EMEA Base Oil Price Report


Prices for certain grades of base oils have fallen sharply over the past few weeks, particularly API Group l grades – some of which have fallen by more than $100 per metric ton. Some say that this was inevitable given the speed of the preceding run-up and the heights that prices reached during May and June.

Although solvent neutral prices have been slashed, bright stock appears to be holding up and has dropped only slightly from its peak.

API Group II and Group III base stocks appear to be riding out any pressure from buyers trying to negotiate lower numbers for August deliveries. Lighter viscosity grades of Group II have seen some downward adjustments over the past week or two, but Group III remains short and hence firm, with the upper boundary of price ranges remaining steady.

Refineries are again upping their fuels run rates, generating more feedstock for base oils. Notably, Production at ExxonMobil’s unit in Rotterdam continues to run at high rates – in the range of 90-99% of capacity. With the end of the maintenance season there appears to be more product available for export markets, and traders are seizing every opportunity to move large parcels of Group I to locations such as West Africa. Moreover, arbitrage is open between the Baltic and the United States, so Russian export barrels are traveling in that direction.

Nevertheless, refiners throughout Europe, the Middle East and Africa remain guarded about returning to full operations, worried about prospects that the coronavirus pandemic could rebound. There are reports, for example, that spikes in Iran and South Africa are causing continued restrictions on movements for people and goods.

Crude oil prices have stalled over the past couple weeks. Dated deliveries of Brent crude has hovered around $74 per barrel for the past few days and now stands at $73.90/bbl, now for September front month delivery. West Texas Intermediate is at $71.60/bbl, now also for September front month. ICE low-sulfur gas oil is static at $599 per metric ton, exactly the same level as was reported a fortnight ago, but now for August front month. 

These prices were obtained from London ICE trading late Monday.


European export prices for Group I base oils on an FOB basis have dropped dramatically – at least for the range of solvent neutrals – which fell back in some case by more than $150/t, reflecting greater availabilities and lower demand due to the summer recess period. August will be a really quiet month this year, with holidays and the effects of the virus causing a general slow down across all major markets.

The market is varied, however, with some producers still trying to ask for high numbers for prompt supplies, but buyers are being careful, with some postponing large purchases.

Prices for SN150 are lower by $100/t-$150/t, with a spread now at $1,025/t-$1,100/t, while SN500 has come off the recent highs by some $120/t-$150/t, now being assessed at $1,525/t-$1,585/t. Sources have said that these price drops are to be expected after the meteoric rises seen earlier, in response to lack of available material.

Bright stock in large quantities remains tighter, although there are chinks appearing in the pricing armor amid reports that availability is increasing, with larger quantities of this grade coming from a number of sources, Price levels are assessed at $1,895/t-$1,955/t. Because of the high prices for this grade, typical export markets moved to take SN900 as a substitute and replacement for bright stock. While not an identical product, many blenders in regions such as West Africa can use SN900 as high vis blend stock.

European domestic markets are also weaker, with prices for August announced last week that are substantially lower than those offered for July deliveries. Demand is falling, and with August typically being the vacation month, and with the COVID effects on top, the markets will slow right down from the end of this week.

The regional markets are following the export trend downwards, with numbers looking much lower for August. Levels came off the peaks in a similar manner to export sales. Prices tumbled by as much as $200/t-$250/t in some cases, reflecting more realistic numbers going forwards.  

Prices fell in both export and domestic markets, but the differentials between export and domestic are retained and are assessed at €15/t-€75/t, with domestic numbers still higher.

European Group II prices are steadier than Group l, although some sellers are moving to discount some prices for early August. Seeing more possible availabilities from Far East sources, market share could become the issue. Sellers are keen to retain business that they have fought hard to build up over the past year, given the COVID situation and all other complications which have been encountered over the last 18 months.

Demand is set to drop over the next month, but it is expected that September will see rising demand for Group II base oils, with forecasts for 2022 much higher than current offtake levels.

Market observers commented that much depends on the hurricane season in the United States and any subsequent damaging effects that could be incurred over the next few months. If there are supply interruptions, then local inventories will have to be addressed, making the U.S. domestic situation a priority for all in the supply chain.

However, with the arbitrage between Asia-Pacific and Europe open there may be a number of imports from sources holding FTAs with the EU. Supplies could support the European scene should U.S. barrels become scarce. Incurring import duty on U.S. Group II grades may disincentivize the import of large quantities from that source.  

Prices remain buoyant and are assessed only slightly lower than previously reported,  levels are now at $1,520/t-$1,650/t (€1,275/t-€1,390) for the three lighter vis grades (100N, 150N and 220N), with higher vis grades (600N) at $1825/t-$1875/t (€1550/t-€1595).

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

European Group III prices are stable to firm, with the markets still showing tight supplies going forward into the second half of the year. Production from active sources both local and from Middle East Gulf and Asia-Pacific is put at maximum operating levels.

With the reported increase in production rates at the Spanish refinery at Cartagena due to come on-stream later this year, this input will be seen as a welcome addition to the current supply picture.

Prices remain as per last reported and are stable through August and possibly September, since many sellers have pre-sold quantities for the current quarter, and are looking to the fourth quarter for further contracted supplies. Prices are assessed at €1,420/t-€1,510/t for the range of partly-approved Group III base oils. Prices of €1,500/t-€1,520/t are for 6 cSt and 8 cSt grades, with supplies of 6 cSt grades exceptionally tight at €1,500. Four centiStoke grades are €1,420/t-€1,440/t. Prices are for FCA supplies from Antwerp-Rotterdam-Amsterdam hubs.

Group III base oils holding full European OEM approvals (such as Volkswagen) have prices maintained with levels at €1,465/t-€1,485/t in respect of 4 centiStoke base oils, and 6 cSt and 8 cSt grades at €1,525/t-€1,565/t.

Baltic and Black Sea

In the Baltic Sea, only one notable cargo was assembled – a 7,000 tons parcel of Russian export barrels that loaded last week for discharge into Brownsville, Texas. This proves that the arbitrage between the Baltic and U.S. Gulf is open, with API Group I prices in the U.S. still relatively high, allowing this trade to take place. Otherwise, activity is dull, with only another enquiry for some 4,000 tons to load out of Gdansk for the same receivers in Texas.

There are no inquiries for Nigerian buyers and few, if any, short-sea trades moving from the Baltic to Antwerp-Rotterdam-Amsterdam. This perhaps reflects a quiet month ahead for traders and resellers in mainland Europe, with the holiday season in full swing.

FOB prices came off again this week, keeping in line with mainstream levels around Europe. Levels are assessed with SN150 at $985/t-$1025 per metric ton, and SN500 at $1,345/t-$1,425/t, with SN900 priced at around $1,465/t.

Black Sea activity is dull with the Turkish market particularly quiet. Only one cargo of 2,000 tons furfural extract has loaded out of Aliaga for receivers in Spain.

There are no other movements of base oil either into the region or indeed outwards. There has been no news of the STS facility at Kavkaz, Russia, following the cargo which went to Nigeria at the end of June.  The major’s split cargo that is delivered into Gebze, Turkey, is possibly comprised of Group II grades. These will be resold FCA under license from a distributor to local blenders. This was the sole import reported during the last two weeks, reflecting a weak Turkish market which may once again be dependent upon local supplies from Tupras at Izmir, which can supply Group I base oils in local currency.

There are no Mediterranean sourced movements from Italy or Greece, typically going to Derince and Gebze, Turkey. Mediterranean indications about prices for potential cargoes are assessed lower, in line with the general European FOB prices. These are estimated to be around $1,095/t CIF for SN150, with SN500 around $1,525/t.

Prices for imported Group II and Group III base stocks remain high because of historical prices paid over the last few months. Levels of current stock will remain at high levels until inventories are replenished. Prices are set at €1,465/t-€1485/t for low vis Group II grades, with the higher vis 600N remaining higher at €1,825/t-€1,865/t.

Group III imports into Turkey from 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. Prices will continue to remain at recent highs.

Middle East Gulf

Red Sea reports contain news of only one small cargo which will load out of Yanbu for Jordanian receivers in Aqaba. The parcel of 2,600 tons will load during the last few days of this month.

This week there has been some news that a parcel of some 3,000 tons has loaded out of an “Iranian port” and has sailed to Hazira in India to discharge what will probably be SN500+ from one of the Iranian refiners. The performing vessel appears to be foreign flagged thus incurring a ban on trading in U.S. ports

Other reports are that Iranian base oils are still being moved in local vessels from BB and BIK, this material is being stored in Hamriyah, then sold on to receivers in the west coast of India.

Group III cargoes continue to load out of Al Ruwais in United Arab Emirates, Sitra in Bahrain, and Ras Laffan in Qatar, with one parcel of 6,000 tons loaded during the first week of August from Al Ruwais. This quantity will discharge into China.

Netback assessments for Group III base oils exported from Al Ruwais and Sitra remain as per last report since prices in export markets such as China, U.S. and Europe are holding up and have not been the subject of any discounting.

Netbacks for Group III base oils exported from Middle East Gulf remain at $1,535/t-$1,645/t for 4 centiStoke, 6 cSt and 8 cSt partly-approved Group III base oils. The same output base oils from Sitra, holding full approvals, will netback at a higher level due to the pricing differentials in the various export markets. These grades are assessed to netback at $1,575/t-$1,665/t for 4 centiStoke, 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 imported into the U.A.E. from numerous sources in the U.S., Far East, Saudi Arabia and Europe – in both bulk and flexies, and that are resold on an FCA basis – are adjusted slightly downwards and are priced at $1,575/t-$1,685/t for light vis grades 100N, 150N and 220N, along with the heavier 500N and 600N grades at $1,875/t-$1,920/t. Prices will remain fixed until stocks are replaced or replenished, after which levels are reviewed.


West African bulletins contain news of only one cargo for discharge into Apapa. This cargo loaded out of Livorno last week with 4,800 tons of Group I base oils possibly three grades – SN150, SN500 and bright stock. Other Nigerian buyers are waiting to see if the FOB prices from various sources are going to fall over the next few weeks.

There are a few problems attached to this waiting game, those being that blenders in Nigeria are looking to take stocks now and require access to base oils on a continuous basis to maintain production of finished lubes. Therefore, local blenders are putting pressure on importers to buy material now rather than wait until the beginning of September. 

CFR/CIF levels for of Group I base oils, landing into Apapa in August are tweaked lower with the discounts which are being applied to FOB prices in Europe and the Baltic. Prices are assessed at $1,765/t for SN150, SN500 at $1,825/t, with higher spec SN500 around $1,845/t, SN900 with VI min 95, is priced at around $1,885/t. Bright stock was unavailable until now, although the cargo loaded out of Livorno may have a quantity of this grade on board, Should this be the case, then CFR/CIF prices are expected to be at $2,055/t-$2,095/t.

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.