded out of Arzew in Algeria and is now on the high seas en route for Nigeria. There was no news on the Egyptian General Petroleum Corp. supply of bright stock into Alexandria, with only one parcel from southern Spain going into that market during December. That cargo of 3,000 tons of bright stock may not have been delivered for EGPC, since there appears to have been no issuance of the tender that was previously held by the Saudi Arabian supplier.

West African news is that there are real problems in traders getting hold of material either from Europe or from U.S. sources to deliver Group I base stocks into the Nigerian market. The Baltic parcel appears to be the last cargo going into Apapa, following the large cargo loaded from Aghio in Greece, which should be currently discharging.

There are a number of inquiries from receivers in Nigeria, none of which can be easily covered. With the small 3,000-4,000 tons parcel out of Antwerp-Rotterdam-Amsterdam still considered, but with freight costs against execution of this delivery, other options may be looked at.

API Group I base oil prices for the cargoes arriving now or in the next couple of weeks are maintained at previous levels. In the absence of any real offers, these levels are preserved. Any further cargoes will reflect the higher FOB levels seen both in Europe and the U.S., but with tight availability for any supplies, prices may have to move even higher.

CFR/CIF levels for new offers for base oils arriving into Apapa are assessed at $820/t-$850/t for SN150 and SN500 at $865/t-$885/t. Higher specification SN900 with VI min 95 will be priced at around $910/t. Bright stock, being unavailable, has indications only around $1,000/t.

Prices may move higher for future cargoes with prices moving to levels around $895/t for SN150, with SN500 at around $925/t and min 95VI SN900 leveled at around $960/t. Bright stock, if available for future cargoes in February or March, can be expected to be noted in offers at around $1,020/t.

The reason for noting both sets of prices is that with the lack of availabilities at the moment, it may be some time before cargoes can be found to supply this market, and prices are moving higher on a dynamic basis.

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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