EMEA Base Oil Price Report


After a long, steep run-up price relief has come to at least parts of base oil markets in Europe, the Middle East and Africa. API Group I grades are seen as lower this week due to the end of the refinery maintenance season and to increased run rates from refineries that are gearing up to produce more transportation fuels and hence greater quantities of base oil feedstocks. Those trends appear to have momentum to continue for the next few months.

Group II and Group III products, however, are seen to be stable to firm with

various markets seeing tightness for these grades. Europe is particularly tight, even against the backdrop of an open arbitrage from Asia-Pacific sources where markets have loosened up over the past month.

The European Group II market has seen a reduction of imported quantities from the United States, causing a tight supply position despite maximum output from regional sources. One main Group III producer recently completed a maintenance shutdown, and another is in the midst of its own turnaround, so the region is dependent on imports from the Middle East Gulf, Southeast Asia and now other Asia-Pacific sources.

Some buyers believe upward pricing pressure is easing, and they therefore are holding back from making major purchases. This in turn is allowing more material to come to market, increasing availabilities of some products.

Crude oil values fell during past 10 days but showed signs of firming early this week. The tenuous link between base oils and crude prices has been ripped apart by the dearth of base oil supplies.

Dated deliveries of Brent crude had fallen below $72 per barrel last week after OPEC failed to reach an agreement on production quotas. The price reached $74.50/bbl yesterday, now for September front month settlement. West Texas Intermediate meanwhile is at $73.50/bbl, still for in August settlement. The $1 crack between the two benchmarks is the smallest for quite some time.

ICE low-sulfur gas oil prices are slightly lower at $599 per ton on the last day for July front month. These prices were obtained from London ICE trading late Monday.


Prices for Group I exports from Europe have retreated, reflecting the greater availabilities coming on to the market. Demand is slower since the start of the summer holiday season, and some believe it will fall further in August and September.

Prices are mixed, with some suppliers trying to hold onto high levels whilst others are more willing to negotiate. One supplier even described struggling to move material.

Prices for solvent neutral 150 have fallen by between $30/ton and $50/t to $1,195/t-$1,225/t, while SN500, which remains relatively scarce, dipped just $20/t-$30/t to $1,645/t-$1,690/t. Bright stock remains tighter, although a couple traders reported seeing larger quantities this grade becoming available. Prices are at $1,995/t-$2,055/t.

The market for Group I sales within the region is also showing weaker demand and lower prices from July 1, with regular reviews being called by buyers and receivers in light of the extremely high values. There have been reports of some discounting, basically in the form of lower contracted numbers, and the start of summer could create more downward pressure.

The market is weakening although how far this will progress will depend on demand, availability and the export markets. It has become evident that many buyers in this sector of the market are holding back from making major purchasing decisions to rebuild inventory based on weakening prices and unknowns as to the coronavirus situation.

With prices falling for export and intra-regional sales, differentials between are assessed unchanged at €15/t-€75/t, export values being lower.

European Group II price levels are steady due to healthy demand and a relatively tight supply scene. Demand may start to fall off over the next couple months due to the summer recess, but the outlook is that there will be renewed demand and possible shortages in this sector should hurricanes disrupt supply from the U.S. European markets have seen less material arriving from the U.S., firstly because of unscheduled shutdowns and firmer domestic demand in the U.S., and secondly because refiners have been building stocks ahead of severe forecasts for the oncoming hurricane season.

Some players are insisting that the arbitrage between Asia-Pacific and Europe will lead to a flood of imports from countries free trade agreements with the European Union, resulting in a surplus for the European arena. This has not occurred as yet, although there have been talks of a number of opportunities being investigated from South Korea and also China.

Prices are assessed in the same ranges as last reported, at $1,540/t-$1,690/t (€1,300/t-€1,420/t) for 100 neutral, 150N and 220N and at $1,840/t-$1,895/t (€1,565/t-€1,615/t) for 600N. These prices apply to a wide range of Group II base oils, including products from Europe and the U.S. carrying full slates of finished product approvals as well as oils from the Middle East, the Far East and the U.S. with partial slates or no approvals.

European Group III prices are steady with the markets remaining firm due to a tight supply scene with the effects of production from active sources maxed out and local turnarounds. In addition, a lack of spot supplies is having severe effects on this market.

There is still no reported news on the production increase at a Spanish refiners plant. This is said to be in the order of 48% more output of Group III grades, although with storage facilities being limited at this installation, perhaps further tankage will be required to accommodate such a large increase in production.

Prices are unchanged at €1,420/t-€1,510/t for grades with partial slates of approvals, sold on an FCA basis ex Amsterdam-Rotterdam-Antwerp. Six and 8 centiStoke oils are at €1,500/t-€1,520/t, while 4 cSt is at €1,420/t-€1,440/t.

Group III base oils with full European OEM approvals (such as Volkswagen) are also maintained at €1,465/t-€1,485/t for 4 cSt and €1,525/t-€1,565/t for 6 and 8 cSt.

Baltic and Black Seas

Baltic Sea activity is subdued following a flurry of cargoes loaded during the second part of June. There are no large-scale inquiries for Nigerian receivers although there have been a couple of short-sea trades moving from Riga to Dordrecht with two cargoes loading closely together in the first week of July. One was for 3,100 tons of Russian export barrels whilst the second loaded nearly 4,000 tons.

A further cargo is to load out of the southern Baltic port of Gdansk for destination U.S. Gulf Coast, and another parcel rerefined base oils has loaded out of Kalundborg, Russia, for the United Kingdom’s east coast. The final reported cargo is some 7,000 loading out of Sveltly terminal for Amsterdam-Rotterdam-Antwerp.

The results of the Rosneft tender are not yet fully published although it has been heard that bid prices were substantially lower than the previous tender. This information has yet to be verified and allocations of quantities are also being sought. 

FOB Prices are weaker and are assessed with SN150 at $1,095/t-$1,155/t, SN500 at $1,495/t-$1545/t and SN900 at around $1,585/t.

Black Sea activity is also muted with the Turkish market exceptionally quiet. This will possibly be the case until after the summer period, since there are a number of economic and currency issues to be sorted out in this country before trading can return to pre-Covid levels.

A major base oil supplier will however deliver a split cargo into Gebze and Jebel Ali, although the relative quantities going into each disport is not known. This cargo loaded from Rotterdam last week. This is the only import reported during the last two weeks, perhaps reflecting the weak Turkish market which may once again be dependent upon local supplies from Tupras at Izmir.

There have been no further bulletins regarding further export tenders for Group l base lis to be loaded from Aliaga following the 6kt parcel for Nigerian receivers which sailed during the last few days of June.

Also there are no reported activities from the STS facility at Kavkaz, Russia, following the Nigerian cargo which loaded during June.

No Med sourced movements are detected typically going Derince and Gebze but Med indicative prices for possible cargoes can be assessed lower at around $1,225/t on a CIF basis for SN150 and around $1,685/t for SN500.

Prices for imported Group ll and Group lll base stocks remain high reflecting prices paid by importers over the last few months and are between €1,465/t-€1,485/t in respect of the low-vis Group II grades, with the higher-vis 600N remaining higher at €1,825/t-€1,865/t.

Group lll imports into Turkey from the Middle East Gulf are priced at €1,540/t-€1,585/t for partly-approved and fully-approved 4 cSt and €1,575/t-€1,595/t for 6 and 8 cSt. Another cargo of Group III base oils is marked to arrive into a Turkish port from suppliers in the Middle East Gulf during August.

Middle East Gulf

In the Red Sea one former cargo loaded out of Yanbu during the last ten days of June with a following parcel de to load during July. The first parcel was for the United Arab Emirates and the West Coast of India, whilst the second will deliver to a Sudanese port with the balance of the cargo going into one Pakistani port and two others in the U.A.E.

Once again there are no reports of any base oils moving out of Iran.

From local source in UAE, there are suggestions that material is still being moved in locally flagged vessels from Bandar Bushehr, and this material is being bridged into Hamriyah, U.A.E., and then cargo-sized parcels are assembled for receivers in India. These cannot be confirmed until regular tonnage is identified a moving base oils from U.A.E. to Mumbai anchorage.

The major export from the Middle East Gulf is of course Group III cargoes loading out of Al Ruwais, U.A.E., Sitra, Bahrain, and Ras Laffan, Qatar. Large quantities, in excess of 100,000 are confirmed loading out of Ras Laffan during 2021. This entire quantity was delivered into China and India.

Netback assessments in respect of Group lll grades being exported from Al Ruwais and Sitra are maintained in this report since there have been no material changes to selling levels in export markets such as Europe, India, China and the U.S.

Netback assessments in respect of Group III grades exported from the Middle East Gulf, remain at levels of $1,535/t-$1,645/t for all grades of partly-approved Group III base oils. The same output base oils from Sitra which are marketed under the Nexbase brand, being fully-approved, netback at a higher level due to the pricing differential in the export markets. These grades are assessed to netback between $1,575/t-$1,665/t all viscosity grades.

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 which are being imported into the U.A.E. from various sources in the U.S., the Far East, Saudi Arabia and Europe, in both bulk and flexies, and which are being resold on an FCA basis remain priced between $1,600/t-$1,745/t for 100N, 150N and 220N, along with the heavier 500N and 600N grades between $1,910/t-$1,955/t. Prices tend to remain fixed for the duration of dispensing of a particular bulk cargo, after which levels are reviewed in light of FOB and transportation costs.


South African shipping sources have confirmed that the next large cargo loading out of Rotterdam and Fawley will move directly to Durban port with 19kt of base oils and drilling fluids.

In West Africa, following the raft of cargoes loaded for Nigeria during June the market has gone quiet in that there are no enquiries being floated for additional material during July. This may be due to Nigerian buyers adopting the ‘wait and see’ tactic in the belief that prices in respect of Group I base oils are in line to fall from current levels.

With the market already signaling that this may indeed be the case, only receivers desperate to replenish inventories will be in the market later this month.

Elsewhere in WAFR one major holding the Ghana contract has elected to charter a stand-alone vessel to deliver to Guinea, Cote d’Ivoire and Ghana following speculation that the Ghana requirement would be delivered as a part cargo on a vessel moving a larger quantity to South Africa. This composite cargo of total 10.8kt for the three locations will load towards the end of July from Rotterdam and Fawley.

CFR/CIF levels in respect of Group l base oils confirmed and sold firm, landing into Apapa in July are maintained as last, since no further cargoes have been identified. Prices are $1,895/t for SN150, SN500 at $1,950/t, with higher spec SN500 around $1,965/t, SN900 with viscosity index of at least 95 is priced at around $1,995/t. Bright stock remains unavailable until now, although this may change during July with the European supply picture altering in favor of more available material coming on to the market.

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.