EMEA Base Oil Price Report


Remarkably, the base oil supply scene tightened further the past two weeks as availability in all product groups diminished. API Group I supplies remain exceptionally elusive as maintenance turnarounds take their toll and producers advertise few spot availabilities.

Group II is also becoming scarce, some buyers being unable to procure quantities necessary to produce contracted volumes of finished lubricants. Some large end-users are in turn struggling to maintain their own operations and output of machinery and goods. Group III supplies are remote, with sellers offering to supply only regular customers – in many cases with lags of up to three months.

New buyers looking for material in any of the base oil groups are struggling to find availabilities, and the situation is preventing any flexibility in base oil purchasing.

These conditions have caused prices to remain firm. Many sellers are raising prices on a routine basis, some adopting weekly reviews that consistently result in the same action.

There is little indication of downward pressure. Some sellers have said that there must be limits to what the markets can absorb, but these apparently have not been reached as yet. 

Crude oil prices remain firm and perhaps have not risen as sharply as many feared around a month ago. Tensions in the Middle East however are not helping to stabilize values, and some commentators warn that levels may rise more if tensions ratchet further, for example should Iran become directly involved in the conflict in Gaza.

Dated deliveries of Brent crude rose approximately $1 during the past two weeks to $68.45 per barrel for July front month settlement. West Texas Intermediate crude moved higher by a similar increment to $65.05/bbl, still for June front month.

ICE LS gas oil prices rose some $15 per metric ton to $559/t. These prices were obtained from ICE London trading late Monday.


Prices for Group I exports from Europe increased since the last report. Many players in the market had speculated that levels had peaked around three weeks back, but the economics of supply and demand thwarted that view.

Various destinations are desperate to buy product, with some receivers in West Africa withdrawing from the base oil market due to lack of availability. Buyers in the Middle East Gulf and Turkey are likewise struggling to find quantities of Group I base stocks. Shortages are having knock-on effects as stocks dwindle and prices are extremely high at lube retailers.

Prices for solvent neutral 150 were seen last week between $1,400 per ton and $1,475/t, but SN500 being more sought after, and obviously less available, has risen to $1,595/t-$1,700/t. Some buyers are shying away form the market, saying that they can no longer pass on markups.

Bright stock remains tight enough that only regular buyers able to purchase quantities of this grade. Export prices are now being reported at $2,120/t-$2,155/t, more than $100/t higher than two weeks ago. That run-up did not happen in one hit but rather in almost daily markups that have been occurring the past six weeks.

With bright stock so scarce, many receivers have looked at alternative grades such as SN900, which is blended from SN1200 and SN500. This option has been made available for receivers in Nigeria for example, although some formulations require bright stock as one of the blend constituents. Finished lubricants made from bright stock are simply not being produced at this moment.

The prices above refer to cargo-sized parcels of at least minimum 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 oils sold within Europe also rose the past few weeks after previously lagging behind exports. In some areas local problems play a factor. Availability in Eastern Europe has been further pinched by turnarounds in Poland and a halt to supply from Mol’s refinery in Hungary for the month of May. In response, buyers have tried a variety of tactics to lay hands on material, for example trying to access stocks from Russian traders or alternative suppliers in Northwestern Europe. Some buyers have succeeded while others have drawn blanks.

During periods of shortages, suppliers sometimes implement allocations, but that has not been happening in this case; buyers have simply been told that no supplies are available. The market is waiting to hear if production will resume sufficiently for material to become available during June.

Blenders are frantically trying to convince their customers to allow them to pass on cost increases. Some have succeeded, but there were reports last week of end users refusing to take deliveries of some products since they cannot ultimately pass on the increases.

Differentials between prices for exports and intra-regional sales have mostly disappeared. Export prices perhaps remain slightly higher than domestic levels, purely on the basis that cargoes being talked last week reflected higher numbers for future loadings. The differential is assessed between €0/t-€20/t.

Group II prices are marked higher this time around as availabilities weaken while strong demand continues to exert upward pressure, especially for heavier viscosity grades. There are some reports of new buyers being turned away by suppliers. Main suppliers of Group II grades are to honor commitments to regular customers, albeit at higher prices than were set or agreed at the beginning of May.

Prices are now assessed at $1,420/t-$1,455/t (€1,225/t-€1,275) for 100 neutral, 150N and 220N, but 600N vaulted to new highs of $1,820/t-$1,865/t (€1,560/t-€1,610). The differential between lighter vis grades and 600N rose dramatically over the past few weeks. Some sellers and buyers have suggested the differential may widen further.

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

The European Group III market has tightens as a swelling population of buyers encounters limited supply. Some sellers are imposing allocations, either directly or through distributors, while others are reportedly selling three to four months in advance. These sales are to regular buyers who are committing to purchase the quantities of base oil being offered. This does not appear to be a problem for blenders, who can take as much product as is available.

Turnarounds are contributing to the shortage since two major European maintenance programs are underway. There is little sign of new Group III output from Russia reaching the European market.

Prices for oils with partial slates of approvals have risen steadily and are now at €1,475/t-€1,500/t for 6 and 8 centiStoke grades and €1,455/t-€1,470/t for 4 cSt, all on an FCA basis ex Antwerp-Rotterdam-Amsterdam hubs. Many buyers not overly concerned regarding approvals, as long as quality and specifications are met, so the differential between partly-approved oils and those holding the Volkswagen standard of approval has lessened. The more important factor now is availability and assured supply continuing into the future.

However, Group III base oils which do hold the full slate of European OEM approvals are posted slightly higher at €1,500/t-€1,525/t for 4 cSt and €1,565/t-€1,595/t for 6 and 8 cSt.

Baltic and Black Seas

Reports from the Baltic describe a number of cargoes moving to Northwestern Europe and Antwerp-Rotterdam-Amsterdam, but no United Kingdom movements are noted this week, which is unusual since many of the blenders based in U.K. continue to rely on Russian export barrels. Some players are opting to move to rerefined base oils since these are now at an acceptable standard for regular blending, and with Group I material being very short overall, this option is readily taken up.

One large cargo of 12,000 tons contracted to Singapore receivers is currently loading out of Svetly, Russia. This supply was originally handled from a Black Sea source, but has lately been transferred to the Baltic. In addition the same supplier has loaded an 8,000 tons parcel for a two-port discharge in Rotterdam and northwestern France. Another smaller cargo of some 4,000 tons has loaded out of Riga, Latvia, for contracted buyers in Antwerp-Rotterdam-Amsterdam.

Prices appeared to have peaked previously, but with a large enquiry for some 12,000-15,000 tons being negotiated for Nigeria, numbers appear to have risen again. This is probably on the back of ever firmer numbers for Group I availabilities in mainland Europe. Prices for Russian export barrels are re-assessed at $1,365/t-$1,420/t for SN150, and $1,550/t-$1,595/t for SN500. It is believed that a parcel of blended SN900 will comprise part of the large Nigerian cargo and this grades may be priced at around $1,645/t.

In the Black Sea region the Turkish is experiencing the same problems as those in mainland Europe, but with the Turkish economy being in a sorry state, options for importing cargoes from the regular Group I suppliers in Aghio, Greece, and Livorno, Italy, are limited.

The reported sale of the refinery at Fergana, Uzbekistan, may affect availability for base oils produced at that location to find their way into the Turkish markets. There have always been options for material from Fergana to come into Turkey, although the grade slate is not considered ideal, and production of lower specification oil from this source may not continue.

Mediterranean sources said a 3,000 ton parcel that loaded out of Livorno at the end of last month has gone into Derince, Turkey. Another partial-cargo from a major is to discharge into Gebze and Gemlick, Turkey, so there are signs that local blenders and traders are able to organize banking and finance for these purchases, which are made in U.S. dollars.

Offer prices for oils from Mediterranean sources are put at around $1,510/t for SN150 and $1,725/t for SN500, basis CIF. These prices have been revised upwards in view of recent increases pertaining to FOB levels.

The Izmir refinery is currently producing base oils that are being sold in truck loads in local currency, and it not clear how these prices would translate to U.S. dollars since Turkey’s lira is steadily falling in value. Local prices for imported Group II and III base oils have risen to €1,565/t-€1,585/t for lighter grades and €1,855/t-€1,895/t for 600N, ex tank Gebze, Turkey,.

There are a number of cargoes of Group III base oils being planned for import into Turkey, some from the Far East and others from the Middle East Gulf. Accounting for these shipments, distributor prices rise to €1,540/t-€1,585/t for partly- and fully-approved 4 cSt and €1,575/t-€1,595/t for 6 and 8 cSt.

Middle East Gulf

From the Luberef plant at Yanbu al’Bahr, Saudi Arabia, a few cargoes are emerging for receivers in India, which is struggling with a surge of COVID-19 infections. This has certainly affected the flow of base oil imports, although one 15,000 ton parcel has loaded out of Yanbu for receivers on the West Coast of India. A future shipping inquiry is lodged to take Group III grades from South Korea, produced by S-Oil, which is partly owned by Luberef parent company Saudi Aramco. This material is destined for Yanbu, and the usual 5,000 tons will supplement the local Group I and Group II production.

Recent reports about Iranian base oil exports are difficult to decipher. Some sources in United Arab Emirates have said that material is being transported by road to Syria and Turkey, but no confirmation can be attained from any Iranian contacts. The country is said to be reeling from a new wave of coronavirus infections. similar to what has happened in India, but contacts within Iran have vehemently denied this occurrence, insisting that Iran is in a better position that U.A.E. regarding recovery from the pandemic – accounts that raise questions about the true situation.

More Group III cargoes are noted coming out of Al Ruwais, U.A.E., and Sitra, Bahrain, although some reports described enormous quantities of Group III base oils coming out of Qatar. These are not recorded by typical third-party channels since they are typically classed as inter-affiliate trade.

One 8,000 ton cargo has loaded out of Al Ruwais for receivers in China, and another of similar quantity is due to load for replenishment into Europe.

Assessing netbacks for Group III grades out of the Middle East Gulf, returns have risen to $1,465/t-$1,575/t for 4, 6 and 8 grades with partial slates of approvals. Nexbase-branded oils from Sitra have full slates of approvals and carry slightly higher values in some export markets – $1,500/t-$1,595/t for 4, 6 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 estimated freight costs.

Prices for Group II base oils, which are imported to the U.A.E. in both bulk and flexitanks, have increased to $1,575/t-$1,685/t for 100N, 150N and 220N and $1,845/t-$1,900/t for 600N, ex storage tanks. The wide ranges take account of various base oils supplied from different sources such as the U.S., the Far East and the Red Sea.


There are fewer cargoes of Group I being touted for delivery into West Africa. The large number of inquiries that had been issued by buyers and receivers in Nigeria has receded, with local buyers becoming aware of the lack of availability and the enormous price hikes on material going into that market. There is one smaller inquiry aimed at Cote d’Ivoire, for some 2,500 tons perhaps loading for Abidjan. This quantity would normally be a partial cargo, perhaps combined with a parcel bound for South Africa, and a stand-alone deal will be an expensive operation.

The old problems have arisen yet again with banks unable to access foreign currency in large enough quantities to purchase cargoes of base oils. Also there are problems with individual companies’ credit lines not extending to the large value of purchases. A typical cargo of around 10,000 tons cost around $6 million at the end of 2020 but costs around $20 million today. Not all importers, traders and their banks can handle purchases of this sizeh.

There are also the additional problems of the local markets accepting new prices for both base oils and finished products. This is another big ask.

There is only one possible prompt cargo around at this time, that being the 12,000-15,000 ton parcel being negotiated out of the Baltic. Other traders may be looking at Greek sources to provide at least partial cargoes. CFR/CIF offer levels for Group I oils to be landed into Apapa port in Lagos, Nigeria, will reflect the latest FOB levels for May and beyond. These latest numbers are assessed to be around $1,520/t for SN150, $1,725/t for SN500 and $1,785/t for SN900 with viscosity index of at least 95. Bright stock remains unavailable.

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.