EMEA Base Oil Price Report


Rising API Group I and Group II prices throughout the EMEA markets have stabilized at last weeks levels. Group l supplies from mainland suppliers are still tight, with Baltic avails still not forthcoming.

Dated Brent levels have dipped to $101.30 per barrel for front month settlement, with ICE gas oil futures at $898 per metric ton. The decline has not affected base oils, perhaps suggesting that base oils react to crude and feedstock levels over a long term, but have their own agenda on short term.

Group I prices are maintained at $970-$990/t for light solvent neutrals, with heavier grades being sold between $995/t and $1030/t. These sales are limited, with many suppliers within the European mainland declaring that they have no prompt availabilities for spot sales. With some northwest European refineries in turnaround, the market is shortened even further. Bright stock spot supply — especially in larger quantities — remains elusive, so offers are hiked to the extent that traders and resellers are finding it difficult to place quantities into traditional export markets such as West Africa. Levels are now $1140-$1175/t.

Prices above refer to export sales of large cargo-sized parcels for Group I base oil ex mainland Europe and North Africa where avails allow.

With published indices moving on a major scale this past week, domestic European sales premiums has moved back up compared to export markets and is now considered to be 80-115/t, with some suppliers noting shortages caused by surges in demand. This is particularly true after yesterday, when producers supplying into the local European markets announced a number of increases.

Group II prices also appear to have stabilized around the levels posted last week, catching their breath and perhaps calculating differentials between these grades and Group I competition. Levels are still between $1065/t and $1100/t in respect of the light vis grades with the heavier 500N and 600N grades at $1170-$1255/t, all in respect of sales basis ex tank northwestern Europe and Mediterranean satellite storage.

Group III sales are reported to be increasing, with demand growing for both 4 cSt and 6 cSt, and indeed some sellers have been able to move prices slightly higher on the back of the current demand. The tight Group I situation appears not to have tarnished the markets appetite for Group III base oils, and with the fears of an oversupply diminishing — at least in the short term — many producers are more than content with market share and returns on these grades.

Prices have moved ahead, perhaps echoing the moves on Group I and II, but not to the same extent. Increases have been reported between 10-20 for both grades, with 4 cSt now around 930-940/t and 6 cSt grades selling at 940-955/t basis truck loading ex tank Antwerp-Rotterdam-Amsterdam.

Baltic and Black Seas

Reports are that Russian and Belarus stocks are beginning to filter through to distributors and resellers in the Baltic, although many enquiries are still denied due to a lack of avails for prompt sales. SN 150 and SN 500 appear to have come through for some sellers, but with limited availabilities, sellers are unwilling to de-stock at prices which may move higher. Some are saying that they want to see the market settle down with more availability of all grades before committing to large parcel sales. Latest numbers have been quoted at $940 DAF Latvian border, and with transit cost of around $40/t into storage, along with tank costs and margins, prices are estimated at $1000-$1020/t. These levels will be compared to mainland European levels and if mainstream prices do not move, unless there are shortages on the mainland, it is difficult to see how Baltic supplies will be able to compete.

SN 900 remains unavailable at this time, although one seller reported that its expecting to receive quantities of heavy neutrals which could be blended to produce an SN 900 which would be available in about two weeks from now.

Black Sea trade continues to be weak, with several unknowns affecting the market in Ukraine and Crimea. Uzbek and Turkmeni material is still available through ports such as Batumi, but few reports of loading from Ukrainian or Crimean ports have been confirmed. Turkish importers have confirmed that some Russian SN 500 is getting through, but not in any significant quantity, and supplies are not being guaranteed. Prices have moved further ahead with SN 150 from Uzbek and SN 180 and SN 350 from Turkmenbashi landing at around $985-$995/t basis CIF Gebze. Mediterranean barrels of SN 500 and SN 150 are offered around $1025/t CIF in bulk.

Middle East

Middle East Gulf reports are that “domestic” SN 500 ex Iran has moved higher in price over the last few weeks and is now being offered at around $1030/t basis FOB United Arab Emirates ports. Markets for this material may be unusually quiet at the moment, with Indian elections taking place soon.

Local imports of Group I solvent neutrals may have edged up slightly this week, with sources reporting numbers of around $1095-$1120/t basis CIF Middle East Gulf, with Iranian export SN 500 at around $995-$1020/t FOB BIK, with re-exports at $1030-$1035/t FOB U.A.E.

Business in Middle East Gulf areas is still buoyant, with requirements for prime-quality Group I base stocks mounting. Even with continuous supplies from Saudi Arabia, Pakistan and Iran, demand is still in force for European and Russian grades which have been notable by their absence from these markets, due to the arbitrage being closed for the former and problems in Ukraine and Russia for the latter.

Group II prices appear to have stabilized again after some spurious negotiations to try to move levels up $5-$10/t. Levels disclosed this week are $1075-$1110/t for the range of three or four light vis grades, with the heavier material such as 500N and 600N between $1150/t and $1225/t. These prices refer to CIF delivered quantities into U.A.E. ports.


There are few reported deals from East Africa and South Africa this week, other than that some importing countries are to limit or at least license the importation of recycled base oils after reports of inferior material being sold in domestic markets. As noted previously, it is wrong to associate all recycled base oils with poor quality, since there are some excellent blendstocks which can be used for specific end uses.

West African receivers are searching and scanning the markets for available base oils which do not have to come from Europe or the Baltic. These supply points have now been associated with high prices which are unrealistic for markets such as Nigeria and Cameroon.

With higher numbers now the norm for barrels from Europe, traders and recievers are looking for suppliesfrom areas in South America, the U.S., Middle East and the Far East.

Offer levels have been confirmed at $1175-$1190/t for Group I solvent neutrals, along with bright stock from European sources at $1230-$1275/t, but none of these offers has been accepted yet by receivers in Nigeria. It could be a matter of time before acceptance is granted to buy these grades, since it would appear from sources that no other alternatives are around to fill the void in this market.

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

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