Europe-MidEast-Africa Base Oil Price Report


The past week has seen the EMEA market take some rather surprising turns. With the events unfolding in Libya, the market appears to have lifted itself to a new level and seems content to remain on that platform for the moment.

Most producers and re-sellers have still been talking the market up, with supporting evidence in the form of continuing high crude and petroleum product prices, which certainly go a long way to justifying some of the increments being requested by the selling fraternity.

Get alerts when new Sustainability Blog articles are available.


However, a rather strange anomaly is occurring within the EMEA base oil market, which is both helping and hindering sellers and buyers alike. With demand for European and Middle East production exceptionally strong at the moment, sellers are unable, or unwilling to offer prompt spot availability of material into the market, claiming that they are sold out for April and in some case right through until May or June.

This scene is holding them back from discussing new prices for new business, whilst at the same time is sending a garbled message to buyers who are seeing material being moved or loaded which was sold, and prices agreed, some time prior to the North African and Middle East problems.

The result is that producers, whilst trying to push the numbers upwards, are being tied by historical deals which could never be repeated in todays market, this action being critical in deflating receivers ideas as to increases and what the actual prices should be in todays climate. Buyers in the meantime are using the same historic data to shout down the size of real increases which, according to refiners, should now be applied to base oils coming out of production.

Prices in mainland Europe for Group I solvent neutrals have been maintained at around levels shown last week, with buyers for future availabilities reticent to acknowledge the rate and the ratio of increases to existing price levels. Prices are still offered around $1,170 to $1,185 per metric ton for light grades with heavier neutrals such as SN 500/600 showing at between $1,195 and $1,230/t.

Heavy neutrals are particularly short over the next three months, with some producers stating quite openly this week that these price levels will certainly be breached for any future offers for this type of material. Bright stock still remains elusive in any large quantity, and is priced again between $1,475 and $1,520/t, depending if sold by cargo lot or by barge, railcar or truck.

These prices are all based on FOB or ex-tank offered price levels for supplies of mainstream production in mainland Europe, with a very small input at this time from North African suppliers due to obvious reasons.

Russian supplies are being continued as normal in the Baltic, although with a bout of very cold weather in the northern part of the Baltic Sea, there have been problems caused by ice in loading vessels out of Finnish ports and those in the Gulf of Bothnia. Base oils being loaded out of Riga, Liepaja and Svetly appear to be loading as normal albeit charterers are being forced into using ice-class vessels for the voyages.

The requirement for ice-classed ships has limited the voyages which these stand-alone vessels will undertake, since there is an ongoing requirement for such vessels operating in the Baltic region, not only for base oils but for other clean petroleum and veg oils.

Prices are still rising for Russian, Belarus and Uzbek material being supplied on an FOB basis through Baltic ports. Levels are now in the region of $1,120 to $1,140/t in respect of SN 150 grades, with SN 500 coming in at $1,165 to $1,185/t.

Although Russian SN 500 carries a slightly lower specification than mainland European material, this is one of the only supply points where relatively large parcels of this grade are still available. This factor alone is driving the price higher by the day, considering future demand from buyers in West Africa, Middle East, and India (post mandatory ice-class rating for performing vessels).

Very heavy neutrals such as SN 900 and SN 1200 can still be arranged through traders in this region, these grades now being seriously considered as part-substitutes for bright stock. Prices for heavy grades are now in a range, depending on viscosity between $1,225 and $1,250/t FOB.

In the Black Sea region Russian and Uzbek material is still in focus and is being offered to Turkish buyers at new revised pricing levels. Offers are continually being turned down by importers, who are countering with prices which have not been possible for some six to eight weeks in this area. Sellers are now offering at levels approaching $1,140 to $1,160/t basis delivered CFR/CIF Istanbul range, and are being declined by most buyers.

The Middle East Gulf regions have seen exports prices for Group I grades move swiftly upwards over the last few days, with prices from the United Arab Emirates for SN 500 being offered out at $1,230/t, substantially higher than previously seen in this area. Levels for small quantities loaded into flexi-bags in TEU containers have been witnessed at levels in excess of $1,320/t, basis FOB container port.

These are Iranian import/export grades, mainly SN 500, the other grades such as SN 150 and SN 650 being retained and used by UAE and other local blenders. SN 150 is still extremely short in Middle East Gulf areas along with west coast India. There have been enquiries for large parcels of this grade to be lifted from European and Russian sources, due to Far East supplies for Group I being priced on too high a scale to allow import to this region.

Saudi Arabian prices have moved, but not it seems as much as the rest of the region would have expected. Sources commented that with civil problems in Bahrain, perhaps sales had not been at normal levels. Prices are now in the following bands for Group I products: $1,160 to $1,185/t for light neutrals, $1,175 to $1,195/t for heavy neutral grades, and bright stock at $1,425 to $1,460/t.

In West Africa there have been a number of large enquiries for combination cargoes from Europe, Baltic, U.S., South America and even the Far East. Sometimes it is envisaged that importers and buyers in Nigeria and Ghana do not keep up to date with the global base oil scene, since almost all of the enquiries have met with a brick wall particularly from the United States, South America and Far East. All three of these locations have seen recent cargo movements from European Group I suppliers.

Traders have been looking at many different permutations for taking cargoes from Baltic and northwest European loading ports, but as mentioned above, loading from Baltic ports has been problematic, given that there are always draft restrictions for vessels loading.

Prices into West Africa have changed slightly from last week due to higher costs of freight and handling. Levels for Group I solvent neutrals will now lie in the range of $1,290 to $1,345/t, with bright stock (if possible to arrange) still in the region of $1,600/t (All basis CFR West Africa discharge ports such as Tema, Lome or Apapa).

Group II/II+ prices in Europe have continued the upward drift with another small increase by one importer which came into effect on March 15. Levels are still crossing paths with Group I grades at the light end of the viscosity spectrum, with N150 type material being lower priced than SN 500.

This is a technical feature of the pricing for both these types of base oil, but typically Group II levels are maintaining their premium over Group I. Levels in mainland Europe are now between $1,210 and $1,240/t for the light ends, with higher-viscosity material coming in at around $1,225 to $1,280/t.

Group III prices throughout the region on an out of tank basis have not really moved much in the last few weeks. Prices are still ranging between 1,160 and 1,175/t for 4 centiStoke material, with 6 cSt grades selling at 1,195 to 1,245/t. The recent movement in foreign exchange between Euro and U.S. dollars will not have helped the future pricing for these products since the strengthening of the Euro will hasten any further price increases which lie around the corner.

Group III availability remains exceptionally tight due to restrictive supplies from European producers at the moment. Some suppliers are allocating material to their main customers without increasing the quantities of imported material. One importer commented that in fact there is no more material available, even at refinery source.

Group III in Middle East Gulf areas has seen some hefty increases in numbers over the past weeks, with imports from Far Eastern sources looking to sell at above $1,650/t for both 4 cSt and 6 cSt grades.

The base oil market is responding to the Libyan and other Middle East scenarios in many ways, with demand riding high, and a tightness for supply of all types of base oil. The scene is set for another round of price increases, but as stated above there are reasons in place which may limit producers from having their own way.

With Dated Brent hovering at around $115.15 per barrel, WTI at $103.35, and ICE gas oil at $974 for front-month trade, it is difficult not to envisage further pressures on EMEA base oil numbers in the near future.

Ray Masson is director of Pumacrown Ltd., a trader and broker of petroleum products in East Grinstead, U.K. Contact him directly at

Related Topics

Base Oil Pricing Report    Base Stocks    Market Topics    Other