EMEA Base Oil Price Report


Base oil markets around the Europe, Middle East and Africa regions are witnessing extraordinary events at the moment, with supplies drying up and prices maintained at all-time highs.

However, there are pockets of supply where refiners are desperate to move product due to lack of local or regional demand. Such is the case in Turkey where the local refinery in Izmir is having to participate in export markets to move inventory. This is the case where local demand has collapsed for the API Group I grades available from this source.

With many of the Group I turnarounds now completed, it could be considered that the market would start to show more availabilities, with product coming back on-stream from these refineries. This has not proved to be the case, with Group I remaining short particularly for the heavier grades, and with very few signs that this picture is going to change any time in the near future.

It was also assumed that when refiners started producing increasing quantities of transportation fuels following lockdowns throughout the regions that feedstock availability would improve, thus allowing greater production of base oils. However, with base oils only forming a small and rather insignificant part of refinery slates – as quoted by more than one producer – this action does not appear to have come about. There are still reports of shortages of all types of base oil – Group I remaining tight, Group II shortening as each month goes by and API Group III becoming exceptionally short, with some grades such as 6 centiStoke simply not available.

Many buyers in the export markets have given up waiting for prices to come off and are now causing perhaps an artificial spike in the market due to having to purchase material on what can only be described as emergency situations. Many found themselves with little or no inventory and few possibilities to lay hands on quantities of suitable material on a prompt basis.

Crude oil prices have also played their part in sustaining base oil levels at the highs with dated deliveries of Brent crude moving upwards to $75.25 per barrel, $2 per barrel higher than last reported two weeks ago, and is for August front month. West Texas Intermediate crude moved upwards by a similar rise to a new high at $73.15 per barrel, now also for August front month settlement. Crude prices continued to strengthen on the back of increasing demand from major markets in the Far East. Crude values continue to show harder numbers, the highest seen since 2018.

ICE low sulphur gas oil prices are higher by around $7 per metric ton and have now broken through the $600/t mark. LSGO is now posting at $601/t. 

Prices were obtained from late London ICE trading on June 28.


European export prices for Group I base oils on an FOB basis are steady, but are maintained at the high levels reached a few weeks back. These levels continue to show strength, with little inclination to start discounting.

Europe remains tight for supplies of larger parcels of Group I grades, even against the backdrop of most Group I turnarounds being completed. However, July may see things changing. With the holiday month of August approaching fast, buyers are keen to make final purchases prior to the September. This in itself is helping to drive the market to maintain the firm prices levels seen over the last couple of months.

Prices have remained firm, although levels have not risen further.

Prices for quantities of SN150 are set in a band at $1,225/t-$1,275/t, while SN500 remains scarce and at a higher level at $1,675/t-$1,725/t. Bright stock in quantity remains extremely tight, with prices heard for the few cargoes reported at $2,120/t-$2,155/t.

Bulk Group I export prices refer to cargo sized – minimum of 2,000 tons – parcels of Group I base oils, FOB from mainland European supply points, always subject to availability.

Group I domestic markets are supporting mixed emotions, with some buyers intimating that they are pursuing discounts for July offtakes, although these requests are denied by sellers at this time. Numbers remain around the same as last reported. Reports are that the market is not so tight as previously noted, and that more availability is around. This could be due to reducing demand due to the onset of the summer period, or it may reflect that more Group I material is available following the end of the turnaround season, when a number of prime sources were down for up to four weeks. Prices are so far holding at the high levels, but there may be downward pressure coming to bear on this sector of the market during the summer period.

This market can be described as stable this week. But with July prices coming out over the next few days, the market may see some adjustments made in the downward direction. Should domestic prices come under pressure, the market could see a return to the situation where export numbers are noted higher than prices in the local markets.

Differentials vary at the moment between export and domestic prices and are broadly assessed at €15/t-€75/t, domestic numbers being higher, but the differential is vey much subject to grade, with bright stock for example at the higher end of the differentials.

European Group II prices are stable, but are under discreet pressure to firm further due to a tight supply scene around Europe. The European market has seen less material arriving from the United States. Due to a number of unscheduled shutdowns and firmer domestic demand in the U.S., producers have been catching up by replenishing inventories and have therefore assigned less material to export destination, Europe being in that category. Another reason for less material arriving from the U.S. could be the imposition of the EU Commission levy of 3.7% being added to imported Group II grades once the tariff quota has been reached. This certainly does not encourage U.S. importers to prioritize the European markets, since the U.S. does not currently enjoy a free trade agreement with the EU.

There are some “new” entrants to the base oil scene looking to take material into EU and the United Kingdom from a Far East source, but since this business would have to start off with deliveries in flexies, logistical negatives abound due to a shortage of containers in the Far East. However, the arbitrage is open for this trade to work, since a number of producers in Far East have excess barrels of Group II base oils seeking new markets. 

Prices are assessed higher this week being assessed at $1,540/t-$1,690/t (€1,300/t-€1,420/t) for the three lighter vis grades – 100N, 150N and 220N – with the higher 600N vis grade continuing to sell at a premium at $1,840/t-$1,895/t (€1,565/t-€1,615/t).

Prices are for a wide range of Group II base oils, including European, and U.S. fully approved grades, but also material from the Middle East, Far East and U.S.

Group III prices are firmer due to an exceptionally tight market, where turnarounds and a lack of spot supplies are having severe effects on this market. Rumors suggest that the U.S. Group I market is also firm, which may deprive Europe of a number of barrels. One interesting feature this week is that a major producer in the Mediterranean, going into a major turnaround, dispatched a large cargo to an affiliate in South Korea. The cargo is 20,000 tons in total, made up entirely of Group III grades. The maintenance for this refinery includes up-scaling of production for Group III grades by as much as 50%, but it is not clear when this output will be established as up and running.

Prices moved higher, firming further against a tight supply scene, which is forecast to become even tighter over the next three to four months. Levels are assessed upwards, at €1,420/t-€1,510/t for the range of partly-approved Group III base oils. Prices are placed at €1,500/t-€1,520/t for the 6 cSt and 8 cSt grades; however, one major supplier has informed this report that the 6 cSt grade is not available, but would have been priced at €1,500. Four cSt grades are at €1,420/t-€1,440/t. Prices are for FCA supplies out of Antwerp-Rotterdam-Amsterdam hubs.

There could be some respite for supplies when a Russian producer comes back on the market with the 4 centiStoke grade produced at the refinery.

Group III base oils holding full European original equipment manufacturer approvals are also aimed higher, with no spot availabilities for these grades due to maintenance at the two prime European production locations. One of which is now completed, and the other is set to complete later in July. Prices are at €1,465/t-€1,485/t in for 4 centiStoke base oils, with 6 cSt and 8 cSt grades at €1,525/t-€1,565/t.

Baltic and Black Seas

Baltic Sea traders are treading a fine line at the moment. Sellers are determined to maintain prices at the high levels seen recently, while risking not moving stocks out of tank in the situation where buyers are unwilling or unable to purchase at the prices being asked. The firm offers on the table are suppressing demand, but traders maintain that buyers in export destinations such as Nigeria will have to buy base oil sooner rather than later due to low inventories and falling stocks. Then the Baltic will see more larger cargo deals done.

The first of these may already have been transacted, with a vessel loading out of two ports in the Baltic with 9,500 tons of Russian export grades for receivers in Apapa. The vessel loaded last week and is en route to Nigeria. Other short-sea trades have also been accounted for with one cargo out of Riga loading 4,000+ tons of Group I Russian barrels for contract supply into Dordrecht, while another cargo combining SN500 and a 2 cSt Group II grade also loaded out of Riga for the east coast of the United Kingdom. Two subsequent parcels loaded from the lower Baltic, out of Gdansk for receivers in Antwerp-Rotterdam-Amsterdam. These cargoes were 2,800 and 4,000 tons, respectively.

The next large Russian refinery tender – Rosneft – was issued for some 38,000 tons of material coming out of three refineries, but this material will only be delivered into shore tanks in the Baltic during August. Bids have not been disclosed a yet for the tender supply or part thereof.

Prices are maintained around existing levels, with FOB numbers for Russian exports steady. Prices are assessed with SN150 at $1,165/t/t-$1,200/t, with SN500 being in higher demand, offers were heard at $1,625/t/t-$1,675/t, and with market demand focused on supplies of SN900 for the Nigerian market, this grade goes is priced at around $1,725/t.

Black Sea shipping reports contain news that a 6,000 ton cargo of Group I grades was loaded out of Aliaga port for Apapa in Nigeria. This rather novel and odd cargo was researched and was found to consist of material from Tupras Izmir refinery. The reason for this oddball route and supply were outlined for this report. Apparently, the Turkish domestic market is in a terrible state, with blenders in that country unable to pay for the high priced base stocks and additives to manufacture finished lubricants. With the base oil plant at the refinery in Izmir continually producing base oils, it has had to launch into the export scene to be able to move inventory.

According to sources in Turkey, the cargo was sold to a “major” at very high prices. No other details were available other than that Tupras will continue to export because the Turkish markets is exceptionally quiet.

This cargo out of Turkey follows the other parcel of 7,000 tons of Russian export barrels loaded recently out of the STS facility at Kavkaz, Russia, for Nigeria.

No reported cargoes are loading from Mediterranean sources that typically go to Derince and Gebze, Turkey, and with the background to the Turkish blending scene, it would be unlikely that Mediterranean cargoes with expensive Group II base oils are going to be possible for importing into Turkey in the near future.

Mediterranean indicative prices are assessed at around $1,335/t CIF in for SN150, with SN500 at around $1,775/t.

Prices for imported Group II and Group III base stocks are at €1,465/t-€1,485/t for the low vis API Group II grades, with the higher vis 600N remaining higher at €1825/t-€1865/t. Local buyers have lamented that they can’t buy base oils at these higher levels because the blended end-products become prohibitively expensive for the local markets. They state that are unable to pass on increases for finished lubes to end-users.

Group III imports into Turkey from the Middle East Gulf are priced at €1,540/t-€1,585/t for partly-approved and fully-approved 4 centiStoke material, with 6 cSt and 8 cSt grades at €1,575/t-€1,595/t.

Middle East

Two cargoes identified loading out of Yanbu and Jeddah will deliver base oils to a Sudanese port, and the balance of the cargo will go into Sharjah port. This cargo loaded in mid-June, while a follow-up cargo will load in July with the same discharge plan. The first parcel comprises of 8,800 tons, while the second for July will load a larger quantity of around 16,400 tons.

In the Middle East Gulf there was no news of base oils moving out of Iran. There are no shipping details of any movement from the southern Iranian ports of BIK and BB.

Group III export cargoes, being the mainstay of Middle East Gulf activity, continue to load out of Al Ruwais and Sitra. There are confirmed reports some 92,000 tons of Group III+ grades loaded out of Ras Laffan in Qatar during the first half of the year. This entire quantity was delivered in various cargoes to China. Additionally, a large cargo of 35,000 tons is completing loading this week for the west coast of India. This is also coming out of the facility at Ras Laffan.

Netback assessments for Group III grades exported from the Middle East Gulf are boosted due to higher selling prices in markets such as Europe, India, Far East and the U.S. Levels are increased to $1,535/t-$1,645/t for 4 cSt, 6 cSt and 8 cSt partly-approved Group III base oils. Grades from Sitra, being fully-approved, will netback higher due to the pricing differential in the export markets. These grades could now netback at $1,575/t-$1,665/t for 4 cSt, 6 cSt and 8 cSt Group III base stocks.

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 imported into United Arab Emirates from various sources in the U.S., Far East, Saudi Arabia and Europe, in both bulk and flexies, are priced FCA at $1,600/t-$1,745/t for the light vis grades 100N, 150N and 220N, with heavier 500N and 600N grades also higher at $1,910/t-$1,955/t.


South African shipping sources confirmed the next large cargo loading out of Rotterdam and Fawley, which was identified in the last report. This large cargo will discharge 20,000 tons of various grades of base oils and drilling fluids into Durban, while 5,000 tons of Group I base oils will be delivered into Tema in Ghana en route.

A confirmed cargo loaded out of Aliaga in Turkey, taking 6,000 tons of Group I grades from Tupras refinery in Izmir. This unusual source and route into the Nigerian market is because Tupras cannot sell all their production into the local markets in Turkey; hence, they have had to start tenders for quantities to export. So far there have been three tenders – during April, May and June.

A Baltic cargo also loaded out of two ports – Riga and Kaliningrad – with 9,500 tons of Russian export base oils for discharge into Apapa during July. Another inquiry is on the table for a larger quantity of some 15,000 tons to load out of Riga and Liepaja during the latter part of June and the first few days of July.

Availabilities in traditional sources in Europe and the U.S. remain tight, and prices in those regions do not seem to be coming under real pressure to discount. Buyers in Nigeria have stark choices to make regarding replacement cargoes if they wait longer to achieve lower prices they may not be able to access material to cover requirements. Some traders are offering lower numbers without commitment to a particular cargo, and in taking a position they may be risking more than just reputation. Other traders are starting to offer material into Nigeria, and these offers have contained lower prices than have been currently seen, being hopeful that the Group I market is going to come off in the next few weeks.

CFR/CIF offer levels for Group I base oils already sold firm and landing into Apapa in July, reflecting the latest FOB levels from the Baltic and Mediterranean plus freight and margins. Prices are $1,895/t for SN150, SN500 at $1,950/t, with higher spec SN500 around $1,965/t and SN900 with minimum viscosity index of 95 priced at around $1,995/t. Bright stock generally 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.