EMEA Base Oil Price Report


Buyers and sellers are unsure of future price direction as crude values remain static and the yearend goal of lower inventories comes into focus.

Levels for dated deliveries of Brent crude basically stood still at $51.20 per barrel for December front month settlement while West Texas Intermediate crude narrowed the gap at $50.35/bbl. ICE LS Gas Oil remained around $465 per metric ton.


API Group I FOB offers continue at $480/t-$495/t for light solvent neutrals with SN500 and SN600 between $565/t and $585/t. Bright stock, however, appears to have moved downwards by $10/t-$15/t to $865/t-$885/t. These prices refer to large cargoes of Group I supplied or offered on an FOB basis ex mainland Europe.

Local prices continue at the levels that have been prevalent this month. Some say that any November revisions would be downwards, but selling sources are adamant that current levels be supported for as long as possible. Pressure is building on stocks in tanks in Antwerp-Rotterdam-Amsterdam, and with further parcels and cargoes fixed from Baltic ports, ullage may become the driver in determining domestic prices for smaller parcels of Group I sold or delivered on an ex-tank/truck basis.

Exchange rate fluctuations in the United Kingdom have seen local selling prices moving up 20-30, and are leading sellers in the U.K. and Europe to predict further increases from Nov. 1. The differential between local selling levels and those applying to export sales has expanded to 85/t-120/t.

Group II prices throughout Europe remain stable, with further reports of large parcels of around 25,000-40,000 tons coming from the U.S. Gulf Coast into Antwerp-Rotterdam-Amsterdam. In addition to these now-traditional imports, parcels are arriving from Singapore and the U.S.

Prices are unchanged, with light vis grades still $555/t-$585/t and heavier vis 500N and 600N at $725/t-$785/t, expressed locally of course in euro and sterling equivalents. These levels are relevant for large bulk parcels of Group II base oils imported into Europe and the U.K. with higher local ex-rack prices in euros and pounds sterling taking account of extra handling, storage and delivery costs, and exchange rate differences of 55/t-80/t or 50-75/t.

Group III markets are ever-changing, with price pressure growing from within due to the plethora of material available in the market. Further enquiries for large cargoes continue to take a prominent position in the shipping market with 8,000 tons being examined as a possibility from Al Ruwais into Le Havre, France. Prices remain positively unchanged, but many riders from buyers state that large parcels going into major users such as additive manufacturers and large blenders are continuously being quoted below existing market levels in bids to arrest business to new suppliers. Prices in this report refer only to material sold on an ex-tank or truck delivered basis ex Antwerp-Rotterdam-Amsterdam, which are 750/t-770/t in respect of the 4 centiStoke and 6 cSt grades, and around 740/t for 8 cSt material.

Baltic and Black Sea

Baltic trade reports fewer cargoes loading for Antwerp-Rotterdam-Amsterdam-Germany, but with at least five such parcels last week, perhaps this part of the market is entitled to a break. There remains a continued absence of enquiries for western Africa, although two major traders have assembled cargoes heading there from Mediterranean and U.K. refineries. FOB levels for Russian export barrels remain competitive with a couple of distributors on the Baltic trying to move levels higher on a delivered basis, citing exchange rate movements as the universal agent. Distributor prices in euros and sterling are increasing.

FOB prices remain in last weeks ballpark with SN150 at $475/t-$490/t and SN500 at $545/t-$565/t. SN900 is heard at around $640/t. There is one enquiry for a parcel of around 6,000 tons to be loaded out of Riga, Latvia, for Jebel Ali, United Arab Emirates, although quite which grades would be involved is unclear. With historical problems in using SN900 in the U.A.E., and the availability of Iranian SN500 locally at competitive levels, it is hard to fathom the viability of such a movement.

Cross-Black Sea trade is reportedly thin, with more emphasis on the acceptance of Mediterranean-sourced cargoes coming in for Turkish receivers. One Spanish parcel of around 4,000 tons is bound for buyers in Gebze, Turkey, with a larger 5,500-ton cargo ex Agio, Greece, sold into Derince, Turkey. Other enquiries for Mediterranean Group I base oils for Turkish receivers have seen offers of $528/t for the SN150 grade, coupled with quantities of SN600 at $584/t. Other offers of bright stock have been heard at similar numbers in respect of the neutrals with bright stock at around $880/t CIF. Turkish buyers state that Russian SN500 is available at $575/t basis CIF Gebze, Turkey, for early November arrival.

Middle East

Red Sea movements out of Yanbu and Jeddah appear to have been covered for this month, although a number of movements will be arranged for November and December deliveries to contract buyers in Oman, U.A.E., and the west coast of India.

Middle East Gulf regions report that the area is rapidly becoming a major source for new production of Group II and Group III base oils, with the regions balance shifting from an area dependent primarily on incoming shipments to one that produces and exports. This applies to new production and of course existing Group I barrels out of Saudi Arabia and Iran.

Iranian base oils are moving again out of Bandar Bushehr and Bandar-e Emam Khomeyni (BIK) to the west coast of India, with two cargoes identified this week totaling 10,00-11,000 tons. Netting back CIF numbers to FOB gives assessments of $585/t-$600/t. These prices are perhaps a little lower than previously noted but with receivers in U.A.E. and the west coast of India looking for keener delivered levels, sellers may have had to trim FOB prices accordingly. These levels apply to the higher-spec SN500 Iranian grade. Prices in respect of smaller avails of Iranian SN150 are estimated at around $545/t FOB, with U.A.E. FOB levels quoted at $585/t. SN500 can be available ex-tank U.A.E. at offers of $660/t depending on quantity and specification.

Imported Group I grades Middle East Gulf Group I base oils are around $575/t in respect of SN150, $660/t for quantities of SN500, and around $945/t for bright stock.

With the reported 8,000 tons of Al Ruwais products and the suggestion that material has also been loaded ex Bahrain for the U.S., India and the Far East, this sector of the base oil market is heating up, although it has been heard as rumor that FOB prices are not to be eroded further and that current levels will have to be improved due to feedstock revaluations if production is to run efficiently.

Major distributors of Group II grades have reported that interest in these grades is growing in light of an ever-increasing move to modern engine lubrication systems throughout the region. With adoption of European, U.S. and Far East standards, blenders in Middle East Gulf areas will eventually make the move to Group II and or Group III base oil use. However, suppliers and distributors are reluctant to move to lower prices to accommodate the transition from Group I.

Group II prices are $525/t-$550/t in respect of the range of light vis grades from 100N through 220N, with 500N and 600N between $695/t and $710/t CIF.


Mediterranean-North African traffic has been particularly evident, with receivers in Egypt awaiting a cargo loaded out of Algeciras, Spain, possibly of bright stock. Italian producers have sold around 6,000 tons of Group I grades into traditional customers in Rades, Tunisia, and Mohammedia, Morocco. Prices are based on European FOB levels plus freight, making levels for SN150 around $535/t, and SN500 at about $595/t basis CIF.

Nigerias problems with access to foreign currency are reportedly growing and being seen as a major hurdle for many imports – not just base oils. With reported shortages of fuels, this problem must be tackled sooner rather than later to prevent Nigeria coming to an economic halt.

There are no reported cargoes loading for the Nigerian market this week, with only a few majors involved in recent movements. Reportedly, affiliate-to-affiliate transfers of funds can accommodate such trade, but this is limited to only a handful of majors who are represented in the West Africa region through local operating companies.

Local Nigerian sources have confirmed prices offered to receivers for material to be delivered into Nigeria on an open credit basis of $735/t in respect of Group I solvent neutrals SN150 and SN500, with SN900 being offered at $860/t. Bright stock has been mentioned in excess of $1100/t, all priced on basis of CIF/CFR Apapa port, Nigeria.

By comparison, Group I base oils covered by existing letters of credit or offered against secured payment terms into Nigeria are currently assessed CIF/CFR at $595/t for small quantities of SN150 in bulk, or in flexies at around $668/t. SN500 is pitched at $665/t-$680/t, with bright stock at around $985/t and Russian SN900 at $785/t CIF/CFR.

On a sad note, the writer of this report learned that an old friend,Dr. Narendra Desai, chairman of Apar Industries Ltd., passed away on October 17 at the age of 76. Sincere condolences and thoughts are with his family.

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

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